Africa’s biggest mobile carrier MTN has regained its footing in Nigeria after years of continuous litigation, announcing bumper profit, earnings per share rising by 38.8% and subscribers increasing by 6.1 million to 64.3 million, for the year ended December 2019.
MTN Nigeria’s profit before tax rose by 31.1%, and the board has proposed a final dividend of N4.97 kobo per share to be paid out of distributable net income. This brings the total dividend for the year to N7.92 kobo per share.
For some time, MTN in Nigeria has had long-running court battles with authorities.
The telco recently received a fresh lifeline in the West African country following the decision by the attorney-general to withdraw a $2 billion tax claim.
Prior to that, in August 2018, the Central Bank of Nigeria (CBN) demanded MTN repatriate $8.1 billion (R117 billion) to Nigeria, which the bank said the company had sent abroad in breach of foreign exchange regulations.
MTN denied the allegations.
In December of the same year, MTN agreed to make an almost $53 million payment to resolve the dispute. At the time, it was agreed MTN would pay a notional reversal amount of $52.6 million, without admission of liability.
This was for a 2008 private placement remittance worth around $1 billion that the CBN found was based on certificates that did not have final approval.
MTN Nigeria today announced its full-year set of results, showing its active data subscribers jumped by 34.9% to 25.2 million, with the company saying as a result, the ratio of active data users to total mobile subscribers increased by 7.1pp to 39.2% in 2019.
MTN Nigeria’s voice revenue growth remained healthy at 8.4% and accounted for 72.7% of service revenue. Voice traffic increased by 7.6%.
In addition, the telco says it has seen rapid acceleration in data revenue growth enabled by greater population coverage, a revamp of its data portfolio and initiatives to drive 4G device penetration.
“We added 5.3 million new smartphones to our network, bringing smartphone penetration to 41.8% of our base, while data traffic rose by 85.8%. Our interventions in the year helped to drive a 42.4% increase in data revenue for the year (63.1% YOY in Q4 2019). Data contributed 18.8% to service revenue, up 3.9pp from 14.9% in 2018,” says the telco.
Commenting on its regained footing in the West African nation, MTN Nigeria CEO Ferdi Moolman says: “We are delighted with the progress made in resolving our dispute with the attorney-general of the Federation (AGF) on the adequacy of taxes and duties paid.
“We have discontinued the legal action against the AGF following the transfer of the matter to the relevant authorities and look forward to a final resolution. We have always fulfilled our tax obligations and remain committed to maintaining good relationships with all regulatory authorities.
“In the third quarter, we focused on several initiatives to enhance coverage and drive data usage penetration. These initiatives include optimising frequencies, expanding our 4G network coverage with over 6 000 additional sites leveraging 800MHz spectrum and repositioning our commercial data offerings.”
According to Moolman, the promising results MTN Nigeria reported at the end of the third quarter of 2019 accelerated in the fourth quarter.
“Corresponding with the increase in our active data subscriber net additions by 2.9 million in Q4 2019, our 4G population coverage rose by 8.4 percentage points to 43.8%, giving people in 68 additional cities access to 4G. We closed the year with 132 cities covered by 4G and became the first mobile network operator in West Africa to demonstrate the capability of 5G technology. We are excited about its potential for our customers and Nigeria’s overall national development plans.”
MTN, which has been pushing an ambitious fintech agenda in Nigeria, recorded revenue growth of 23.3% for the segment, which it says was supported by increased adoption of MTN Xtratime, its airtime lending service.
Furthermore, the telco says it launched a super-agent service in August and is pleased with the initial rollout and uptake.
“We closed the year with a network of 108 000 agents registered nation-wide. The agent network served almost one million customers in the first four months of operation, and we are maintaining our focus on further expansion,” says Moolman.
To cater to a broader market and encourage further adoption, MTN says it is widening the service offering – from basic transfer service and airtime/data sales, to a more extensive bouquet, including cash deposit and withdrawal services, bill payments and facilitating e-commerce.
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