Business - Companies
Updated: May 04, 2021

MTN On Track To Achieve Double-Digit Growth This Year

By Oluwatosin Ogunjuyigbe
May 04, 2021
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Nigeria's leading telecommunication service provider MTN posted revenue of N385.3 billion representing a 17% increase from the N329.1 billion reported in the same period in 2020.

MTN is now on track to achieve its double-digit revenue growth plan this year as it is now up 5.4 percent from the N365.2bn of the previous quarter.

The double-digit growth is happening on the back of tumultuous three months of SIM card registration bans and government mandates for all Nigerians to register to obtain their NIN and link the numbers to their SIM Cards.

Net profit grew by 42.5 percent to NGN 73.7 billion from NGN 51.7 billion in 2020. EBITDA climbed by 19.1 percent to NGN 204.5 billion from NGN 171.8 billion in 2020 while the EBITDA margin expanded by 0.9 percentage points (pp) to 53.1 percent from 52.2 percent in 2020.

MTN reported an 8 percent growth in Voice related revenue (which generated 63% of the total sum) topping N208 billion for the period under review. Data revenue continued to lead revenue growth printing at N105.7 billion, a 42.6 percent growth year on year, showing heavy reliance on data by MTN’s 61.5 million internet subscribers, the highest in the country.

This was fueled by increased usage, traffic, the boost in 4G penetration, and increased network capacity following the acquisition and activation of an additional 800MHz spectrum in March 2021.

MTN commands the market share for internet subscriptions, owning about 42 percent of the market. MTN also controls 40 percent of the Voice market share, the highest compared to any other competitor.

Insights from the report show that that data traffic increased by 86.7 percent with the addition of the 800MHz spectrum enhancing output by 79 percent.

Also, 4G penetration grew exponentially. “4G network now covers 61.8 percent of the population, up from 60.1 percent in December 2020. We added Like approximately 1.2 million new smartphones to the network, bringing smartphone penetration to 47.5 percent of our base, up from 45.9 percent in 2020,” MTN revealed.

With the huge revenue MTN raked during the quarter, its profit should have been higher than the N73.7 bn reported. However, the drop was caused by the double-digit growth in expenses.

The report shows that expenses rose by 14.8 percent to N180.7bn, mainly driven by a 19.2 percent increase in operating expenses arising from an accelerated site rollout and the effects of Naira depreciation on lease rental costs.

MTN however said the overall increase in expenses was partly mitigated by the comparatively moderate growth of 7.8 percent in the cost of sales following the suspension of new SIM sales and activations.

The four-month NCC ban on new SIM sales and registration effectively curtailed subscriber growth. During the ban, MTN lost a total of 9.2 million subscribers – representing 75 percent of the 12.2m subscribers it added in the entire 2020.

A breakdown shows that Mobile subscribers declined by 5 million to 71.5 million while Active data users declined marginally by 71,000 to 32.5 million.

The telecom giant maintains it will continue to pursue double-digit revenue growth in 2021 through its 4G network expansion and positioning its FinTech Business for “accelerated growth” to unlock its full potential.

MTN also revealed it will continue to push for a revised commission paid to banks on its air time sales and is exploring other options of selling its airtime outside of banks.