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MTN sees Q3 boost, steady subscriber growth

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MTN Group has released strong results for Q3 2020, despite the impact of COVID-19 on the continent, including harsh lockdowns in key markets like South Africa.

Performance there and in other big markets like Nigeria and Ghana helped the telco giant log service revenue up by 11.4% to more than R43 billion ($2.64 billion).

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 13.9%, and the group EBITDA margin widened by 1.4% to 43.3%, in line with medium-term targets.

"As the COVID-19 pandemic has continued to impact lives and livelihoods across our markets, the group has demonstrated strong operational execution and resilience," said MTN Group President and Chief Executive Officer Ralph Mupita.

Recovery mode

To meet the increase in data and digital usage, he said the operator had focused investment on network capacity and resilience, and modernising IT systems, spending R16 billion ($982 million) in the year to the end of the third quarter.

"We recorded solid growth in voice revenue of 3.9%, which reflects an encouraging recovery supported by the easing of lockdown restrictions," said Mupita.

"Data revenue grew by 31.9%, bolstered by increased demand for work-from-home services, digital entertainment as well as online education offerings."

The group also reported growth of 21% in fintech revenue and 37.5% in digital.

MTN's mobile money (MoMo) service passed 40 million users across the continent during the quarter, reaching 41.8 million by the end of September.

"Apart from greater adoption brought on by COVID-19, more people used MoMo because of enhancements to the functionality of the MoMo app, the large increase in registered MoMo agents, as well as the integration of MoMo into our instant messaging platform Ayoba in some of our markets," said Mupita.

Outlook uncertain

MTN added 12 million subscribers, making 273 million across 21 markets, with 5.3 million active data users taking the total to 107 million.

As part of its asset realisation programme, MTN Group completed its exit from its 18% investment in e-commerce business Jumia, as well as the localisation of an 8% shareholding in MTN Zambia, realising net proceeds of approximately R2.3 billion and R204 million respectively.

"Despite the relaxation of lockdown restrictions, the operating environment remains challenging and uncertain," said Mupita.

"We will continue to build on our operational and financial resilience. We have now increased our full year forecast for capital expenditure to R26 billion, to ensure that our networks provide reliable connectivity and digital services to all of our 273 million-and-growing subscriber base."

*Top image: Far reaching fintech - MTN reached a milestone 40 million users for its mobile money (MoMo) service.
(Source: Fiona Graham / WorldRemit on Flickr CC2.0)

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