MTN expects service revenue in Uganda to grow by 15%-20% in the coming three to five years, benefiting from a stable economic outlook, a growing subscriber base and investment in the mobile operator’s network.
Reporting third-quarter earnings on Monday, MTN Uganda CEO Sylvia Mulinge said: “The operating environment in Uganda remains supportive, with the central bank of Uganda projecting inflation to remain below the policy target of 5.0% supported by a combination of anticipated lower imported inflation supported by currency stability and moderate food and fuel inflation.”
In a year that has seen continued pressure on MTN’s largest operation in Nigeria, Mulinge said her unit had upgraded its service revenue target according to the group’s medium-term guidance framework, and maintains guidance of stable margins above 50% for earnings before interest, taxes, depreciation and amortisation (ebitda).
This comes as MTN Uganda reported a strong performance for the nine months ended September, as it increased subscribers by 13.3%.
Profit after tax for the period rose 29.6% to 459.4-billion Ugandan shillings, while revenue was up 19.6% to 2.33-trillion Ugandan shillings.
“We maintained our market share leadership with 21.6-million subscribers (up 13.3%), recording double-digit growth in our data (up 24.1%) and fintech (up 13.2%) subscribers, with a significant reduction in churn as a result of our sustained network investment and effective customer value management,” said Mulinge.
“We contained cost growth, helped by improving macroeconomic trends and expense efficiencies, driving an expansion in ebitda by 22.3% and a margin uplift of 1.1 percentage point to 51.7%,” she added.
MTN Uganda started trading on the country’s stock exchange in December 2021 after an initial public offering that raised R2.4bn, the largest such amount in the East African country at the time. The company is the biggest by value on the Uganda Securities Exchange.
The listing reduced MTN group’s stake in the Uganda unit from 96% to about 83%, with a further transaction, this year, taking this equity down to 76%.
Service revenue grew 20.1% anchored by positive performances of the commercial metrics across all its business lines particularly sustained subscriber growth of 13.3% in a highly competitive market.
Voice revenue grew 13.7% underpinned by the addition of 827,000 subscribers in the quarter and an increase in voice usage through optimisation of its bundle offering.
Growth slowed marginally in the third quarter due to increased pricing competition, particularly in lower-priced products.
Data revenue increased by 30.1% as a result of an increase in the group’s active subscriber base which grew by 24.1% and supported by a higher data usage per subscriber.
Data traffic on the network recorded an increase of 48.5%, of which 76.8% was carried on the 4G network. Its home broadband offering continues to benefit from the increased adoption as a result of providing an affordable and reliable proposition which has driven a 122% year-on-year growth in active subscribers.
Overall data revenue contribution to service revenue increased to 25.4% from 23.4%.
MTN’s fintech revenue grew 23.5% supported by sustained momentum in the mobile money performance. Mobile money active subscribers grew by 13.2%, which drove a 25.1% increase in transaction volume to 3-billion, while transaction value increased by 13.3% to 114.5-trillion Ugandan shillings.
Update: November 4 2024
This story has been updated with new information.
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