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MTN Uganda records 12.5% growth in revenue

The telco is said to have agreed to pay $100-million for the renewal of its operating licence

Kampala, Uganda | ISAAC KHISA | A double digit growth in data and mobile money services helped MTN Uganda to record a 12.5% growth in revenue to Shs1.4trillion last year compared with 2018. Financial results released by MTN Group shows that MTN Uganda’s data and mobile money registered a 39.7% and 13.9% growth in revenues, respectively, driven by increase in customer numbers as well as smartphone penetration.

The company’s subscribers increased from 11.3 million in 2018 to 12.6 million last year as more of the population acquired mobile phones.

Similarly, the company’s data subscribers increased from 2.24million to 3.4million during the same period under review and so is mobile money subscribers that increased from 6.3milliion to 7.4million.

However, the firm’s voice revenue recorded a mere 3.4% growth driven by an increase in subscriber numbers and high minutes of use (MOU).

This development comes as MTN Uganda agrees to pay $100-million for the renewal of its operating licence which expired in 2018, ending a long running delay.

Currently, operating on a temporary licence, the South African-based company had wanted to pay $58million for another 20-year period.

However, President Yoweri Museveni questioned the amount, prompting the industry regulator, Uganda Communications Commission (UCC) to reverse the decision. The company will also be required to list some of its stake as a condition for licence renewal.

In terms of group performance, the company reported a 9.7% growth in its revenue for the year, bolstered by a 12.6% increase in Nigeria and 22.9% in Ghana. However, in South Africa, MTN’s revenue grew by only 0.4% citing implementation of the Independent Communications Authority of South Africa’s (ICASA) end-user subscriber regulations and a reassessment of revenue recognition criteria due to delayed payments under the network roaming agreement with Cell C.

“In 2019, the 25th anniversary of MTN Group, we delivered commercial momentum across our operations as well as great progress in our strategy and strong financial results, despite challenging trading conditions,” said MTN Group’s president and CEO, Rob Shuter, who is also set to step down in March 2021 at the end of his contract.

He said MTN added 18 million customers to reach a total of 251 million and increased data users by 17 million to 95 million and fintech customers by 7 million to 35 million.

“This growth is central to our belief that everyone deserves the benefits of a modern connected life. We also saw improvements in customer experience, network quality and market share across the group,” he said.

Shutter said the company’s return on equity (ROE) increased to 14. 3% from 11.5% in December 2018, supported by the improvement in the service revenue performance and operational leverage, as well as progress made in optimising our portfolio.

To ensure Africa doesn’t miss out on the instant messaging revolution, Shutter said, the telecom company launched its own instant messaging platform, Ayoba, in March last year.

“Ayoba is now live in 12 markets and has registered two million monthly active users,” he said. “Broadening our fintech offering remains a priority, and MoMo is now live in South Africa.” In Nigeria, the company had received its super-agent licence and by last December had 108 000 registered agents.

Meanwhile, MTN Group board has thanked Shutter for the contribution he has made, and continues to make, to MTN. The board said succession process will be concluded during the year, enabling a seamless handover.

“Under his leadership significant progress has been made, including establishing and effectively communicating a clear vision and strategy, driving the resolution of a number of complex matters and delivering significant improvements in transformation, operational performance and staff morale,” the company said in a media statement.

MTN group chief technology and IT officer, Charles Molapisi, has been appointed to the group executive committee and the fixed contract of the group chief operations officer, Jens Schulte-Bockum, been extended until 31 March 2022.

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