MTN to over 200billion in ICT infrastructure.
Telecom giant made modest profits in 2015 but sets ambitious investment targets in 2016
MTN Uganda has released its annual report, which indicates that the telecommunications giant was also not spared by the economic challenges of 2015. Depreciation of the Shilling against the dollar by almost 25% year on year, resulted in higher US dollar expenses and with a resultant impact on net earnings. Total consolidated revenue grew by a modest 5%, rising to Shs 1.33 trillion from Shs 1.27 trillion in 2014, on the back of growth on data segment, devices and ICT services. Also, the growing entrenchment and subsequent popularity of mobile money means that the service is now contributing more than 17% of the company’s total revenue.
MTN Uganda CEO Brian Gouldie told journalists at a briefing at their offices in Kampala on March 04 that active mobile money subscribers are now 3.45 million – just 52.4% of the registered mobile money subscriber base.
Driven by the aggressive push of 3G devices coupled with the rollout of the LTE network, total data revenue saw a 17% increase and contributed a substantial 28% to the revenue from telecommunications.
The rising popularity of data, especially social media – Facebook, Twitter and Whatsapp - means that there is an average 40% subscriber penetration - an indication that at least 3.3 million MTN subscribers can access the internet on their mobile devices.
Gouldie said they would continue to invest in 2016 in the network and IT infrastructure with 200 3G sites and 100 LTE sites lined up in addition to 400 kilometers of fiber plus an additional 87 sites to be connected to fiber cable. This year’s total investment, amounting to more than Shs 238 billion, will include the construction of a new building to house their headquarters. He challenged competitor companies to invest to prove their commitment to the Ugandan market. Some of the companies major rivals include Airtel, Vodafone, Africell and Uganda Telecom.
Revenue was boosted by a 17.4% increase in data revenue that contributed 28.3% to total revenue. This was attributable to the launch of LTE services in the year, an increase in 3G and LTE devices and the continued success of MTN Mobile Money. However, voice revenue was hit by high excise duties and the One Network Area initiative currently being implemented in the EAC region. MTN Mobile Money recorded a 30.2% increase in registered subscribers to 9.5 million.
At Group level, the subscriber base increased by 4.1% to 232.5 million, despite the disconnection of a massive 10.4 million subscribers thanks to regulatory pressures over non-registration of SIM cards. In November, the Uganda Communications Commission directed MTN Uganda to disconnect 3.7 million subscribers who had not complied with guidelines stipulated in the Regulation of Interception Communications Act (RICA). Consequently, MTN’s subscriber base declined by 14% - shrinking to about 8.9 million customers. However, Gouldie said the rapid deployment of digital registration capability has seen a significant number of them being re-connected.
At Group level, mobile money customers increased by 56.3% to 34.7 million across all the 15 countries, with Uganda being the pace setter. The recent re-engineering of of the MTN Mobile Money platform to make it a more agile platform enabling converged campaigns and incentives, is reaping dividends. Consequently, mobile money revenue increased by 55.8% and it now accounts for 16.8% of Uganda’s total revenue.
Commenting on the disruptive disconnection of social media and mobile money services during the general elections, Gouldie defended his company saying MTN has substantial compliance obligations with the directives of regulators. “And when it comes to issues of national security, public order and safety, we comply as a responsible corporate citizen,” said Gouldie, adding that the directive also applied to other networks. He said they are yet to calculate the loss they incurred during the shut-down but dismissed claims by some people that they had received compensation from the government.