MTN Uganda, the country's leading mobile phone operator, has posted a remarkable
21.1% increase in its profit after tax for the third quarter of 2023, as the company
continues to thrive on the back of a growing customer base and burgeoning demand for
data and fintech services.
The profit after tax surged to Shs 354.4 billion for the quarter ending September 30,
2023, up from Shs 292.6 billion during the same period last year. The service revenue
recorded an impressive uptick, climbing by 15.2% to Shs 1.9 trillion. The company’s
mobile subscribers increased by 13.9% to 19 million.
This impressive performance has prompted the board to approve a second interim
dividend of Shs 6.0 per share (Shs 134.3billion), a noticeable increase from the
previous year's Shs 5.4.
MTN Uganda CEO, Sylvia Mulinge, has attributed this success to the company's solid
commercial execution and the improved macroeconomic environment.
“We continued to invest in our customers through continuous product innovation and
improved service delivery, setting up over 360 additional service points this year to
provide a best-in-class customer experience."
She said a significant reduction in inflation, down to an average of 3.3% compared to
9.0% for the same period the previous year, supported the positive results.
She said while the decrease in inflationary pressures resulted in a 50-basis points
reduction of the key lending rate to 9.5%, increased foreign direct investment driven by
the oil sector also played a role in stabilizing the local currency.
Data and Fintech Triumph:
Data revenue witnessed consistent growth, expanding by 22.0%. Improved network
quality and value-packed data offerings attracted more customers, as the number of
active data users increased by 23.0% to reach 7.5 million, with data usage per active
user rising by 20%.
MTN Uganda's investments in 4G and the introduction of 5G technology significantly
enhanced the user experience, resulting in a 51.0% growth in data traffic, with a
substantial portion carried on the 4G network.
Efforts to boost smartphone adoption yielded substantial success, with smartphone
penetration reaching 36.6%, marking a notable increase of 3.9 percentage points.
Initiatives such as the MTN Kabode flagship product and partnerships offering improved
pricing and value propositions played a pivotal role in accelerating smartphone
adoption.
Fintech revenue also demonstrated robust growth, surging by 18.1%. Basic revenues
from peer-to-peer (P2P) and money transfers exhibited substantial expansion due to
increased acceptance of mobile money. The number of fintech subscribers grew by
9.7% to reach 11.6 million, with a significant uptick in the adoption of the MoMo Pay
platform.
Digital revenue experienced extraordinary growth of 130.0%, driven by an increase in
content value-added services and enterprise digital solutions that utilize open
Application Programming Interfaces (APIs). Customers leveraged MTN's network
assets to enrich their products and services, further contributing to the company's
profitability.
Going forward
Ms Mulinge expressed optimism regarding Uganda's resilient and growing economy,
with the central bank projecting a robust economic growth rate of 5.3% for the fiscal
year 2022/2023.
"As we close the year, our focus remains on maintaining the growth momentum of our
overall portfolio with attention to our new growth segments of home broadband,
enterprise, and digital," she stated.
She continued, "For our GSM business, our rigorous customer acquisition strategy and
Customer Value Management initiatives around our voice propositions will be key to
ensuring that we finish strong. On the data front, our focus is on optimizing our 4G and
5G network with increased home and business activations and smartphone penetration
to harness the wide investment in infrastructure and spectrum opportunity."
Mulinge highlighted the company's commitment to its value-based capital allocation
strategy and ongoing efforts to augment its capital structure to ensure balance sheet
strength.
She emphasized that MTN Uganda's funding and liquidity are well-managed, supported
by cash flows and approved local currency-denominated facilities to meet financial
obligations.