MTN Nigeria, the country’s biggest mobile phone service provider, recorded a double-digit surge in data revenue in the first quarter of 2020, the onset of the COVID-19 pandemic that saw businesses adopt remote working and individuals stay at home in key states.
Data revenue which makes up 22.6 percent of service revenue (N328.5bn) grew 59.2 percent year-on-year in the quarter and 12.3 percent from Q4 2019. The growth in data traffic (+130.4 percent y/y) was supported by the addition of 1.7 million active data users and increased 4G population coverage in the period.
Some 4.2 million new subscribers were added to MTN network of now 68.5 million users, driving voice revenue up by 7.4 percent.
Ferdi Moolman, MTN Nigeria’s CEO, said the telco’s performance was despite several developments in the quarter including the increase in VAT from 5 percent to 7.5 percent which adversely affected both revenue and costs.
Moolman also noted increase in cost arising from exchange rate adjustment and significant operational challenges and supply chain disruptions due to the lockdown.
While MTN Nigeria noted a rise in different categories of expenses, digital revenue rose 63.7 percent and Fintech revenue, from services like Mobile Money (MoMo), jumped 36.1 percent with the MoMo agent network expanding by 70,000 agents to a total of 178,000-agents strength nationwide in the quarter.
Fintech revenue was up 36.1 percent year-on-year due to increased adoption of MTN Xtratime, an airtime lending service.
MoMo agents processed over 5.6 million transactions (volume) of which 80 percent were airtime vending. Notably, transaction fees for all money transfers using MoMo agent network were suspended for an initial one-month period from March 23 as part of the Y’ello Hope Package.
EBITDA grew 15.3 percent to N173.5bn with EBITDA margin moderating by 0.6 percent points to 52.7 percent.
Profit before tax rose 8.9 percent to N76.3 billion and profit for the period increased by 5.6 percent to N51.146bn.
Nigeria recorded its first case of COVID-19 in late February and put key states – Lagos, Ogun, and Abuja – under lockdown after a month.
However, commercial activities had begun to slow in March as businesses adopted remote working and individuals stayed at home.
MTN said it is moderating its near-term outlook due to highly uncertain external factors and given the impact of the virus on the exchange rate and oil price.
The telco said post-lockdown in late March, voice traffic declined due to a slowdown in economic activities and decline in workers’ earning capacity, but noted that data services usage has surged.
In response to the fallout from the novel coronavirus outbreak, MTN Nigeria said it has put in place measures to minimise the temporary disruption in the supply chain on operational capacity and has deployed additional resources to upgrade the capacity of its network and expand population coverage.
MTN Nigeria said it is currently diversifying funding strategies, has strong free cash flow and has approved loan facility headroom to meet financial obligations.
MTN contributed a billion naira as part of a private sector-led coalition, CACOVID, to assist the FG in curbing the pandemic while it rolled out other initiatives targeted at individuals and customers.
Shares of the telco gained 2.38 percent to N107.4 per share on Wednesday.
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