MTN Group service revenue plunges 18.8% in Q1 2024, fintech revenue up 11.4%

• The telecommunications provider, MTN Group has reported an 18.8% fall in Q1 service revenue compared to Q1 2023. However, in constant currency, service revenue, which excludes device and SIM card revenue, increased by 11.1%.

• The decline in service revenue was contributed by MTN Nigeria”s 52.8% decline to R10.2 billion ($553.7 million) compared to R21.7 billion ($1.18 billion) in the same period last year. MTN South Africa, however, grew marginally by 3%.

• MTN says the performance was affected by the macro environment in Q1 2024 including ongoing high inflation, local currency devaluations in some of its key markets, as well as geopolitical tensions in markets like Sundan.

However, inflation reduced to 13.7% in Q1 2024; compared to 18.5% in Q1 2023 and 15.4% in Q4 2023, MTN analysed.

While commenting on the report, Group President and CEO Ralph Mupita mentioned that the telco was also impacted by cable cuts that resulted in downtime for significant subsea cables connecting the African continent, particularly in West Africa.

In March 2024, several African countries experienced Internet outages due to significant subsea cable damage where cable companies like the West African Cable System (WACS), African Coast to Europe (ACE) on the West Coast route from Europe, as well as SAT3 and MainOne were affected.

The group’s fintech transaction volumes increased by 18.3% to 4.8 billion. Also, its fintech revenue went up by 11.4%. For Mobile Money (MoMo), its monthly active users were up by 6.2% to 65.5 million. In April 2024, MTN MoMo expanded to 10 new countries, adding 25 new wallet corridors to its application for a 4% launch fee. 

The group aims to continue scaling its fintech ecosystem and leveraging partnerships, such as the one with Mastercard, to drive growth and monetisation. Moreover, in February 2024, Mastercard committed to investing $200 million in MTN Group fintech.

“We are also prioritising the accelerated monetisation of Ayoba, as we continue to scale digital advertising,” the CEO added.

Aside from the group’s service revenue, its voice and data revenue decreased by 32.2% and 14.7% respectively. Additionally, overall earnings before interest, tax, depreciation and amortisation (EBITDA) saw a decline, which according to the CEO was impacted by inflation and forex depreciation mainly in Nigeria, network resilience costs and electricity tariff escalations in MTN South Africa and the impact on operations from the conflict in Sudan. However, the EBITDA rose by 3.9% in constant currency.

The CEO revealed that MTN Group invested capital expenditure (ex-leases) of R5.4 billion ($293 million) into networks and platforms, with a capex intensity of 11.8% in the period.

For MTN South Africa, it plans to navigate prevailing conditions by pushing initiatives including price-ups in prepaid plans and revision of data bundle portfolios.

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Also, the group’s report stated that the MTN Nigeria Board has approved the implementation of initiatives it mentioned in its recently released report including regulated tariff increases and reducing dollar exposure.

MTN Group subscribers increased by 1% to 287.6 million despite subscriber registration regulations in Ghana, Nigeria, and conflict in Sudan. Active data subscribers were also up by 7.8% (to 149.2 million) resulting in increased traffic.