Yesterday, MTN Group released its financial results for 2017. The numbers are looking good. The results show that MTN Uganda experienced a 10% revenue growth to UGx. 1.4 Trillion.
This is a strong turn around of events as the company previously saw a 1.9% revenue decline in 2016. Its first in 20 years.
The revenue growth is attributed to “the strong growth in data and digital revenues.” The company’s data revenue increased by 41.4% which was “underpinned by an increase in data traffic and good growth in data bundle adoption.”
Yet. all this was on the back of a 2016 revenue decline. Something that could have signalled a change in direction of focus. The 2016 report cited the “decrease in outgoing and incoming voice revenue” as the reason.
But, the company reported that active data subscribers closed the year at 1.5 million for 2017. They also experienced a digital revenue increase of 16.1%. This was supported “mainly by MFS which experienced over 21.9% growth.” In the year 2017, MFS revenue contributed 23% of total revenue. The number of active Mobile Money customers also increased by 27.6% to 5.2 million.
The company also experienced a 1.9% growth in subscribers from 10.5 Million to 10.7 Million. Due to “attractive personalised bundled products introduced at the end of 2016, improved network quality and effective distribution.” Though this was a slower increase compared to 2016’s 18.1% increase.
It is not only MTN experiencing the growth in the number of subscribers. Earlier this year, Airtel Uganda MD, VG Somasekha said the company had hit 10 Million subscribers. This means a decrease in MTN’s market share.
At the group level, MTN reported improved results after returning profitability in headline earnings. Though “macroeconomic conditions were challenging” across many markets.
For example, the group cited a “weaker naira as well as hard currency liquidity challenges” in Nigeria. Then a “technical recession” in South Africa and weakened currencies in other markets like Iran.
The group’s president and CEO Rob Shuter was quoted saying “MTN delivered a solid overall performance for the year, with progress on many fronts, despite difficult economic conditions as well as operational and regulatory challenges in certain markets. MTN Nigeria showed strong constant currency revenue growth and MTN South Africa’s postpaid business displayed encouraging improvements.”
“MTN Mobile Money and rich-media services supported growth in digital revenue, however, this slowed in the second half as we optimised our value-added services (VAS) subscription business.”
In Uganda, it seems all telecoms’ good run might come to a halt factoring in the recent moves by Uganda Communication Commission. The communications regulatory authority recently announced new regulations.
It started by issuing guidelines on where SIM Cards can and should be sold. Requiring telecoms to only sell SIM Cards at their designated service centres only.
A week later, it followed up with a rule for telecoms to “work with NIRA & UCC to implement the necessary technical requirements” in order to “comply with UCC’s new guidelines on the sale of SIM Cards”.
This meant no telecom can sell SIM Cards until the exercise is complete. This might affect the growth in the number of subscribers the way subscriber disconnection did back in 2015.