MTN South Africa is pumping, despite the rotten economy

MTN Group’s South African unit on Wednesday reported strong earnings and subscriber growth, with the company saying all business units performed well in the year to 31 December 2021.

Subscriber numbers jumped by three million to 35 million as “churn stabilised” and as the company reported higher gross additions.

Service revenue climbed by 6.5%, while data revenue leapt 13.1%. Earnings before interest, tax, depreciation and amortisation (Ebitda) – a measure of operational profitability – increased by 6.1%, although the Ebitda margin contracted marginally to 38.9%.

Capital expenditure rose to R10.4-billion when measured using IFRS 16 reporting standards (or R9.1-billion under IAS 17 rules), an increase over 2020’s investment.

“MTN South Africa delivered very strong overall results in 2021, on sustained commercial and operational execution across all business units. The [operating company] maintained a solid growth trajectory in all core businesses, namely the prepaid consumer business unit (CBU); the post-paid CBU; the enterprise business unit; and the wholesale business,” MTN Group said.

MTN South Africa delivered very strong overall results in 2021, on sustained commercial and operational execution across all business units

“This performance was achieved against a challenging macroeconomic and consumer backdrop and increasing unemployment rates in industries such as hospitality and tourism. MTN South Africa was also impacted by shifts in customer spending patterns as lockdown restrictions abated and the movement of people increased. This intensified competition for share of the consumer’s wallet.”

Still, the company’s 6.5% service revenue growth exceeding the medium-term target and was supported by healthy performances by the prepaid CBU (up 2.1%), the post-paid CBU (up 4.5%), enterprise (up 16.8%) and wholesale (up 21.7%).

Post-paid subscribers rose by almost half a million, to 7.4 million, while MTN added 2.4 prepaid customers, to 27.6 million.

Data consumption accelerated in 2021, with data traffic growth of 58.3% and a 12.5% increase in the number of customers actively using the Internet, MTN said.

“As at 31 December 2021, MTN South Africa had 17.7 million active data users. This drove a 12.2% increase in overall mobile data revenue. The average active prepaid data subscriber now consumes 2.3GB of data a month and the active post-paid data subscriber uses nearly 10.3GB/month,” it said.

Cell C

Wholesale revenue increased by 21.7%, supported by the national roaming deal with Cell C and “solid growth” in the mobile virtual network operator, or MVNO, portfolio.

“Revenue recognition remains on a cash basis as Cell C works towards its recapitalisation. MTN South Africa recognised R2.7-billion (up 33.9% year on year) in national roaming revenue from Cell C and a balance of R236-million remained unrecognised, as at 31 December 2021,” it said.

MTN also signed a new, multi-year national roaming agreement with Telkom, which came into effect on 1 November 2021.

At the end of 2021, there were more than 550 000 active customers from MVNO partners connected to the MTN network.

The Mobile Money base, meanwhile, has growth to 4.2 million registered users, though the monthly active users figure is only a fraction of that, at 602 000.

“The growth in uptake surpasses that achieved in previous launches, setting the foundation to pass the key inflection point of one million monthly active users within the next 12 months,” MTN said.  — © 2022 NewsCentral Media