MTN increased its subscribers by 12-million in the quarter ended 30 September 2020, to reach a total of 273,4-million.
Active data subscribers increased by 5,3-million to 107,2-million, which active MTN Mobile Money (MoMo) customers increased by 3,5-million to 41,8-million.
Group service revenue increased by 11,4%, and group earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved to 43,3% (from 41,9%).
MTN South Africa service revenue increased by 2,1%, with an EBITDA margin of 39,3% (from 36,6%), while MTN Nigeria service revenue increased by 13,8%, with an EBITDA margin of 51,0% (from 53,7%).
Group president and CEO Ralph Mupita comments: “As the Covid-19 pandemic has continued to impact lives and livelihoods across our markets, the group has demonstrated strong operational execution and resilience during the period under review. Although trading conditions remain challenging, we delivered a solid performance in Q3 2020 during which the positive momentum achieved in key traffic and revenue trends towards the end of H1 2020 was sustained.
“We continued to drive good growth in our subscriber base, enabled by strong commercial execution across our markets. In the quarter we added 12-million subscribers and 5,3-million active data users. We reached a significant milestone in our goal to enable greater financial inclusion by surpassing the 40-million MoMo subscribers mark, an addition of 3,5-million in the quarter.
“In Nigeria, we added over 90 000 agents to end Q3 at 311 770 registered agents for our fintech business.
“Apart from greater adoption brought on by Covid-19, more people used MoMo because of enhancements to the functionality of the MoMo app, the large increase in registered MoMo agents, as well as the integration of MoMo into our instant messaging platform Ayoba in some of our markets.”
He adds that the group results were supported by the strong performance of our larger operations. “MTN South Africa sustained its turnaround, with an acceleration in its core consumer and enterprise business units in Q3.
“MTN Nigeria recorded a solid result with some recovery in revenue growth under difficult operating conditions, and MTN Ghana’s continued strong operational execution drove the delivery of another good performance.
“We recorded solid growth in voice revenue of 3,9%, which reflects an encouraging recovery supported by the easing of lockdown restrictions and the gradual reopening of the economies in our markets.”
Mupita adds that data revenue grew by 31,9%, bolstered by increased demand for work from home services, digital entertainment as well as online education offerings. We also delivered pleasing growth in fintech and digital revenue of 21,0% and 37,5% respectively, driven by increased adoption and usage of our digital channels and offerings.
“As we continue to navigate the impacts of the pandemic, we remain focused on our people, customers, networks and efficiency, supporting our broad range of stakeholders through our Y’ello Hope and other initiatives. While managing the risks, we are also alive to the opportunities presented by Covid-19, particularly the accelerated need for digitalisation evidenced in the adoption and usage of our services.”
The group has completed the exit from its 18,9% investment in Jumia as well as the localisation of an 8% shareholding in MTN Zambia, realising net proceeds of approximately R2,3-billion and R204-million respectively.
“Looking ahead, we remain committed to providing leading network service; building and scaling our digital and fintech businesses; securing greater efficiency through cost discipline; and executing on our pan-African strategy and asset realisation programme,” Mupita says.
MTN SA delivered an encouraging performance, with strong commercial execution sustaining the growth of consumer prepaid, consumer postpaid and enterprise business units. Service revenue grew by 2,1% with an improved performance in Q3, when it increased by 11,8% YoY.
Service revenue growth was supported by the strong performance in the consumer prepaid business, continued growth of the enterprise business and the resilience of the consumer postpaid business. All three business units continue to benefit from the growth in data usage driving the increase in data revenue by 16,0% YoY in the nine months to September 2020.
MTN SA’s results were negatively impacted by the discontinuation of its roaming agreement with Telkom which concluded in June 2019 and the effect of accounting for Cell C roaming revenue on a cash basis. Excluding the impact of national roaming, MTN SA would have recorded service revenue growth of 3,4% in the first nine months of the year and 5,7% YoY in Q3.
Total South African subscribers increased by 1,9-million in the quarter, to 30,9-million. The majority of additions were prepaid customers, reaching a total of 24,3-million and marking the largest quarterly increase in nearly 18 months. Postpaid subscriber numbers remained broadly flat at 6,6-million, primarily as a result of churn on short-term Covid-19 related deals. Excluding the net impact of these deals, the postpaid subscriber base increased 168 100 for the quarter.
Strong data traffic growth of 80,6% coupled with a 0,5 million increase in active data users to 14,7-million supported a solid 16,0% increase in overall mobile data revenue. “In line with the commitment to improving the affordability of data for its customers, MTN SA has reduced its effective data tariff by approximately 34,7% since September 2019,” Mupita says.
“The execution of MTN SA’s prepaid strategy resulted in a solid performance in the consumer prepaid business, which remained on an improving trajectory with service revenue up 3,1%, benefiting from a strong third quarter when service revenue increased by 5,7% YoY. The business benefited from increased data usage and customer additions as well as an increased uptake in data packages as it focuses on affordability and customer value management (CVM) initiatives.”
The consumer postpaid business recorded a 3,1% growth in service revenue.
The enterprise business continued recording growth for the fourth consecutive quarter. Service revenue was up 17,2%, boosted by customised data deals for universities to facilitate learn from home initiatives as well as the uptake of ‘work from home’ solutions. As these deals were on a short-term basis, there was a slowdown in the quarter reflecting the university churn, however the focus remains on base retention as well as on adding new corporate customers.
“Wholesale revenue declined by 14,4%, impacted by the lost national roaming revenue from the discontinuation of the agreement with Telkom and the effect of continuing to account for Cell C revenue on a cash basis,” Mupita says.
MTN SA recognised approximately R1,3-billion in national roaming revenue in the nine months to 30 September 2020, while R698-million of Cell C revenue remained unrecognised as at September 2020. The implementation continues of Phase 2 of the Cell C roaming agreement, which commenced on 1 May 2020.
MTN SA produced an EBITDA margin of 39,3%, expanding by 2,7pp, aided by the reductions in device volumes and subsidies, execution of the cost efficiency programme as well as channel optimisation.
“Since launching MoMo in South Africa in January 2020, this service continues to scale, with approximately 2-million registered users at 30 September 2020,” says Mupita. “The focus remains on growing the platform through innovative and relevant service offerings.”