"I am pleased with our performance in 2019, which demonstrates the progress we have made in the implementation of our BRIGHT strategy. Despite a challenging operating environment, we continued to deliver double-digit growth in service revenue in line with our medium-term guidance, said MTN Nigeria chief executive officer, Ferdi Moolman.
Voice revenue growth remained healthy, and data revenue continued to accelerate, supporting a 12.6% increase in service revenue with an acceleration in growth to 14.0% YoY in Q4 2019, he said.
Following the completion of the SIM re-registration exercise in Q3 2019, MTN recorded 2.7 million net additions in Q4. "In total, we added 6.1 million new subscribers to our network in 2019. Although the last quarter is usually seasonally strong, service revenue growth (14.0%) in Q4 outpaced the seasonal effect," the chief executive said.
Salient features:
• Mobile subscribers increased by 6.1 million to 64.3 million.
• Active data users increased by 6.5 million to 25.2 million.
• Service revenue increased by 12.6% to NGN1.2 trillion.
• EBITDA grew by 45.2% to N629.9 billion.
• Profit before tax grew by 31.1% to N290.1 billion.
• Earnings per share rose by 38.8% to N9.9k.
• Capital expenditure (capex) (excluding right of use assets) increased by 13.1% to N208.3 billion.
• Final dividend of N4.97 kobo per share recommended.
"In the third quarter, we focused on several initiatives to enhance coverage and drive data usage penetration. These initiatives include optimising frequencies, expanding our 4G network coverage with over 6,000 additional sites leveraging 800MHz spectrum and repositioning our commercial data offerings," said Moolman.
4G population coverage rose by 8.4 pp to 43.8%, giving people in 68 additional cities access to 4G, it said.
MTN Nigeria said it closed the year with 132 cities covered by 4G and became the first mobile network operator in West Africa to demonstrate the capability of 5G technology.
"We are delighted with the progress made in resolving our dispute with the Attorney General of the Federation (AGF) on the adequacy of taxes and duties paid, said Moolman.
"We have discontinued the legal action against the AGF following the transfer of the matter to the relevant authorities and look forward to a final resolution. We have always fulfilled our tax obligations and remain committed to maintaining good relationships with all regulatory authorities."
Operational review
"During the year, we focused on building our subscriber base, resulting in growth of 10.5% in net additions to a total of 64.3 million subscribers. Our active data subscribers rose by 34.9% to 25.2 million on the back of several initiatives. As a result, the ratio of active data users to total mobile subscribers increased by 7.1 pp to 39.2% in 2019 with strong potential for future growth," Moolman said.
Voice revenue growth remained at 8.4% and accounted for 72.7% of service revenue. Voice traffic meanwhile, increased by 7.6%.
"In addition, we have seen rapid acceleration in data revenue growth enabled by greater population coverage, a revamp of our data portfolio and initiatives to drive 4G device penetration."
MTN said it added 5.3 million new smartphones to its network, bringing smartphone penetration to 41.8% of the group's total base, while data traffic rose by 85.8%.
"Our interventions in the year helped to drive a 42.4% increase in data revenue for the year (63.1% YoY in Q4 2019). Data contributed 18.8% to service revenue, up 3.9 pp from 14.9% in 2018," said Moolman.
Fintech revenue growth was 23.3%, supported by increased adoption of MTN Xtratime, the group's airtime lending service. "We launched a super-agent service in August and are pleased with the initial rollout and uptake of the service. We closed the year with a network of 108,000 agents registered nation- wide," said Moolman.
The agent network served almost one million customers in the first four months of operation, he said.
Outlook
"Expanding 4G network coverage to deliver high-speed internet to more people nation-wide and data revenue growth remain in focus," said Moolman.
"We expect growth in voice revenue to remain healthy. We continue to make good progress with the expansion of our super-agent network and are confident that the expanded service offerings will position us to effectively drive broader financial inclusion as well as roll out the payment service bank seamlessly, once we receive a licence."
MTN Nigeria said it acknowledges the outbreak of Corona Virus worldwide and its potential impact on the group's supply chain. "While we monitor unfolding developments, we are exploring multiple scenarios in a bid to mitigate the impact," Moolman said.
"Over the next three years, we plan to invest about N600 billion in our network," the chief executive said. "This investment will enable us to accelerate our 4G network expansion, deepen population coverage and support the Federal Government's broadband initiative. "
