MTN Nigeria Q3 2024 Report: Data and Fintech Growth Amid Financial Challenges
MTN Nigeria’s latest quarterly report reveals a 33.6% increase in service revenue, largely driven by a significant 52.3% surge in data revenue. However, the telecom giant also faced a substantial forex-related after-tax loss of ₦514.9 billion.
Data Demand and Subscriber Losses
The rise in data revenue can be attributed to the growing demand for digital services such as streaming and social media. Data traffic saw a notable increase of over 40%, with active users consuming an average of 11.3GB per month. Despite these positive indicators, MTN experienced a decline in its overall subscriber base, reaching 77 million, due to regulatory requirements associated with National Identification Numbers (NIN) linked to SIM cards.
As efforts continue to reconnect affected users, the challenge of balancing regulatory compliance with customer retention remains a crucial aspect for MTN’s business sustainability in Nigeria.
Fintech Growth and Operational Adjustments
MTN’s fintech division recorded an 18% revenue growth, particularly driven by its mobile money service, MoMo. However, active mobile money wallets saw a decline of 21.8% to 2.8 million as MTN focuses on enhancing the quality of wallet users over sheer volume.
The company has introduced changes to its sales strategy, including a streamlined agent network, to ensure more sustainable growth in the fintech sector. Despite these efforts, challenges in scaling fintech operations under Nigeria’s economic conditions persist.
Forex Impact and Cost Inflation
The depreciation of the naira has significantly impacted MTN’s financial performance, with unrealized forex losses playing a major role in the after-tax loss. Operational expenses have risen, leading to a 5.3% decrease in EBITDA year-over-year.
Inflation, high energy costs, and new taxes on leases have further squeezed profitability, underscoring the financial pressures faced by Nigerian businesses in managing costs amidst economic volatility.
Outlook: Managing Challenges for Future Growth
Looking ahead, MTN anticipates sustained data demand and continued investments in infrastructure to support growth. However, volatile currency fluctuations and high operational costs remain ongoing challenges that could impact profitability recovery.
Efforts to renegotiate contracts and advocate for tariff increases aim to mitigate financial pressures, but profitability prospects are still constrained by Nigeria’s economic landscape. MTN’s ability to navigate forex exposure and retain subscribers in a regulatory-heavy environment will be crucial for its future success.
Source : techpoint.africa