MTN Nigeria has ended the first quarter of the year with double-digit growth in service revenue and earnings before interest, taxes, depreciation and amortisation (Ebitda).

During the three months ended March 31, service revenue increased by 16.7% to N328.5-billion, driven by voice and data revenue, and Ebitda grew by 15.3% to N173.5-billion.

Earnings a share increased 5.6% to N2.5-kobo, while profit before tax increased 8.9% to N76.3-billion.

“We recorded a solid performance in the first quarter, building on the growth momentum we achieved in the fourth quarter of 2019,” said MTN Nigeria CEO Ferdi Moolman.

During the quarter under review, mobile subscribers increased by 4.2-million, or 6.5%, to 68.5-million.

Voice traffic increased by 7.2% year-on-year, resulting in a healthy voice revenue growth of 7.4%.

However, since the Covid-19 lockdown and restrictions, there has been a decline in voice traffic, with a slowdown in economic activity and a reduction in people’s earning capacity.

“Although we have witnessed growth in data revenue, it does not fully offset the decline in voice revenue,” he said.

Active data users increased 6.6% to 26.8-million, while data revenue increased by 59.2% supported by growth in data traffic with a further 1.7-million active subscribers connecting to the Internet during the quarter under review.

“We continued to deepen data penetration with the further rollout of fourth-generation (4G) sites, increasing 4G population coverage to 48% in the first quarter of 2020 from 44% as at year-end 2019,” he highlighted.

MTN Nigeria also reported strong growth in its digital and fintech revenue during the first quarter of the year.

The digital business returned to growth, with revenue increasing 63.7% supported by a rich portfolio of digital products and services and improvement in customer journey experience.

During the quarter, 1.6-million new users were added, bringing the active base for digital subscriptions to 3.8-million users.

Fintech revenue growth was 36.1% during the March quarter, driven by an increase in the adoption of MTN Xtratime, an airtime lending service.

MTN Nigeria’s mobile money (MoMo) agent network expanded to 178 000 with the addition of 70 000 MoMo agents during the quarter.

“The total volume of transactions processed by agents during the quarter was over 5.6-million, about 80% of which were airtime vending,” Moolman noted.

Meanwhile, MTN’s enterprise business segment, which includes mobile and fixed connectivity, cloud and information and communications technology solutions, as well as devices, achieved revenue growth of 12.7%.

CHANGING PATTERNS

MTN Nigeria reported a shift in traffic patterns with a drop in voice traffic toward the end of March.

This was partially offset by an increase in data traffic on the network.

“Data traffic increased as customers began to adopt digital channels for most of their activities and routines including telecommuting, entertainment and social media engagements due to the lockdown,” Moolman said.

The company has deployed additional resources to upgrade the capacity of the network.

“The impact of Covid-19 on our first quarter performance was not significant, except for delayed orders,” he said.

“However, given that lockdown measures only started towards the end of the quarter, and given the uncertainty associated with the likely duration and related economic impact of the Covid-19 pandemic and its effects on our customers and unstable oil prices, as well as pressure on the rate and availability of foreign exchange, it is currently too early to reliably quantify the direct or indirect financial effects on our business going forward,” he warned.

In light of this, MTN Nigeria activated its business continuity plan and implemented extensive response measures aimed at mitigating the potential impact on the network and overall business performance.

The continuity plan covers the supply chain, management of credit and liquidity, currency risk, counterparty risk and potential revenue impacts from reduced consumer spend, besides others.

“We started the year with an upbeat view of the prospects for the business in 2020, which was substantiated by the strong performance in service revenue delivered in the first quarter,” Moolman noted.

However, the remainder of the year will be shaped by the impact of these developments, which remains highly uncertain at this time.