Telecommunications company, MTN Group, has said that macroeconomic challenges in the various countries it operates in have caused an 18.8% shortfall in revenue in this year’s Q1 compared to last year’s.
- •MTN Nigeria, an invaluable market for the company, registered the greatest decline in revenue, raking in almost half of the revenues it fetched at the same period last year.
- •In 2023 Q1, MTN Nigeria reported revenues surpassing US$ 1 billion but that figure has fallen to US$ 553 million in this year’s Q1 – a 52.8% decline.
- •The Telco reported that revenues from voice services decreased by 32.2% alongside data revenues that declined by 14.7% – mainly because the war in Sudan has negatively affected its market there.
“The macro environment in first quarter of 2024 remained challenging with ongoing high inflation as well as local currency devaluations in some of our key markets. Although still elevated, we are encouraged by the abating trend in the blended rate of inflation across our footprint, which reduced to 13.7% in Q1 2024; compared to 18.5% in Q1 2023 and 15.4% in Q4 2023.
“In Nigeria, we saw strong underlying commercial momentum in the business, despite the financial impacts of the sharp devaluation of the naira and continued elevated inflation during the period,” said MTN Group CEO, Ralph Mupita.
MTN Group has also mentioned that early this year, cable cuts along the Atlantic Ocean affected the company’s data services for some time – in countries where the telco held market sway. Countries like Nigeria, South Africa, and Ivory Coast were affected by internet outages for hours and days. Such a widespread customer inactivity could be disastrous for a telco’s revenues.
Despite all these challenges, MTN registered 1% growth in subscribers across all its markets. MTN customers who now use data services from the network also rose by 7.8% in Q1.
MTN Group delivered an increase in service revenue of 11.1%, driven by steady growth from MTN South Africa (up 3.0%); as well as strong performances in MTN Nigeria (up 31.8%), MTN Ghana (up 32.4%) and MTN Uganda (up 19.4%).
MTN’s Fintech division made impressive gains in this year’s Q1 compared to last year’s, after its revenue shot up 11.4%. The Mobile Money division also ramped up its active subscribers by 6.2% as well as expanding to 10 new countries through mobile wallets.
MTN and its Future
MTN, under the realization that its Fintech division could be the way to the future, has partnered with Mastercard to upscale the service in many other inaccessible markets. In February this year, Mastercard pledged US$ 200 million for MTN Group’s Fintech – acquiring a 3.8% minority stake in the enterprise.
The significant revenue fall that MTN Nigeria has registered in 2024 Q1 will probably force the company to reassess its market objectives. Historically, the Nigerian division has been a major driver for the group’s revenues to a point where certain markets like Ghana and Uganda have been ignored. However, since 2020, Ghana has been imposing stiff regulations on the South African- based telco to avoid its overwhelming dominance in the country’s economy.
MTN may also have to shift focus on unexplored markets with immense potential like Kenya and Tanzania. In both countries, however, the task may not be easy. With potent rivals like Safaricom and Vodacom, MTN’s entry as a telco is likely to be repulsed. Currently, Kenyans can only buy shares and invest in MTN Uganda after the Capital Markets Authority (CMA) cleared its IPO.
MTN South Africa’s revenue only increased by 3% this year’s quarter compared to last year’s. This is not a very impressive range for a company’s home market. The company plans to revise prices of data offerings to compete solidly with their rivals and prevent subscriber stagnation and leakages.
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