Telecommunications group MTN reported strong first quarter operational and financial results with data and fintech revenue driving service revenue beyond the company’s medium-term guidance.

The group’s service revenue increased 17.8% to R42.3-billion during the three months to March.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 21.3% and the Ebitda margin widened to 44.2% from 42.7%.

“The overall group results were supported by double-digit service revenue growth from our large operations and continued focus on our expense efficiency programme. We are encouraged in particular by the strong performance of MTN South Africa (MTN SA), as well as accelerating data and fintech services across the group in the period,” said MTN Group president and CEO Ralph Mupita.

MTN SA reported strong performances across the consumer, enterprise and wholesale businesses, as market share gains, a subscriber base of 32.1-million, an 11.8% increase in service revenue and good cost containment drove a 3.2 percentage point expansion of its Ebitda margin to 39.8%.

MTN Nigeria and MTN Ghana also continued to build on their solid operational execution and commercial momentum.

Overall group data revenue grew by almost a third amid sustained demand for work-from-home services, digital entertainment and online education offerings.

Group data traffic was about 67% higher year-on-year, with large increases of 76.3% in MTN SA, 86.7% in MTN Nigeria and 64% in MTN Ghana.

Voice traffic, which experienced the most pressure early on in the Covid-19 pandemic, continued its healthy recovery, increasing 11.6%, supported by growth of 8.7% in MTN Nigeria and 16.5% in MTN Ghana. MTN SA’s voice traffic decreased 3%.

Meanwhile, the group’s mobile money (MoMo) active monthly users increased 32.9%, while the average volume of transactions processed through the company’s fintech platform was up 46.7% to 16 567 a minute and the value of transactions increased by 86.6% to $53.2-billion.

“As we establish our payment platform, the number of active merchants accepting MoMo payments doubled year-on-year to 521 000, while the total value of MoMo merchant payments rose by about 299.2% to $4.8-billion.”

“We are pleased with the momentum in driving our platform strategy and the fintech separation project is progressing well, in line with our Ambition 2025 strategy,” said Mupita.

MTN Rwanda recently received a licence to operate a separate fintech entity, bringing the number of structurally separated entities to 12 out of 16 fintech markets.

“We continue to progress our work in establishing the topco structure for fintech and anticipate that this will be concluded before the first quarter of 2022,” he continued.

MTN Group, however, recorded a 1.7-million decrease in subscriber numbers to 277.9-million, as MTN Nigeria reported a decline in subscribers owing to restrictions on all new Sim sales and activations in that market under revised registration regulations in Nigeria.

Overall subscribers in the Nigerian market declined by 12-million in the first quarter under review.

On April 19, the suspension on issuing new Sims and various other activities were lifted subject to adherence with the regulator’s stipulated guidelines.

The group’s active data subscribers declined by 1.3-million to 115.6-million, while the number of MoMo customers increased by 200 000 to 46.6-million during the first quarter.

Excluding the impacts of MTN Nigeria, MTN Group total subscribers and active data subscribers increased by 3.4-million and 1.3-million respectively.

“Looking ahead, we are focused on executing our Ambition 2025 strategy, driving growth, de-leveraging the Holdco balance sheet and unlocking value, while navigating the impacts of the pandemic,” concluded Mupita.

The group remains focused on expanding its network coverage and ensuring its resilience.

As at March 31, MTN had deployed 940 third-generation and 2 626 fourth-generation sites.