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MTN Records Higher Q1 Revenue on Strong Data

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chike onwuegbuchi

MTN's first quarter revenue was bumped up 7.1% by a data revenue spike of 29.4% year-on-year. This is according to the telecoms operator's quarterly update for the three months ended 31 March, just released.

Data revenue now contributes 20% to total revenue for the SA-headquartered telco, which saw voice traffic (billable minutes) increase by 2% and total data traffic by 145%.

Group subscribers, however, dropped by 1.5% quarter-on-quarter, to almost 237 million "largely as a result of restatements to subscriber numbers in Ghana, Rwanda and Zambia". Year-on-year total subscribers grew by 3% in MTN's 22 operations across Africa and the Middle East.

"While our reported subscriber numbers are lower than we had expected, this is largely the result of an ongoing review of subscriber definitions. We are planning to further modernise our internal subscriber definitions to more closely align with the changing mix of revenue streams and will report on this at the end of the first half of 2017," according to Rob Shuter, new MTN group president and CEO.

"In our key markets of SA, Nigeria and Iran, significant network investments made over the past few years are underpinning the improving revenue trends. The network investment planned for 2017 is expected to support further market share gains across our markets," added Shuter.

Network improvements have seen year-to-date capital expenditure of R4.6 billion so far.

He said the firstthree months of 2016 saw a continuation of the improving operational momentum experienced in the fourth quarter of 2016, but acknowledges MTN still has work to do to meet its full-year targets.

Shuter moved from Vodafone in Europe to take up the top job at MTN last month, while fill-in leader Phuthuma Nhleko reverted back to his role as non-executive chairman.

Nhleko took over as executive chairman in an interim capacity in early November 2015 after former group CEO Sifiso Dabengwa resigned.

This as the group faced a $5.2 billion (R71 billion at the time) fine from the Nigerian Communications Commission for failing to disconnect 5.1 million unregistered SIM cards in the country.

In June 2016, after months of negotiations, MTN agreed to pay $1.671 billion (R25 billion at the time) to the federal government of Nigeria, in six instalments over three years, to settle the fine.

MTN Nigeria had a strong start to the year with an 11.6% increase in total revenue, supported by a 71.3% boost in data revenue. MTN says while the momentum is encouraging, the ongoing review of value-added services subscribers will put pressure on digital revenue for the balance of the year.

MTN Nigeria's subscriber base declined by 2.3% quarter-on-quarter. This was impacted by new regulations that require all subscriber connections to take place in permanent brick-and-mortar structures. It says this led to a marked reduction in gross connections across the industry.

MTN Nigeria has also continued with the process of excluding subscribers whose only activity is receiving incoming SMSes.

"The ongoing network investment in Nigeria is delivering continued improvements in data quality in the metro areas and highlights MTN group's commitment to the Nigerian market, notwithstanding the challenging macro environment," Shuter said.

MTN says a focus on the rollout of its Nigerian data network remains a key element in the group's medium-term growth strategy.

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