3 April 2019

Uganda: MTN Uganda Revenue Rises to Shs1.38trillion

Kampala, Uganda — MTN Uganda has recorded a 4.4% rise in revenue to Shs1.38 trillion for the year ending December 2018 owing to increase in customer numbers, data and fintech services.

The company's financial statements shows that its customer numbers rose from 10.7million in 2017 to 11.3million as data and fintech services recorded a 23% and 10% increase in revenues respectively, during the same period under review.

MTN currently holds a 54% market share among the country's eight telecom firms.

This comes at the time MTN is in negotiation with the Ugandan government to have its operating licence renewed. The licence expired in October 2018.

It is currently operating on an interim licence to allow for the conclusion of negotiations around the terms for the licence renewal and other issues surrounding national security.

Since January, the government has deported the firm's top four expatriates - Chief Executive Officer Wim Vanhelleputte , a Belgian national, General Manager for Mobile Finance Services Elsa Mussolini an Italian, Chief Marketing Officer, Olivier Prentout a French national, and the General Manager, Sales and Distribution, Annie Bilenge Tabura, a citizen of Rwanda - on accusations of compromising national security.

MTN Group performance

Meanwhile, MTN Group recorded an increase in revenue from Shs34.35 trillion in 2017 to Shs 34.76trilllion in 2018 driven by increase in customer base and data services. Last year, MTN Group had 233 million subscribers, up by 16million.

For that the company reported an 85% surge in headline earnings per share, the main profit measure in South Africa to Shs871.

Nevertheless, the bottom line is still not at even half the level MTN reported in 2015, the year before it agreed to pay a Shs 6.25trillion (US $1.7 billion) fine in Nigeria for missing a deadline to cut off unregistered SIM card users.

The fine was a reduction from the initial Shs 19.12 trillion (US$5.2 billion) after MTN made concessions, including a promise to list its Nigeria unit.

The flotation of MTN Nigeria, which accounts for a third of MTN's core profit, is likely to take place by the end of June, according to company executives.

The Nigerian unit has also been embroiled in other rows with Nigerian authorities.

For instance, in December last year, it agreed to pay $53 million to resolve a dispute with the Central Bank of Nigeria and is involved in a court battle with the Nigerian attorney general over $2 billion in back taxes.

However, the firm's net profit more than doubled from 4,550 million rands to 9, 578million rands.

Rob Shuter, the MTN Group CEO said the Group sees significant opportunity to grow subscribers and voice revenue in the near future as it also taps into the large mobile data opportunity.

"We will also extend our BRIGHT strategy to build MTN into a digital operator with a major focus on the fintech, digital, enterprise and wholesale business areas," he said.

MTN's BRIGHT strategy that the company unveiled in 2017 comprises seven pillars: Best customer experience; Returns and efficiency focus; IGNITE commercial performance; Growth through data and digital; Hearts and minds; and Technology excellence.

Firm to exit low growth markets

In a bid to change the company's fortunes, MTN Group said it has embarked on a Shs 3.68billion (US$1bn) divestment program in the next three years, a move that will reduce Africa's largest telco and focus on high growth markets.

The Group said it has drawn up a turnaround plan that includes shedding loss-making e-commerce assets and exiting countries where MTN has no prospect of reaching second position by market share.

On the other hand, it is also pushing the company into mobile financial services, music streaming and mobile gaming, betting on a burgeoning young tech-savvy population to offset falling prices for basic telecoms services.

MTN Group has agreed to sell its minority stake in Botswana's Mascom for Shs 1.1trillion (US$300 million) subject to regulatory approvals. Last year, it sold MTN Cyprus for Shs 1.1 trillion (260 million Euros) to reduce holdco dollar debt. At the same time, it also listed MTN Ghana on the Ghana Stock Exchange after an Initial Public Offering aimed at introducing a broad base of Ghanaian investors.

MTN said its investments in tower companies and e-commerce platforms such as pan-African online retailer Jumia would be sold over time as they were not long-term strategic assets.

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