MTN Nigeria reports strong 17.2% rise in revenue amid regulatory bottlenecks 

• Active data users declined marginally by 71,000 to 32.5 million

• Declares profit before tax of N385.3bn

Charles Abuede

Nigeria’s leading telecommunication giant, MTN Nigeria, has announced a 33.9 per cent growth in its profit before tax to N102.9 billion during the first quarter of 2021 despite the regulatory directives which saw Nigeria’s Communications Commission (NCC) put a bar on the registration and sales of new SIM cards, devices by network operators until costumers are able to link their national identification numbers (NIN) to their respective telephone lines.

The aim, according to the regulatory body was to hunt down illegal activities of con stars as well as kidnapping across the country which posed a threat to the safety of citizens. The directive was, however, trailed by reactions from the public on the motive behind the order in the face of COVId-19 where social distancing is paramount and the lack of facilities to help fast track the achievement of the oftentimes set deadline.

In the unaudited results for the quarter ended March 31, 2021, filed to the Nigerian Exchange,  MTN Nigeria revealed that there was a 17.2 per cent rise in its service revenue to N385.3 billion which is in line with its medium-term target as it was supported by the significant growth of 42.6 per cent and 8.0 per cent recorded in data and voice revenues respectively. The company further stated that as of the end of April 2021, over 35 million subscribers have submitted their NIN which represents about 50 per cent of the subscriber base and 63 per cent of service revenue. Although the network’s mobile subscribers declined by 5 million to 71.5 million due to the effects of customer churn and the regulatory restrictions on new SIM sales and activations, its, active data subscribers declined marginally by 71,000 to 32.5 million.

Further revelation from the financials of the company highlighted that the digital revenue grew by 101.0 per cent and fintech revenue by 28.5 per cent as customers continued to adopt more digital products and services, a trend accelerated by the pandemic. As at the end of March 2021, MTN Nigeria had 449,100 registered MoMo agents and 4.6 million fintech customers. Similarly, MTN’s ability to drive service revenue growth while managing the growth in expenses resulted in an acceleration in EBITDA growth to 19.1 per cent to N204.5 billion and EBITDA margin expansion of 0.9pp to 53.1 per cent year on year. This enabled profit before tax (PBT) and profit after tax (PAT) growth of 33.9 per cent and 42.5 per cent to N102.9 billion and N73.8 billion respectively.

Commenting on the result,  Karl Toriola, the Chief Executive Officer, MTN Nigeria, said: “We made good progress in the first quarter of 2021 despite the continued impact of the COVID-19 pandemic. We continue to prioritise the safeguards put in place to protect the health and well-being of our people, customers and stakeholders and to control the spread of the virus while ensuring network resilience and efficiency.

As part of our Y’ello Hope initiatives, we continue to support Government’s efforts in combatting the COVID-19 pandemic. We supported the most vulnerable in our communities, providing them with free-to-access services (including SMS and data) as well as essential medical supplies (tests and personal protective equipment). We continue to support the Coalition Against COVID-19 (CACOVID) that has driven multiple initiatives, such as building isolation centres across the country. MTN Nigeria also paid taxes early in support of the Government’s ongoing efforts. In addition, our REVV support programme for Micro, Small and Medium Enterprises (MSME) helps them navigate the new digital reality,” he said.

Speaking on the outlook for 2021 and subsequent quarters of the year, Karl, on the behalf of the company board, stated that MTN’s priorities remain unchanged as its focus stays clear on sustaining double-digit revenue growth, driving 4G network expansion and positioning our fintech business for accelerated growth in order to unlock its full value. The acquisition of an additional 800MHz spectrum positions us to deliver improved service speeds to Nigerians in support of the Government’s broadband initiative.

“As the economy continues its steady recovery from the effects of the COVID-19 pandemic that impacted the business in 2020, we anticipate that the base effects will partly influence our commercial and financial trends in the remainder of the year. Although the availability of foreign exchange remains a constraint, we strive to minimise its impact on the business. Finally, we will continue to manage and invest in the resilience of our business and networks as we monitor the longer-term economic potential impacts of the pandemic,” Karl revealed.