MTN Group Limited
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MTN SA delivered a resilient performance in a challenging 2023, with an attestable quarterly recovery in key indicators, demonstrating the benefits of its investment in network resilience.
South Africa's economy grew by just 0.1% in Q4, bringing the full-year growth to 0.6%. Inflation averaged 6.0% in the year (2022: 6.8%), although the trend moderated in H2, recording 5.1% in December 2023 (December 2022: 7.2%). The US dollar appreciated by an average of 12.5% against the rand, which impacted the cost of imports and also fed into inflation. 2023 experienced more intense power outages, with a total of 335 loadshedding days compared to 205 in 2022.
Against this backdrop, MTN SA continued to invest in the resilience of its network, strengthening its operations and supporting resilient quarterly progression in service revenue growth in key verticals, driven by its customer-centric commercial strategy execution.
During the year, MTN SA invested R10.1 billion of capex (ex-leases), including its resilience plan to improve network availability in the context of increased loadshedding. By December 2023, MTN SA's network availability had improved significantly and ahead of schedule, to approximately 95%. This translated into an improvement in customer satisfaction, with the NPS on network recording a notable increase. Our efforts have narrowed the gap to the competition, propelling us to gain network leadership in key regions such as Gauteng, Eastern Cape and KwaZulu‑Natal.
The improved network availability promoted and enhanced customer experience, enabling MTN SA to drive its commercial strategy to support revenue growth.
This was underpinned by a 2.4% increase in subscribers to 37.4 million, with net additions of 893k for the year. The number of postpaid subscribers grew by 4.4% for the year, reaching 4.1 million (excluding telemetry). Prepaid customers increased by 0.3% to 28.3 million.
Data remained the primary driver of growth, accounting for 47.8% of MTN SA's service revenue and growing by 7.4% for the year. This was driven by an 8.0% increase in active data subscribers to 20.4 million, as well as a 27.7% growth in network traffic.
An active prepaid data subscriber now consumes an average of 3.0GB of data a month (up 15.0% YoY); an active postpaid data subscriber uses an average 16.5GB (up 29.6% YoY).
Consumer postpaid service revenue grew by 2.8% for the year, supported by the sustained uplift in data consumption and price-up initiatives. MTN SA delivered steady growth in the residential business, introducing new home propositions (including MTN Fibre) while expanding and diversifying the sales channel. This sustained the customer base and revenue growth.
Consumer prepaid service revenue decreased by 2.8%. In Q4, the softer decline of 1.8% showed a pleasing improvement in trend versus the 2.0%, 2.3% and 5.0% declines recorded in Q3, Q2 and Q1, respectively. Focusing on customer experience excellence, we have made significant progress in product rationalisation and improvements in customer journeys.
Outgoing voice revenue declined by 12.1% for the year (11.9% decline including incoming voice revenue). However, the trajectory over the year was encouraging, with the Q4 decline of 9.9% showing a notable improvement compared to the declines of 10.7%, 11.7% and 16.0% in Q3, Q2 and Q1, respectively.
In addition to the quarterly improvement in network availability, this improvement in voice performance was also enabled by an acceleration in Xtratime penetration, which reached 36% in Q4, up from 26% in Q3, 25% in Q2 and 24% in Q1.
CVM initiatives continued to gain traction with personalised bundle offerings now available on 12 platforms. CVM bundle penetration progressed steadily through 2023, rising to 29% in Q4 2023 (Q4 2022: 22%).
The enterprise business continued to achieve double-digit service revenue growth, with 15.9% for the year. This was driven by the ICT business, while the digital mobile advertising and core mobile businesses continued to benefit from strong data product propositions as well as distribution channel expansion.
The wholesale business sustained double-digit revenue growth, with an increase of 13.4% (including incoming voice revenue) for the year building on a strong base. Excluding incoming voice, wholesale revenue increased by 20.9%. MTN SA's national roaming revenue rose by 26.1%, driven by Cell C revenues as well as the steady scaling of the multi-year national roaming agreement with Telkom.
The fintech business grew service revenue by 14.7%. We expanded our platform capabilities significantly in H1 including small to medium enterprise financial solutions and launched MoMo 2.0 in Q3. We also focused on driving advanced services, encompassing international remittances, Point of Sale and funeral cover to name a few.
