MTN Group has published a quarterly update for the period ended 30 September 2021, showing continued strong growth.
MTN South Africa saw service revenue growth of 7.7% YoY, supporting 14.1% YoY growth in earnings before interest, taxes, depreciation, and amortisation.
Total subscribers increased by about 849,000 in the quarter to 33.5 million, driven by strong connections in prepaid subscribers, which were up by around 552,000 to 26 million, it said.
The growth was further supported by an increase in 4G customers. The postpaid subscriber base closed at 7.6 million, with about 300,000 subscribers added in the quarter, aided by strong churn management but with some impact from store closures arising from the civil unrest in July 2021.
MTN has also concluded a new multi-year national roaming agreement with Telkom. Effective 1 November 2021, MTN SA will provide 2G, 3G and 4G services to Telkom.
“This agreement aligns with the group’s strategy to monetise the investments it has made in networks and continue to build on the network as a service (NaaS) platform, where MTN SA is a key driver,” it said.
Other key financial statistics include:
- Group service revenue is up by 19.1%;
- Group data revenue is up by 34.5%;
- Group fintech revenue is up by 35.0%;
- Group earnings before interest, tax, depreciation and amortisation (EBITDA) is up by 24.1%;
- MTN South Africa service revenue is up by 7.7%, with an EBITDA margin of 41.6% (from 39.3%);
- Active data subscribers increased by 4.1 million to 119 million;
- Active MTN Mobile Money (MoMo) customers increased by 2.2 million to 51.1 million.
Group president and CEO Ralph Mupita, said: “The MTN Group recorded a solid Q3 2021 trading performance, tracking positively against our medium-term targets with double-digit service revenue growth and the expansion of EBITDA margins.
“This was delivered through solid commercial momentum and the ongoing execution of our Ambition 2025 strategy in challenging Covid-19 macroeconomic and trading conditions.”
While MTN’s outlook is broadly positive, it pointed to South Africa’s high jobless rate as a potential source of concern going forward.
“South Africa, rising unemployment is a concern and may impact growth from prepaid customers in the lower-income segment in the near-term, if measures such as the temporary employee relief scheme (TERS) benefit are withdrawn.
“With the economy opening up and some prepaid customers now travelling to work, there is competition for share of wallet from other spend categories,” it said.
MTN said that it continues to prioritise the wellbeing of its employees through work-from-home measures as well as strict protocols for those who are unable to work remotely.
“As more vaccines become available and vaccination rates begin to increase across our markets, we expect that government lockdown restrictions will continue to ease. In preparation for this shift, we are pursuing a hybrid-working policy, with a mix of on-site and work-from-home solutions, for staff.
“With regards to our expense efficiency programme, we are working with Microsoft and Google on taking over 80% of our network and IT workloads over time, into the cloud. After Q1 2022, we will provide updates on the outcomes of this work and the benefits we expect to realise from the virtualisation of our workloads over time.”
Mupita said that the group is focused on executing its Ambition 2025 strategy. “Our capex guidance for 2021 is R31.1 billion, with increases in spending driven by accelerated rollout in MTN SA and MTN Nigeria to capture growth opportunities from explosive data traffic that we are experiencing,” he said.