In six months since December 2015, MTN Uganda added one million subscribers, growing from 8.9 million to 9.9 million by June 30.
Also, the half year financial results show that in the same period, revenue at Group level increased by 14% to R78, 878 million. But capital investment in Uganda shrunk by 42.1% to 364 million Rand (Shs 88.6 bn) compared to R951 million (Shs 231.48 billion) in 2015. The company had authorised a total of R807 million (about Shs 196 billion) in capex in 2016.
• Group subscriber base flat at 232.6 million
• Uganda total subscriber base 9.9 million
• 195 co-located 3G and 100 LTE sites rolled out in Uganda
• Total group revenue up to R78, 878 million
• Group data revenue up by 32.2% to R19, 849 mn
• Group voice traffic up by 8%
• Data traffic up by 135.3%
• Headline loss per share up to 271 cents
• Interim dividend down to 250 cents per share
According to the press release from MTN Group in South Africa, MTN Uganda`s performance in 2016 is being driven by recovering some of the 3.7 million subscribers that had been disconnected in the second half of 2015 after UCC penalised the company for failing to comply with the SIM card registration directives.
But voice bundle propositions and the continued success of MTN Zone have resulted into a market share growth of 52.7% despite a decline in both outgoing and incoming voice revenue impacted by the implementation of the One Network Area.
On another good note, data revenue increased by 22.7% and contributed 32.8% to total revenue supported by data bundles, including successful shorter-duration bundles unlike in 2015 when data revenue grew by only 8.5% mainly as a result of low 3G handset penetration and cancelled contracts with third party content providers.
Digital revenue contributed 70.5% to data revenue, supported by local content services including MTN Play. However, during the period under review, MTN Mobile Money customers decreased by 24.4% to 7.2 million mainly as a result of the SIM card disconnections in the second half of 2015.
Consequently, MTN Uganda’s EBITDA margin decreased by six percentage points to 30% impacted by higher network operating costs and associated US dollar denominated expenses as well as higher transmission costs following the rollout of a 3G and LTE network.
Massive Nigerian fine takes toll as MTN Group announces 250 cents as dividend
Nevertheless, MTN Uganda total revenue increased by 2.6% supported by outgoing voice revenue, which was underpinned by a 12.5% increase in billable minutes when compared to revenue growth of only 8.5% in 2015 mainly as a result of low 3G handset penetration and cancelled contracts with third party content providers.
A top company official told journalists last month that despite the challenging operating environment in 2015, the market leadership position and revenue growth were secured by continued investment in network and infrastructure, wider product range on Mobile Money, increased data penetration propelled by a push for 3G devices on the network, coupled with attractive data products and serves.
At group level, MTN operates in 22 countries divided into South and East Africa (SEA), West and Central Africa (WECA) and Middle East and North Africa (MENA).
At Group level, the reported results were significantly impacted by the hefty fine imposed by the Nigerian authorities. In June, the company agreed to pay a total cash fine of 330 billion naira (about US$1.67 billion) over three years. The 50 billion naira (US$250 million) that was earlier paid by MTN Nigeria in February formed part of the monetary component of the settlement, leaving a balance of 280 billion naira (US$1.41 billion). The company has so far paid 80 billion naira. The company stated that the fine had a negative impact of R10, 499 million on reported EBITDA and a R8, 632 million negative impact on the Group’s reported headline losses, or 474 cents on reported headline losses per share. The reported impact on the Group’s statement of cash flow for the period amounted to R5, 870 million, which equates to the 80 billion naira paid during the period.
At the end of last year, the Group declared a second half dividend of 830 cents, which brought the total dividend for 2015 to 1,310 cents. This represented a year on year growth of 5.2%. The company announced that in 2016 they anticipated to declare a minimum dividend of 700 cents largely because of the impact of the Nigerian regulatory fine into consideration. With a half year dividend of just 250 cents, the shareholders can only hope that the second half will be better if the total dividend for the year is to avoid a slump below the projected minimum of 700 cents.