MTN SA's EBITDA declined by 5.8%, including the once-off gain from the disposal of SA towers; excluding this effect, EBITDA declined by 4.4% YoY. The EBITDA margin of 36.1% was 3.1pp lower YoY (down 2.6pp to 35.9%, excluding the gain on disposal of SA towers). The result was also impacted by voluntary severance package provisions of R162 million, which when further adjusted for, FY 2023 EBITDA would have decreased by 3.6% and margin would have been 2.2pp lower to 36.3% (i.e. excluding both gain from disposal of SA towers and impact of VSP provision).
EBITDA was impacted by top-line pressures, as well as higher power and other network-resilience-related costs. We continued with our cost optimisation drive to safeguard profitability and cash flows, underpinned by the EEP. This enabled us to absorb some of the macroeconomic shocks experienced during the year.
MTN SA deployed capex of R10.1 billion (ex-leases), at an intensity of 19.5%, which enabled the investment in network resilience and capacity. Including IFRS 16 leases, capex was R15.7 billion. During the year, MTN SA delivered R5.4 billion in cash release initiatives, which helped mitigate the pressure on cash flows.
MTN Nigeria delivered a resilient set of annual results in a challenging environment and impacted by significant devaluation of the local currency. In this context, the operating performance remained solid with good underlying commercial momentum.
Service revenue was up 22.1%* in line with medium-term growth guidance, with a growth acceleration in Q4 to 25.0%*. The main driver of growth was data revenue, with voice growth remaining solid.
Voice revenue increased by 10.2%*, benefiting from the expansion of the mobile subscriber base and higher usage resulting from CVM activities and redesigned voice offerings.
Data revenue rose by 38.6%* (up 48.7%* in Q4) driven by revamped data bundle offerings and considerable investments. This underpinned a 28.5% increase in data usage to 8.2GB and 44.9% growth in traffic on the network. As at December 2023, MTN Nigeria's 4G network covered 81.5% of the population (2022: 79.1%) and 5G covered 11.3%. Smartphone penetration increased to 55.6%, up 4.1pp YoY.
Fintech revenue increased by 3.7%*, largely attributable to Xtratime. MTN Nigeria added 3.3 million active wallets to close the year at 5.3 million, despite the challenges experienced due to NIN requirements for KYC introduced in Q4. MoMo PSB revenue growth of 8.1%*, with an expansion in the ecosystem where active agents and merchants grew to over 326k (up 46.0% YoY) and 324k, respectively. Transaction volume grew by 49.2% YoY, underpinned by the key ecosystem metrics, which all accelerated in Q4.
The digital business, which recorded revenue growth of 65.6%*, gained traction through the optimisation of its services. This underpinned the increase in the number of active users of digital services, with rich media subscriptions – excluding ayoba – growing by 57.2% to reach about 8 million. Ayoba saw a 65.6% increase in monthly active users to reach 8.6 million by year-end.
Revenue from the enterprise business rose by 45.3%*, on increased uptake of communication and ICT services by enterprises and public sector institutions. Mobile and fixed connection services were the main revenue drivers, fuelled by onboarding of new customers, enhanced offers and growing usage.
The combined effects of naira devaluation and the once-off provision for the Federal Inland Revenue Service (FIRS) VAT assessment resulted in opex growth of 39.8%. Excluding these effects, opex increased by 24.5%*.
MTN Nigeria recorded EBITDA growth of 14.2%*, while the EBITDA margin declined by 3.6pp* to 49.7%*. The result was impacted by naira devaluation, higher general inflation and energy costs, and the introduction of the 2023 Finance Act VAT on tower leases. Adjusting for the effects of naira devaluation (2.8pp*) and the provision for FIRS VAT assessment (0.9pp*) in particular, the EBITDA margin for FY 2023 would have been 53.4%* (Q4 2023: 53.8%*).
Overall, MTN Nigeria recorded a loss after tax of R2.4 billion. Adjusting for net forex losses, PAT would have been R11.6 billion (down by 3.4%). Further adjusting for the impact of naira devaluation in opex and the once-off provision for the FIRS VAT assessment, PAT would have been up by 12.0% to R13.5 billion. MTN Nigeria generated strong adjusted free cash flow of R20.1 billion, up 22.0%.
