MTN Uganda has reported a strong quarter despite the changes to regulatory mobile termination rates, thanks to a 13.5% rise in service revenue.
The group reported a 20.6% rise in profit after tax in the three months to end-March to 180.9-billion Ugandan shillings with an improved margin of 21.3%. Revenue was 13% higher at 848-billion Ugandan shillings.
Overall subscribers were up 14.6% to 22.8-million, with active data subscribers rising 19.4% to 10.2-million and fintech subscribers increasing by 9.8% to 13.6-million.
Service revenue grew by 13.5% to 841.4-billion Ugandan shillings with stronger contributions recorded from the group’s data and fintech portfolios. Data revenue grew by 32.5% and fintech revenue grew by 18.4%, driven by 19% growth in its mobile money services.
The volume of MoMo transactions increased by 19.9% to 1.2-billion, with the value of transactions increasing 23.9% to 42-trillion Ugandan shillings.
Voice revenue grew by 1.5%, impacted by lower inbound voice revenue as a result of last year’s interim industry-wide mobile termination rates (MTR) review, which reduced MTR rates from 45 to 26 Ugandan shillings.
However, the reduced pricing resulted in a 16.5% rise in voice traffic due to increased adoption of the group’s improved all-network bundles, which helped to cushion the effect of the MTR cuts.
Digital revenue grew by 23.5%, driven by growth in MTN Uganda’s content revenue and growth in its video streaming subscriptions with increased adoption of the MyMTN app.
“MTN Uganda had a resilient start, navigating changes in the regulatory environment which impacted our business momentum,” said CEO Sylvia Mulinge.
The business headwinds were cushioned by supportive macroeconomic conditions, a stronger shilling, which appreciated by 5.7% against the dollar, and stable headline inflation, she said.
“Despite the regulatory MTR changes, we are pleased with the solid strategic execution that supported growth in other areas of our business in the period while ensuring margin resilience and value preservation in our operation,” she said.
The group has invested 118.6-billion Ugandan shillings on network densification to improve coverage and quality of service. During the quarter, MTN Group and Airtel Africa entered into network sharing agreements to maximise network infrastructure.
On the regulatory front, the Uganda Communications Commission is conducting a costing study to determine the trajectory of the MTR over the next five years. The study is expected to be concluded in July and will guide the direction of the group’s voice business.
It was maintaining its guidance framework of delivering “upper-teen” service revenue growth, stable earnings before interest, tax, depreciation and amortisation (ebitda) margins above 50% as well as capex intensity in the “low teens”, it said.
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