MTN revenue and subscribers jump despite tough year

MTN’s latest annual results have revealed its service revenue in South Africa was around 2.5% higher in 2023 than in 2022, while customers increased by about 2.4%.

MTN South Africa’s service revenue increased from about R40.85 billion in 2022 to R41.88 billion in 2023, while its South African subscriber base jumped by roughly 893,000 to reach 37.4 million in the year.

“The number of postpaid subscribers grew by 4.4% for the year, reaching 4.1 million,” MTN said. “Prepaid customers increased by 0.3% to 28.3 million.”

Most of the service revenue growth was attributed to increased data revenue, which grew by 7.4%. Data contributed 47.8% of MTN’s service revenue.

“This was driven by an 8.0% increase in active data subscribers to 20.4 million, as well as a 27.7% growth in network traffic,” MTN said.

“An active prepaid data subscriber now consumes an average of 3.0GB of data a month, up 15.0% year-on-year,” MTN said,

“An active postpaid data subscriber uses an average of 16.5GB, up 29.6% year-on-year.”

MTN South Africa’s enterprise, wholesale, and fintech revenue also jumped by 15.9%, 13.4%, and 14.7%, respectively.

With regards to wholesale revenue, MTN specifically pointed to a 26.1% increase in national roaming revenue thanks to its agreement with Cell C, for which MTN manages all network infrastructure, and the steady scaling of a multi-year national roaming agreement with Telkom.

These gains helped offset outgoing voice revenue dropping by 12.1%.

MTN described its South African performance as “resilient” in light of high import costs due to the weakening rand and inflation impacting customers’ spending.

While intensified load-shedding increased its capital expenditure, this also helped improve network availability and helped grow its customer base.

“During the year, MTN South Africa invested R10.1 billion of capex (ex-leases), including its resilience plan to improve network availability in the context of increased load-shedding,” MTN said.

“By December 2023, MTN SA’s network availability had improved significantly and ahead of schedule, to approximately 95%.”

“This translated to an improvement in customer satisfaction, with the Net Promoter Score (NPS) on the network recording a notable increase.”

“The improved network availability promoted and enhanced customer experience, enabling MTN SA to drive its commercial strategy to support revenue growth.”

Capital expenditure was around 19.5% of South African revenue, a very high capital intensity figure.

EBITDA declines

This was among the topline pressures that MTN blamed for a drop in its EBITDA in South Africa.

MTN South Africa’s earnings before interest, tax, depreciation, and amortisation (EBITDA) declined by 5.8% when excluding gains from the sale of some of its towers.

The EBITDA margin also dropped by 3.1 percentage points to 36.1%.

MTN said it continued with its cost optimisation drive to safeguard profitability and cash flows, underpinned by its expense efficiency programme.

“This enabled us to absorb some of the macroeconomic shocks experienced during the year,” the operator said.

The MTN Group — which includes its operations across other African countries — increased its service revenue by 6.9% from R196.49 billion to R210.14 billion.

MTN SA’s performance and growth in smaller markets helped to cushion the blow of a 4.1% service revenue decline in Nigeria, MTN’s biggest market by revenue and customers.