MTN says it has shown resilience in dealing with load shedding in its quarterly update for the period ended 31 March 2023.
Overall group service revenue grew by 15.6% (15.1% when accounting for constant currency change), which was due to voice revenue growth of 6.6% (4.7%), data revenue increasing by 26.9% (27.6%) and the growth in fintech revenue of 11.5% (17.9%.)
MTN also reported the following figures:
- Total subscribers increased by 5.2% to 290.6 million
- Active data subscribers are up by 11.9% to 140.4 million
- Active Mobile Money (MoMo) users are up by 5.2% to 61.7 million
- Data traffic increased by 19.3% to 3,221.26 PB
- Fintech transaction volumes increased by 38.8% to 4.1 billion
The group’s results can be seen below:
“MTN’s resilient business model and operational execution enabled us to continue to successfully navigate difficult macroeconomic, geopolitical and regulatory conditions in Q1 2023, ” Group President and CEO Ralph Mupita said.
“The blended inflation across our footprint remained elevated and averaged 18.5% in Q1 2023, compared to 11.5% in Q1 2022. Interest rates increased during the period as central banks acted to curb inflation.”
“Higher inflation and interest rates weighed on consumers’ spending power and impacted business activity. Local currencies generally weakened against the dollar, and foreign exchange availability was limited in several of our key markets, affecting the pace of capital expenditure and our ability to upstream dividends and management fees.”
MTN SA performance
Mupita said that the reduced economic activity in South Africa was exacerbated by constant load shedding.
“Over and above reduced economic activity in South Africa, MTN SA network availability remained under pressure due to ongoing power outages across the country: there were approximately 90 days of load shedding in Q1 2023 compared to 14 days in Q1 2022.”
Despite the trading environment, MTN SA said its performance was resilient in Q1.
MTN SA said it achieved relatively resilient service revenue growth of 1.3% and increased its total number of subscribers by 4.1% YoY to 35.9 million.
Data was the key growth driver for the businesses, contributing 47.9% to MTN SA’s total service revenue in the quarter.
The impact of load shedding reduced the revenue in the prepaid consumer business unit (CBU) by 5.0%, with the performance in postpaid voice also affected by load shedding.
Due to load shedding, MTN SA reported a softer EBITDA in Q1 (6.5% lower) – a contraction of 3.7pp in EBITDA margin to 36.2%.
Network resilience plan
MTN said that work to upgrade its key sites as part of a comprehensive network resilience plan continued in Q1 2023.
MTN said that the new plan includes upgrading rectifiers, adding additional battery capacity – allowing for a minimum of six hours of battery autonomy – and increasing the number of static and mobile generators.
It added that it was piloting solar solutions in some sites.
Moreover, in areas with higher risks of vandalism, additional security measures are being deployed, with other infrastructure changes, such as replacing copper cables with aluminium, also being implemented.
MTN SA outlook
It said that load shedding and other macroeconomic conditions will continue to impact service revenue progression and costs.
However, it noted that there are several initiatives in place to circumvent the prevailing market conditions, such as new commercial offerings, cost optimisation and further investments to ensure that its network is resilient.
It added that the postpaid price increases, effective from April 2023, will likely help improve top-line growth in the businesses and help mitigate the effects of inflation on the businesses. The increase should also help mitigate the decline in voice and improve data performance for the rest of the year.
“We anticipate that the combination of improved network availability, acceleration of Cell C moving traffic onto the MTN network and selective price optimisation initiatives will result in improved service revenue development in H2 2023,” it said.