Nigeria’s largest mobile network operator, MTN Nigeria, announced that mobile subscribers declined by 7.6 million to 68.9 million, impacted by the regulatory restrictions on new SIM sales and activations. Similarly, the Telco giant’s active data users declined by approximately 52,000 to 32.5 million.
MTN Nigeria Communications Plc (MTN Nigeria) made this known in its unaudited results for the half-year ended 30 June 2021, as well as plans to celebrate its 20th anniversary with numerous national impact projects.
In the result made available to Brand Spur, MTN Nigeria’s service revenue grew by 24.1% YoY, driven by the sustained growth in data and also partly due to the lower base in comparative 2020 voice revenue that resulted from lockdowns during that period.
- Voice revenue grew by 13.1%, benefitting from an 11.8% increase in traffic and their
customer value management (CVM) initiatives. The impact on voice revenue from the
industry-wide suspension of new SIM registration was partly offset by higher usage
in its active SIM base as well as migration to a higher quality of experience.
- Data revenue continued the positive momentum from H2 2020, rising by 48.3%. This
was driven by increased usage from the existing base, supported by the acceleration in our 4G rollout and enhanced network capacity following the acquisition and activation of an additional 800MHz spectrum in Q1.
- Data traffic rose by 83.0% YoY, while smartphone penetration was up by 5.8pp to 49.3%. Our 4G network now covers 65.1% of the population, up from 60.1% in December 2020.
- Fintech revenue rose by 48.2%, driven by increased adoption of Xtratime and its core fintech services. MTN Nigeria continues to expand its MoMo agent network and broaden service offerings. The company’s registered MoMo agents increased by 121,000 in H1 2021 to more than 515,000. Transaction volume increased by 280.8% YoY to 55.6 million in H1 2021, and the active subscriber base is now more than 6.1 million, up 180.0% YoY.
- MTN Nigeria’s digital business continued to gain traction on the back of a strong partner ecosystem and the uptake of our products and services. Digital revenue rose by 61.8%, also supported by its rich media and value-added services. The active user base rose by 38.0% to over 3.9 million, led by Ayoba – our instant messaging platform – with more than 2.3 million active users.
- The enterprise business revenue increased by 6.0%, demonstrating the continued
recovery from the impact of the COVID-19 lockdown and the uptake of our services
by the businesses we serve. MTN Nigeria made significant progress in concluding the
operational modalities for the new pricing framework for USSD services, which incorporates the recovery of outstanding USSD debts.
- MTN Nigeria continues to pursue and realise efficiency through cost discipline and enhanced digitisation. However, due to an accelerated site rollout, the effects of Naira depreciation on lease rental costs and Covid-19 related expenditure, operating expenses increased by 24.6%. Its continued ability to drive operating leverage helped to drive EBITDA growth to 27.6%, with a 1.4pp expansion in EBITDA margin to 52.7%.
Capital expenditure in the period was 39.1% higher to N186.4 billion, as we continued
to invest in our network to maintain service quality and aggressively expand our
footprint in terms of 4G and rural coverage. We recorded a healthy free cash flow of
N230.8 billion, up by 19.6%.
Despite a 50.6% increase in core CAPEX excluding the right of use assets to N114.5 billion, CAPEX intensity remained within target levels at 14.5%. Depreciation and amortisation rose by 17.1% and net finance cost was down by 9.8%, resulting from a lower average cost of borrowings. Overall, MTN Nigeria recorded a PBT growth of 54.1%, also reflecting the softer base of H1 2020.
Commenting on the results, MTN Nigeria CEO Karl Toriola said:
“In the first half of 2021, we made good progress strengthening the resilience of the business, managing the impact of the COVID-19 pandemic and enhancing support to our people, customers and other stakeholders.
We extended our commitment to the Coalition Against Covid-19 (CACOVID) with an additional N3 billion contribution over a two-year period, half of which has already been paid.
This is in support of efforts to promote the health and security of Nigerians, as we navigate our way through the pandemic; and in line with our Y’ello Hope initiatives through which we provided support to our broad base of stakeholders to the value of approximately N25 billion in 2020.
Our progress towards achieving greater business resilience is reflected in the upgrade by Global Credit Ratings (GCR) of our national scale long-term issuer rating to AAA and affirmation of our national scale short-term rating of A1+ with a stable outlook. This puts MTN Nigeria on the highest possible GCR scale for short-term and long-term ratings, providing a solid platform for growth.
2021 marks the 20th anniversary of MTN’s presence in Nigeria. As we celebrate this milestone, we are pleased to announce that our Board of Directors has approved our participation in the Road Infrastructure Tax Credit (RITC) Scheme. This is in response to the Government’s drive towards public-private partnerships in the rehabilitation of critical road infrastructure in Nigeria.
We intend to participate in the restoration and refurbishment of the Enugu-Onitsha Expressway. Conversations in this regard have already commenced, and further announcements will be made in due course.
In line with our desire to plant deeper and more permanent roots in Nigeria, we have also initiated plans to commission a purpose-built, state of the art MTN Head Office, designed to act as a central hub for our network, a catalyst for creativity and innovation, and a showcase for the flexible working structures that are driving efficiency gains in this new normal working environment.
Aligned with our wider commitment to environmental sustainability, it will meet the highest global environmental standards, demonstrating the role of green technology in our future.
Following MTN Group’s stated intention to sell down up to 14% of its investment in MTN Nigeria, subject to market conditions over the medium-term, MTN Nigeria’s shareholders approved an equity shelf programme at the last Annual General Meeting. This will facilitate a process to increase ownership of the Company by more Nigerian retail and institutional investors.
Alongside this, we further localised our predominantly Nigerian management team with the appointment of Nigerians to two key senior positions (Chief Marketing Officer and Chief Information Officer) previously held by expatriates.
MTN Nigeria continues to invest in improved world-class services and its network, accelerating the expansion of our 4G coverage and providing home broadband. As part of our rural connectivity programme, we plan to connect approximately 1,000 rural communities to our network this year with additional 2,000 communities in 2022.
We are delighted that these are translating into strong operational performance in line with the objectives of Ambition 2025. In the next 3 years, we will invest over N600 billion to expand broadband access across the country in support of the Government’s Broadband Plan.
Operationally, our mobile subscribers closed H1 at 68.9 million, down 9.9% from December 2020. This was due to the regulatory restrictions on new SIM sales and activations, which was lifted on 19 April 2021.
Although the initial run-rate of additions has been slower than usual due to new process requirements, we anticipate growth to normalise in the short term as more of our acquisition centres are certified for SIM registration.
Finally, our Board of Directors has approved an interim dividend of N4.55 kobo per share to be paid out of distributable net income. This represents a growth of 30% over N3.50 kobo per share paid in H1 2020.”