MTN remains bullish about medium-term growth target amid headwinds


…Eyes high 20% in service revenue, with MoMo up 48.8%

By Joshua Worlasi AMLANU & Ebenezer Chike Adjei NJOKU

Telecommunications giant, MTN, remains confident of achieving service revenue growth in the high twenties (in percentage terms) over the medium term, its latest financial statement has affirmed.

The company, a portion of the statement says, remains steadfast in its pursuit of operational excellence, as it emphasises the importance of preserving margins and sustaining bottom-line growth amid current macroeconomic challenges.

Outgoing Chief Executive Officer (CEO), Selorm Adadevoh detailed the company’s dedication to driving expense efficiencies, maintaining liquidity, and fortifying its balance sheet. Despite acknowledging external headwinds affecting the business environment, MTN, he stated,  is resolute in its medium-term service revenue growth target.

“We remain focused on driving further expense efficiencies, preserving liquidity and strengthening our balance sheet. MTN Ghana maintains its medium-term guidance of high-twenties (in percentage terms) growth in service revenue,” Mr. Adadevoh said.

Year in review

MTN reported a 34.6 percent year-on-year (YoY) service revenue growth, attributing the positive performance to well-executed commercial strategies and focused investments in network quality, coverage, and customer service. The growth, the company says, was propelled by the success of voice, data, and mobile money services.

While the national SIM re-registration exercise led to a 6.3 percent YoY decrease in the subscriber base, the telco managed to partially mitigate the impact through “a commitment to high-quality services aimed at attracting new customers and retaining existing ones”.

To enhance customer experience and infrastructure, the company invested GH¢3.3 billion in core capital expenditure to modernize our infrastructure, enhance our IT systems and expand our network capacity and coverage across the country. This included deploying 350 2G, 353 3G, and 350 4G sites, achieving an impressive 99.3 percent 4G population coverage.

Breaking down the revenue sources, voice revenue experienced a nine percent growth to GH¢3.6 billion, and this was attributed to customer value management initiatives offering diverse bundles.

Data revenue surged by 50.9 percent YoY to GH¢5.8 billion, attributed to a 19.3 percent YoY increase in megabyte consumption per active user per month and effective data pricing initiatives. The data revenue contribution to total service revenue rose from 39.2 percent to 43.9 percent from 2022 to 2023.

However, the contribution of voice to total service revenue decreased from 33.1 percent to 26.8 percent, aligning with evolving customer behaviour globally.

“Our focus on developing relevant and well-positioned data packages also contributed to the growth in data revenue,” the CEO said.

Mobile Money revenue appreciated by 48.8 percent to GH¢2.9 billion, contributing significantly to total service revenue, which increased from 19.6 percent to 21.7 percent in 2023.

Partnerships with financial institutions, agents, and merchants facilitated the expansion of the mobile money ecosystem, providing users with convenient and secure financial services.

Despite a 4.7 percent decrease in digital revenue to GH¢137.4 million during the period under review, the second half of 2023 saw sequential growth of 16 percent over the first half.

The number of active digital subscribers increased by 28.6 percent YoY, reaching a total of 4.6 million as the company says it is focused on improving the myMTN application and expanding music and game offerings on its ayoba platform.

The market has yet to react positively to the company’s financials, even recording a 0.7 percent dip in it’s share price – from GH¢1.4 to GH¢1.39 – at the close of trading on Wednesday, February 28, 2024.

Nonetheless, MTN has dominated trading on the Ghana Stock Exchange in the last three months.

During this period, MTN saw a total trading volume of 83.1 million shares, worth GH¢110 million, averaging 1.32 million shares per session.

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