MTN rakes in 4m subscribers in Q1 2019

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MTN group CEO and president Rob Shuter.
MTN group CEO and president Rob Shuter.

MTN has met its medium-term revenue growth target by delivering 10% year-on-year growth led by strong operational performance in SA, Nigeria and Ghana.

The JSE-listed MTN this morning released its first quarter update for the period ended 31 March.

According to the company, group subscribers increased quarter-on-quarter (QoQ) by four million to 236.6 million; active data subscribers increased QoQ by 2.6 million to 81.3 million; active MTN Mobile Money customers increased QoQ by 1.2 million to 28.3 million; while group service revenue increased year-on-year (YoY) by 10%.

It adds that MTN SA service revenue increased YoY by 4.6% with an earnings before interest, tax and depreciation (EBITDA) margin of 38.8% (35,3%); and MTN Nigeria service revenue increased YoY by 13.4% with an EBITDA margin of 53,3% (44.2%).

Commenting on the update, MTN Group CEO Rob Shuter says: "We are encouraged by the operational progress we continue to see across the business, supported by the network roll-out we achieved and enhancements to the propositions that we offer to our customers.

"In South Africa, we implemented changed pricing for prepaid propositions where we reduced, materially, the out-of-bundle tariffs, making data services much more affordable."

Shuter adds that the company takes note of the provisional report from the Competition Commission inquiry into data services and will respond by 14 June.

MTN remains of the view that the release of high-demand spectrum in SA is critical to providing affordable and ubiquitous data services for the citizens of the country, the company says.

As part of broadening the fintech business, MTN also launched Africa's first instant messaging platform "Ayoba" in Ivory Coast and Cameroon, with further expansion into other markets and the integration of payments planned in the second half of the year.

Commenting on the regional performance, group CFO Ralph Mupita says: "We are pleased by the service revenue development, despite challenges in some markets.

"The growth in service revenue was supported by the continued expansion in voice, data and fintech revenue which increased 5.9%, 18.3% and 30.6% respectively.

"Our asset realisation programme remains on track, and we anticipate that the Mascom transaction will close by end of June, subject to regulatory approvals. Good progress has also been made on repayment of the ATC Ghana shareholder loan to MTN Group."

In March, MTN committed to a portfolio review to realise more than R15 billion over the next 36 months and the first move in this regard was today's announcement that MTN will dispose of its associate in Botswana, Mascom, for $300 million (R4.3 billion).

Early in the second quarter, MTN's e-commerce joint venture Jumia Technologies successfully raised fresh capital to list on the New York Stock Exchange.

It says its shareholding reduced to 18.9% in the initial public offering, and as at 6 May, the value of its shareholding in Jumia was approximately $560 million.

The operator completed the conversion of MTN Nigeria to a public company ahead of the listing by introduction on the Nigerian Stock Exchange, which is anticipated for May.

Digital revenue declined by 45.4%, impacted by the work that continues around optimising its value-added services business, says MTN.

It notes that currency markets were favourable in the quarter, resulting in reported service revenue growth higher than constant currency rates.

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