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MTN Reports N298.7 Billion Profit Despite Subscribers Declining by 8 Million to 68.5 Million in 2021

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MTN Nigeria - Investors King

MTN Nigeria Communications Plc grew profit after tax by 45.5 percent to N298.7 billion in the financial year ended December 31, 2021.

The telecom giant disclosed in its audited financial statements released on Friday.

Mobile subscribers decreased by 8 million to 68.5 million, largely due to SIM activation and sales suspension. Investors King understands that mobile subscribers rose in the final quarter of 2021.

Active data users grew to 34.3 million in the year under review, an increase of 1.7 million when compared to the same period of 2020. ACtive fintech subscribers increased by 4.8 million to 9.4 million, while service revenue increased by 23.3 percent to N1.7 trillion.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 27.9 percent to N877.1 billion. Earnings per share (EPS) rose by 45.5 percent to N14.67 kobo.

MTN Nigeria proposed a final dividend of N8.57 kobo per share.

Commenting on the company’s performance, Karl Toriola, CEO, MTN Nigeria, said “2021 was a significant year for our Company. We commemorated our 20th anniversary with a celebration of our customers and all the stakeholder relationships that enabled our journey. In addition, we made good progress towards our Ambition 2025 objectives, demonstrating the strength and resilience of the business.

“This reflects the firm foundations on which our business is built, the tenacity and commitment of our people, and the support of our stakeholders. We continue to deepen our contributions to society in line with our priority to enhance shared value. During the year, our total contribution to the Government through direct and indirect taxes was N669.2 billion, up 83.4%, representing approximately 40% of our total revenue.

“We extended our interventions, in response to the challenges to our nation arising from the COVID-19 pandemic, providing a further N1.5 billion to the Coalition Against Covid-19 (CACOVID) in support of efforts aimed at curbing the spread of the virus. This is supplementary to other interventions to protect the health and well-being of our people, customers and stakeholders. We also worked hard across our business to embed new ways of working while harnessing the opportunities presented by the trends in digital adoption.

“In line with our objective to share our Company’s success with our various stakeholders, the first phase of a series of transactions to increase Nigerian ownership in MTN Nigeria was conducted during 2021 by way of bookbuild to institutional investors and fixed price offer to retail investors (the Offer). The outcome of the Offer will be announced once regulatory approvals have been obtained.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Telecommunications

NCC Files Copyright Infringement Charges Against MTN Nigeria and Others

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Karl O Toriola - Investorsking.com

The Nigerian Copyright Commission (NCC) has taken legal action against MTN Nigeria Communications Ltd. and four individuals, including its Chief Executive Officer, Karl Toriola, over alleged copyright infringement.

The charges, filed in the Federal High Court, Abuja Division, revolve around the unauthorized use of musical works belonging to artist Maleke Idowu Moye.

According to the NCC, the defendants are accused of offering for sale, selling, and trading musical works of Maleke without his consent between 2010 and 2017. These works were allegedly used as Caller Ring Back Tunes without proper authorization.

The musical pieces in question include popular tracks such as “911,” “Minimini-wanawana,” and “Stop racism,” among others.

The commission further alleges that the defendants distributed these musical works to subscribers without authorization, infringing upon the rights of the artist.

The charges are based on provisions of the Copyright Act, Cap. C28, Laws of the Federation of Nigeria, 2004.

As the case awaits assignment to a judge and a fixed date for mention, it marks a significant development in the ongoing efforts to uphold copyright protection in Nigeria’s telecommunications sector.

This legal action underscores the NCC’s commitment to safeguarding the intellectual property rights of artists and creators within the country.

MTN Nigeria, a major player in the telecommunications industry, now faces a legal battle that could have broader implications for how intellectual property rights are respected and enforced within Nigeria’s digital landscape.

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Telecommunications

MTN’s MoMo Sees 32.2% Surge in Transaction Volumes

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MTN Nigeria - Investors King

MTN Group’s mobile money platform, MoMo, has experienced a 32.2% surge in transaction volumes.

With 72.5 million active users, MoMo continues to solidify its position as a leading fintech service provider in Africa, tapping into the continent’s burgeoning mobile banking sector.

The company’s success underscores the growing trend of Africa’s young and tech-savvy population embracing mobile technology to address financial needs.

Mobile phones are increasingly becoming a tool for bridging gaps in services, particularly in banking, presenting a lucrative opportunity for wireless carriers like MTN to capitalize on the burgeoning fintech market.

MTN’s achievement comes as it finalizes a deal with Mastercard Inc., valuing its fintech business at an impressive $5.2 billion.

This strategic partnership further enhances MTN’s position in the digital finance space, positioning it for continued growth and innovation.

However, MTN is not alone in its fintech endeavors. Rivals such as Airtel Africa Plc, Safaricom Plc, and Vodacom Group Ltd. are also making strides in digital transformation, with plans to separate and monetize their fintech businesses in the long term.

Airtel Africa, for instance, is reportedly considering an IPO for its mobile money unit, indicating the high stakes and intense competition within the sector.

Despite the remarkable success in its fintech ventures, MTN faced challenges in its core telecommunications business, with service revenue growth slowing to 6.8%.

Inflation and currency devaluation in key markets, particularly Nigeria, impacted profitability, highlighting the complexities of operating in diverse African markets.

As MTN continues to expand its fintech footprint and invest in infrastructure to enhance connectivity across the continent, it remains poised to capitalize on the immense potential of Africa’s digital economy.

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Telecommunications

Telecom Operators Grapple with Rising Diesel Costs, Spending Hits N50.28 Billion

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Telecommunications - Investors King

As diesel prices continue to soar, Nigeria’s telecom operators are facing mounting challenges with expenditure on fuel hitting N50.28 billion in February.

This represents a 50.20 percent increase from the N33.48 billion spent in the same period last year, reflecting the growing financial burden imposed by escalating fuel costs on the sector.

Diesel serves as a critical component in powering telecom infrastructure, including base stations, which heavily rely on generators due to the country’s unreliable grid electricity.

Industry estimates suggest that operators consume an average of 40 million liters of diesel per month to sustain telecom sites, with prices reaching N1,257.06 per liter in February 2024.

The reliance on diesel for powering essential infrastructure has become increasingly unsustainable, threatening the sector’s operational viability.

Gbenga Adebayo, president of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), emphasized the adverse impact of diesel costs on the industry’s sustainability, noting that infrastructure companies bear the brunt of these expenses.

Adebayo highlighted the urgent need for new pricing regimes to address the widening gap between production costs and current telecom service prices.

While investments in alternative energy sources such as solar power present opportunities for mitigating diesel reliance, challenges such as intermittent supply and vulnerability to theft underscore the complexity of the situation.

The escalating diesel costs have prompted telecom operators to advocate for adjustments in service pricing to ensure the sector’s long-term viability.

As the industry grapples with these challenges, stakeholders are calling for collaborative efforts to address the root causes of the rising fuel expenses and safeguard Nigeria’s telecom infrastructure.

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