MTN Group, Africa’s leading telecommunications provider, reported a significant 18.5% drop in service revenue for the third quarter ending September 30, 2024. The group’s service revenue fell to 127.4 billion rand ($6.99 billion) from 156.3 billion rand in the same period last year.
This sharp decline was primarily attributed to the devaluation of the Nigerian naira and operational challenges arising from the ongoing conflict in Sudan, both of which severely impacted MTN’s revenue performance in key markets.
MTN, which operates in 17 countries across Africa and has a customer base of 288 million subscribers, faced substantial losses in revenue from its Nigerian operations. The company reported a staggering 48.7% revenue drop from MTN Nigeria, which is the company’s largest market on the continent.
This decline was largely driven by the devaluation of the Nigerian naira, although MTN noted that the naira’s volatility had decreased compared to previous quarters, providing a slight stabilizing effect.
In contrast, MTN’s operations in South Africa, its most significant market by revenue, showed marginal growth of 3.3%, while Uganda also posted a 5% increase, benefitting from a stronger Ugandan shilling.
The group’s overall subscriber base increased by 1.6%, but this growth was affected by regulatory challenges in Nigeria, including subscriber registration requirements, and a significant decline in Sudan.
The situation in Sudan has been dire, with millions of people displaced due to ongoing conflict, leading to a reduction in the number of active users in the country.
MTN also lowered its medium-term margin target for South Africa, citing ongoing power outages and the effect these have on network operations, which could continue to pose a risk to its profitability in the region.
However, the group remains optimistic about Nigeria’s future prospects, projecting that demand in the country will continue to grow despite the regulatory and economic hurdles it faces.
Looking ahead, MTN has estimated its capital expenditure for the full year to be between 28-33 billion rand, with a focus on expanding its presence in Nigeria and other key markets, particularly in response to growing demand despite the regulatory challenges.
The company’s commitment to investment in these markets underscores its strategy to maintain growth, particularly in the face of ongoing economic uncertainty and political instability in certain regions.
MTN’s stock price fell by 1.3% to 0727 GMT in reaction to the disappointing financial results, reflecting concerns over the company’s ability to recover from the current challenges in Nigeria and Sudan.
The company has indicated that it will continue to focus on cost control, operational efficiencies, and market expansion to weather the current economic pressures.
Overall, MTN’s financial performance in Q3 reflects the complex and challenging operating environment across Africa, but the company remains committed to expanding its service offerings, investing in network infrastructure, and navigating regulatory hurdles to secure future growth.
