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MTN Nigeria Reports N400.7 Billion Profit as Subscribers Rises by 74.1 Million in Nine Months

MTN Nigeria adds 5.7 million subscribers to its total mobile subscribers in the first nine months that ended September 30, 2022.

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Karl O Toriola - Investorsking.com

MTN Nigeria continues to grow despite headwinds, adding 5.7 million subscribers to its total mobile subscribers in the first nine months that ended September 30, 2022.

Mobile subscribers grew by 9.7% to 74.1 million year-on-year. Active data users also increased by 14.6% or 3.7 million to 38 million, the telecommunications giant reported in the unaudited financial statement obtained by Investors King.

Similarly, active fintech subscribers rose 68.7% to 11.2 million with MoMo wallets accounting for 1.8 million since the company started MoMo operations a few months ago.

Service revenue increased by 20.6% to N1,452.7 billion, while Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 23.0% to N780.6 billion.

Profit before tax grew by 24.7% to N400.7 billion. MTN Nigeria paid N139.5 billion as income tax for the period and posted a profit after tax (PAT) of N269.0 billion, a 22.1% year-on-year gain.

Earnings per share rose by 22.1% to N13.20 kobo

Commenting on the company’s performance, MTN Nigeria CEO Karl Toriola, said “Our operating environment remained challenging in the first nine months of 2022. The ongoing global macroeconomic and geopolitical volatility continued to drive up energy, food and general inflation, with the annual inflation rate in Nigeria rising to a 17-year high of 20.8% in September 2022. Supply chain uncertainties were exacerbated by the availability of foreign currency needed for capital expenditure.

“These headwinds continue to put severe financial pressure on consumers and businesses.”

“Against this backdrop, we continued to support our communities and sustain investment in the coverage and capacity of our 4G network and the rollout of 5G sites, with a focus on expense efficiencies and disciplined capital allocation. This has underpinned a resilient commercial and financial performance in the period, also enabled by the unwavering support of our customers and stakeholders, as well as the hard work and commitment of our people.”

Speaking on growth, he explained that “We added 5.7 million mobile subscribers in the nine months bringing our base to 74.1 million, notwithstanding an increase in churn in Q3 2022. This was expected following the NCC’s directive to restrict outgoing calls for subscribers whose SIMs are not associated with NINs. As a result, there was a marginal quarter-on-quarter decline in mobile subscribers by approximately 57k.

“Encouragingly, the increase in churn was largely offset by the acceleration in gross connections. We anticipate a moderation in churn in Q4, which should support base growth broadly in line with our expectations for FY 2022.”

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

MTN Nigeria Grapples with Network Disruptions from Overseas Cable Damage

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MTN Nigeria - Investors King

MTN Nigeria is currently contending with network disruptions stemming from damage to an overseas undersea cable, causing widespread inconvenience for its customers.

The telecommunication giant confirmed the issue in a statement, acknowledging the connectivity disruptions experienced by its subscribers.

Reports indicate that the glitch has affected both voice and data services, resulting in communication disruptions for millions of subscribers across the country.

Subscribers have expressed frustration on social media platforms over the prolonged network outage, with complaints ranging from failed call attempts to concerns about the failure to receive bank alerts.

MTN Nigeria assured its customers that it is actively working to resolve the issue and restore services as quickly as possible.

The telecom operator emphasized the critical importance of consistent internet and communication services, pledging to swiftly address the disruptions.

Efforts are underway to reroute traffic through alternative network paths and expedite the repair process for the damaged cables in collaboration with consortium partners.

Despite the challenges, MTN Nigeria remains committed to minimizing service interruptions and maintaining connectivity for its customers.

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Telecommunications

Airtel Africa Mulls IPO for Mobile Money Unit, Eyeing $4 Billion Valuation

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Airtel Financial Results - Investors King

Airtel Africa Plc, led by billionaire Sunil Mittal, is contemplating an initial public offering (IPO) for its mobile money unit, Airtel Money, in a move that could potentially value the division at over $4 billion.

Sources familiar with the matter revealed that discussions have been held with potential advisers regarding the IPO, with considerations for a listing as early as this year.

While Airtel Africa has not made a final decision on the listing venue, executives are reportedly exploring options across bourses in the United Arab Emirates, London, and Europe.

However, it is cautioned that the firm might ultimately choose not to proceed with the offering, and details regarding the timing and valuation of the IPO remain preliminary.

Airtel Money stands as the telecom operator’s fastest-growing division, experiencing significant traction in Nigeria, its largest market.

The expansion of its mobile money services in Nigeria aligns with the government’s efforts to promote cashless transactions, driving the division’s growth trajectory.

The potential IPO comes on the heels of previous investments in Airtel Money, with TPG injecting $200 million at a valuation of $2.65 billion in 2021, alongside a $100 million investment from MasterCard Inc.

The wireless carrier had previously hinted at a possible listing for the business within four years.

Africa’s burgeoning fintech landscape, coupled with a young population increasingly adopting digital banking solutions, presents a fertile ground for Airtel Money’s expansion.

As of the first half of 2024, Airtel Money recorded a transaction value of $56 billion across its operations in 14 markets, reflecting its significant market presence and potential for further growth.

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Telecommunications

Interswitch Ventures into Telecoms Sector with $1.08 Million MVNO License Acquisition

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interswitch limited

Interswitch, the leading Nigerian payments giant, has made a strategic move into the telecommunications sector by acquiring a Tier 5 Mobile Virtual Network Operators (MVNO) license for ₦500 million ($1.08 million) from the Nigeria Communications Commission (NCC) in May 2023.

This bold step marks Interswitch’s foray beyond its traditional payments domain into providing telecommunications services, leveraging its extensive infrastructure and customer base.

The company’s financial report revealed plans to explore a capital-efficient virtual telecoms model using the acquired license, blending payments and telecoms services for both business-to-business (B2B) customers and consumers.

With the highest tier MVNO license in Nigeria, Interswitch is empowered to negotiate with established telcos in the country and offer asset-light telecom services, particularly in underserved regions.

Interswitch aims to utilize its telco partner’s infrastructure to introduce value-added services to consumer segments traditionally overlooked by mainstream telcos.

This strategic move aligns with Nigeria’s broader objective of increasing mobile connectivity, particularly in rural areas where access remains limited.

The Nigerian telecommunications sector experienced a slowdown in growth recently due to reduced foreign investment, prompting the NCC to issue 25 MVNO licenses in 2023 to foster competition.

Interswitch’s entry into the telco space could inject fresh competition and innovation, leveraging its vast customer base, including over 50 million Verve debit cardholders.

However, to effectively compete in Nigeria’s dynamic telco market, Interswitch will need to offer compelling telecommunications services and forge strategic partnerships with established telcos.

The company’s success in this endeavor will hinge on its ability to introduce innovative communication solutions and value-added services tailored to meet the diverse needs of Nigerian consumers.

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