Since its initial public offering (IPO) in 2018, MTN Ghana has witnessed a remarkable surge in its share price, more than doubling from GH₵ 0.75 to over GH₵ 2.
This impressive growth trajectory has caught the attention of investors and market analysts alike, prompting a closer look at the factors driving the company’s success.
Dela Herman Agbo, CEO of EcoCapital Investment Management Ltd., attributes this growth to several key factors, which has been on the back MTN Ghana’s consistent financial performance has been a cornerstone of investor confidence.
He highlights the company’s robust revenue growth, particularly in data and digital services, as well as its ability to maintain healthy profit margins through effective cost management.
The 2023 annual report of MTN Ghana corroborates Agbo’s assessment, revealing a 34.6 percent year-on-year increase in service revenue. This growth was primarily driven by voice, data, and Mobile Money services, despite a 6.3 percent decrease in the subscriber base due to a national SIM re-registration exercise.
MTN Ghana’s commitment to infrastructure development has played a crucial role in its success. In 2023, the company invested GH₵ 3.3 billion in core capital expenditure, focusing on modernizing infrastructure and expanding network coverage. This investment resulted in the deployment of hundreds of new 2G, 3G, and 4G sites, achieving an impressive 99.3 percent 4G population coverage.
The success of MTN Mobile Money (MoMo) has been another significant growth driver. Agbo notes, “The rapid adoption of MoMo and the increase in transaction volumes have made mobile financial services a key revenue contributor for MTN Ghana.” The annual report supports this claim, showing a 48.8 percent year-on-year increase in Mobile Money revenue to GH₵ 2.9 billion.
Data services have emerged as a powerhouse for MTN Ghana, with revenue growing by 50.9 percent year-on-year to reach GH₵ 5.8 billion. This growth was driven by increased data consumption per user and successful pricing initiatives. The data segment now contributes 43.9 percent to total service revenue, up from 39.2 percent the previous year.
Despite facing challenges such as the national SIM re-registration exercise and macroeconomic headwinds, MTN Ghana managed to contain cost increases to 27.5 percent year-on-year, significantly below the average monthly inflation rate of 40.2 percent for the year. This operational efficiency contributed to a 40.2 percent growth in EBITDA, with the EBITDA margin increasing to 58.4 percent.
Agbo also highlights the importance of Ghana’s supportive regulatory environment in MTN’s success. “Government initiatives promoting digital and financial inclusion have benefited MTN, while the company’s proactive compliance with regulatory requirements has enhanced its operational stability and investor trust,” he states.
The completion of the national SIM re-registration exercise in May 2023 led to the blocking of 5.4 million unregistered SIMs. However, MTN Ghana remains committed to supporting customers through the re-registration process, with 0.6 million SIMs already re-registered by the end of 2023.
MTN Ghana appears well-positioned for continued growth. The company’s strategic investments in 4G and 5G technologies, coupled with its focus on digital transformation, are expected to drive future innovation and maintain its market leadership.
