Telecoms firm MTN Uganda reported on Wednesday strong growth in full-year revenue and operating profit, helped by increases in income from outgoing voice calls, data revenue, and mobile money revenue.
The subsidiary of the Johannesburg-listed MTN Group posted an operating profit of 1.9bn rand (Shs514.6bn at the close of 2019) in 2019, up 56.3% from a year ago. In comparison, operating profit rose 29.3% year on year to R1.2bn in 2018.
The company’s strong performance was boosted by a 23.5% increase in revenue to R6.7bn (Shs1.7 trillion), up from the 4.4% growth registered in 2018.
Outgoing voice revenue was up 16.2% to R3.3bn and was the biggest contributor to revenue growth, according to results released by the MTN Group in Johannesburg. Data revenue rose 51.8% to R1bn, while fintech revenue — which includes mobile money, insurance, airtime lending and e-commerce — increased by 25.6% to R1.6bn.
MTN Group said voice revenue growth was largely a result of “a 12.2% increase in subscribers and higher minutes of use.” MTN Uganda ended 2019 with 12.6m subscribers, up from 11.2m at the end of 2018, according to the results.
“The phenomenal growth in data can be attributed to a 52.1% increase in active users and a 2.2% improvement in smartphone penetration to 21.4%. Likewise, mobile money growth benefited from an 18.8% expansion in its base of active users that was buoyed by focused customer value management seeding campaigns.”
MTN Uganda’s active data subscribers were 3.4m at the end of 2019, while mobile money subscribers had risen to 7.4m.
|Active data subscribers*||2,236||3,402||52.1%|
|Mobile money subscribers*||6,264||7,441||18.8%|
|Market share (%)||53.8%||54.7%||0.9%|
Operating expenses came in at R3.5bn, 3.1% higher than in 2018. That was a muted increase compared to the growth in revenue. It was also slightly higher than 2018’s growth of 1.3%.
A sharp jump in government and regulatory costs to R234m from R77m in 2018, a result of the telecoms licence renewal negotiations with the Uganda Communications Commission, pushed up operating expenses. Commissions also rose 14.8% to R1bn, while staff costs reached R401m from R310m in 2018.
However, network and infrastructure maintenance expenses fell 24.3% to R859m and other operating expenses declined to R400m from R499m a year earlier.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) were R3.1bn in 2019, up 59.1% from a year ago, driven by stronger revenues and the low single-digit operating expenses growth.
MTN said it is in licence renewal negotiations with the Uganda Communications Commission, following the expiry of its 20-year licence in October 2018. It is currently operating on a provisional licence that expires this June.
“During December 2019, the UCC communicated to all telecom operators that all existing licences would continue to be in force until 30 June 2020, at which time a new framework will take effect,” it said. “MTN Uganda expressed to the UCC its interest to apply for a national telecommunications operator licence under the new framework.”