The SEA region delivered service revenue growth of 17.4%*, YoY, supported by strong growth in data (up 24.3%*), fintech (up 21.4%*) and voice revenue (up 11.4%*) as well as an increase in subscriber numbers by 7.5% YoY to 39.2 million. The annual blended inflation in SEA averaged 10.0%, compared to 14.3% in 2022.
MTN Uganda reported service revenue growth of 16.1%* YoY, underpinned by continued momentum in voice (up 11.6%*) and solid performances from data (up 21.6%*) and fintech (up 17.6%*). The subscriber base grew by 13.3% to 19.5 million. The performance was boosted by the customisation of customer packages through improved CVM offers as well as a revised approach to our regional distribution network, which drove higher traffic.
Data revenue was supported by YoY increases of 22.5% and 49.6% in active data users and data traffic, respectively. The increase in data consumption came on the back of improvements in network speeds following the additional spectrum deployment in the 700MHz, 2300MHz and 2600MHz bands allowing for a better user experience.
Fintech active users were up 10.5% to 12.1 million, which drove transaction volume growth of 30.8% to 3.4 billion. MTN Uganda's ecosystem development was also pleasing, where the active agent and merchant networks expanded by 10.0% (to 170k) and 68.7% (to 292k), respectively.
MTN Uganda's EBITDA increased by 16.2%*. The EBITDA margin held steady at 51.3%*, underpinned by solid top-line growth and focused operational efficiency.
MTN Rwanda reported 6.5% YoY growth in the subscriber base to 7.3 million despite a slowdown in economic growth, elevated inflation and regulatory hurdles. Service revenue grew by 11.3%*, owing to top-line growth in data (up 21.5%*), fintech (up 30.3%*) and enterprise (up 15.1%*).
Data revenue sustained its strong growth momentum, driven by a 14.3% increase in active data users and a 20.8% YoY increase in data traffic – this was boosted by the launch of MTN Rwanda's own 4G network during the year. Commercially, the business drove user engagement and usage through introduction of our affordable, competitive and customised data packages.
Fintech revenue maintained solid YoY development underpinned by a 13.9% expansion of the active user base and 30.3% growth in transaction volumes to 1.9 billion. MTN Rwanda's advanced service revenue rose by 69.5%, supported by continued broadening of its agent and merchant bases (up 8.6% and 138.8%, respectively).
MTN Rwanda reported EBITDA growth of 3.6%* and an EBITDA margin of 46.3%* (down 3.5pp YoY). EBITDA was impacted by a zero-mobile termination rate (MTR) directive from the regulator in Q4, which affected interconnect revenue. There was some mitigation from the launch of MTN Rwanda's own 4G network in July 2023, which reduced data cost of sales and enabled more efficient network expansion.
Overall, the SEA portfolio reported a 0.5pp* decline in the blended EBITDA margin to 46.0%*.
The WECA region delivered service revenue growth of 13.5%* largely driven by data (up 24.7%) and fintech (up 28.6%). Active data subscribers increased by 11.5% to 35.7 million and active MoMo users increased by 7.4% to 35.1 million. The average blended inflation for the region was 17.4% in 2023, compared to 14.1% in 2022. Excluding Ghana, the WECA region's service revenue growth was 4.1% compared to blended inflation of 5.0%.
MTN Ghana continued to be a meaningful contributor to the Group's performance. Against a macro-environment that remained challenging – with inflation averaging 40.3% in the year, and the cedi depreciating by 34.5% against the US dollar in 2023 – this outcome was achieved through well-executed commercial strategies, pricing initiatives and focused investment in the network.
Service revenue grew by 35.0%* supported by a solid voice performance, and strong growth in data and fintech notwithstanding the impacts of a regulatory directive to block non-compliant SIMs from the network.
Voice revenue increased by 9.0%*, supported by optimised and customer-centric CVM initiatives, pricing initiatives and improved network coverage. The contribution of voice to total service revenue declined from 33.1% to 26.8%, as customer behaviour continued to evolve in line with global trends.
Data revenue rose by 51.3%*, a robust data performance driven by a 14.0% YoY increase in active data subscribers as well as data pricing initiatives and well-positioned offers in the market. Data demand continued to grow as megabytes (MB) consumed per active user per month grew by 19.3% and data traffic increased by 36.1%. The growth in demand was supported by various commercial interventions coupled with investments in network infrastructure to offer high‑speed data services to homes and mobile subscribers.
