MTN is on track to report solid growth following the release of third-quarter earnings from its listed entities across the continent, including two of its biggest operations — Ghana and Nigeria.
However, regulatory oversight continues to put pressure on the operator’s new pot of gold — financial services — in a number of its markets.
Like rival Vodacom, MTN has staked a large part of its current and future growth on areas beyond the declining voice business, led by financial services. But the growth of mobile money has seen regulators starting to introduce controls or taxes on these platforms. MTN said earlier this year it is dealing with mobile money taxes being implemented in Benin and Cameroon, while Vodacom is feeling the effects of such moves in Tanzania.
This week, MTN’s Ghana unit — the third-largest in the group — reported that “slower growth was observed post implementation of the e-levy from May 2022 and our decision to reduce P2P [peer-to-peer] transaction fees by 25% to cushion the impact on our customers”. As a result, revenue from P2P transactions in the three months to end-September declined by 13.3% year on year.
Still, MTN Ghana — which accounted for just over 10% of group revenue in 2021 — reported 27.9% growth in service revenue to 7.1bn Ghanaian cedis (about R9.4bn) for the nine months to end-September.
Mobile subscribers increased by 13% to 28.5-million, while active mobile money users rose 16.3% to 12.4-million.
A similar theme was noted in Nigeria, where growth in the group’s mobile money business was held back in the third quarter by the temporary suspension of a central bank system in that country, the company said on Monday.
In East Africa, however, new regulations helped to drive up mobile money customer numbers, MTN Uganda reported on Wednesday.
Fintech revenue in that country grew 23.2%, in the third quarter while active mobile money subscribers were up 19.3% to 10.6-million, with net additions of 809,000.
“The strong growth in our base was boosted by the National Payments Systems Act of 2020 directive for all mobile money operators to pay quarterly interest to all existing account balances, which attracted more users into the ecosystem,” said MTN Uganda.
Overall, nine-month service revenue for the unit grew 11.5% to 1.667-trillion Ugandan shillings (about R8bn).
In Rwanda, a national push towards electronic payments helped to increase MTN’s revenue from fintech services to register “robust growth”. Airtime lending, specifically, helped MTN Rwanda to register 50.6% growth in revenue over the period and mobile money increased 52.9%.
Fintech users grew 10.8% year on year to 4.1-million.
Mobile subscribers increased 5.7% to 6.8-million for the nine months, with service revenue up 21.5% to 163.9bn Rwandan Francs (R2.78bn).
The market appears positive about the earnings reports from the group’s various operations, with MTN shares up 2.73% so far this week.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.