The fintech business reported revenue growth of 46.4%* with pleasing growth in active users (up 20.1%). The outcome was further supported by partnerships with various financial institutions, agents and merchants, which enabled continued expansion of the fintech ecosystem and strong growth in advanced services, whose contribution to fintech revenue grew to 24.8% from 21.8% in 2022.
Digital revenue decreased by 4.5%* YoY, however, due to ongoing efforts to enhance customer experience, as well as to rationalise the digital product portfolio, H2 growth accelerated to 18.2%. The number of active digital subscribers increased by 28.6% YoY, reaching a total of 4.6 million. Our primary focus is on improving the myMTN application and expanding the music and game offerings on ayoba.
EBITDA increased by 39.6%* YoY, with the margin increasing by 1.9pp to 58.4%*, due to the top-line growth and ongoing efficiencies. There was a benefit to the EBITDA performance from reversing provisions relating to the TMTA agreement, which was only renewed in December 2023. Adjusting for this, would result in an EBITDA margin of 56.1%*.
MTN Côte d'Ivoire has had a tough year with a stable service revenue outcome (up marginally by 0.1%* YoY). The regulatory environment remained challenging, exacerbated by increased price-based competition in the market.
The result was negatively affected by a decline in voice revenue (down 6.1%*) in the market driven by the removal of the pricing framework by the regulator in April 2023, which led to price dilution. Data revenue growth also slowed (up 10.1%*) due to longer lead times in network rollout arising from tower lease contract renewals and equipment logistics bottlenecks.
Fintech revenue increased by 0.8%*, impacted by lower monthly active users (MAU) (down 29.3% to 4.8 million). This was due to interventions to clean up the user base. More encouragingly, development of the overall ecosystem remained steady with transaction volumes up by 18.0% to 1.1 billion.
More broadly, price repair initiatives in the sector are key focus in Côte d'Ivoire, with engagements underway with relevant authorities in the country. These discussions, along with aggressive commercial interventions, are anticipated to drive a steady recovery of the business over time.
MTN Côte d'Ivoire's EBITDA margin declined slightly by 0.2pp* to 32.9%*, reflecting the macroeconomic and competitive pressures on the business. The impacts were mitigated by expense efficiencies realised in the year.
MTN Cameroon reported solid service revenue growth of 10.9%* and maintained leading market share in a challenging and highly competitive environment. CVM initiatives continued to drive solid growth in data (up 20.1%*) and fintech (up 25.4%*) revenue, despite increased pricing competition in the market. The EBITDA margin for MTN Cameroon improved by 2.2pp* to 37.8%*, driven by strong top-line growth and expense efficiencies.
WECA reported a 22.8%* increase in EBITDA and a blended EBITDA margin of 40.8%*, up by 3.0pp*. Excluding MTN Ghana, the WECA markets reported a 1.3pp* increase in the blended EBITDA margin to 30.8%*.
The difficult trading conditions in the MENA region affected service revenue, which fell by 8.7%* YoY. Excluding MTN Irancell, the overall subscriber base fell by 23.3% to 11.6 million and the number of active data users fell by 30.2% to 3.6 million.
MTN Sudan's service revenue decreased by 12.3%* YoY. The situation in the country remained volatile in 2023 given the ongoing conflict in the country and high inflation. As a result, EBITDA margin declined by 21.7pp* to 30.6%*. These effects were mitigated by revenue recovery initiatives, which were supported by expense efficiency measures as well as the restoration of the network where it was safe to do so.
MENA reported a blended EBITDA margin of 29.5%*, down by 12.2pp*, mainly affected by the conflict in Sudan.
MTN Irancell, our equity-accounted JV, delivered service revenue growth of 34.5%*, supported by increased data usage. Solid data revenue of 15.9%* was supported by a 9.8% increase in usage, higher effective pricing and a 6.1% increase in active data subscribers. The EBITDA margin declined by 0.5pp* to 41.1%* due to opex pressures as a result of currency depreciation.
The Iran Internet Group continued its strong performance in the 12 months to December 2023. Ride‑hailing app, Snapp remained the market leader, ranking among the top ride‑hailing apps globally and reaching 4.7 million daily rides compared to 3.7 million rides in 2022. Last-mile delivery service, Snappbox also remained the market leader with revenue up 97% YoY and daily orders increasing by 28% YoY to almost 390k. Food delivery app, Snappfood grew revenue by 94% YoY and remained the largest player in the country.
