MTN quarterly service revenue up 14%

Africa's largest mobile network operator, MTN Group, has reported a remarkable 14% surge in service revenue for the third quarter, ending in September. The growth is attributed to a significant rise in subscriber numbers across various markets. Ralph Mupita, the CEO of MTN Group, outlined the key drivers behind this impressive performance in a recent interview with CNBC Africa. Mupita highlighted the substantial growth in South Africa, despite challenging operating conditions and low trading. The company saw an addition of over 800,000 new subscribers, primarily in the prepaid segment. This growth reflects MTN's ability to attract customers seeking affordable options, especially in the face of inflationary pressures. Mupita emphasized the importance of offering competitive propositions to retain these customers and reduce churn rates. In addition to South Africa, MTN witnessed strong growth in its enterprise business, with a 3.5% increase in service revenue. The postpaid segment also exhibited promising results. The positive momentum extended beyond South Africa to MTN's subsidiaries in Ghana, Rwanda, and Nigeria. Nigeria, in particular, delivered robust performance in Q3, driven by significant data growth and investments in network infrastructure. Despite facing macroeconomic challenges, Ghana and Uganda also experienced notable revenue growth, underscoring the general uptrend in data and FinTech services across MTN's markets. As governments introduce new levies on mobile services to boost revenue, Mupita acknowledged the short-term impact on service revenue development, especially in FinTech businesses. However, he remains optimistic about the long-term growth prospects of the FinTech sector in Africa, emphasizing the importance of financial inclusion. MTN's strategic focus on FinTech is part of its Vision 2025 strategy, aiming to enhance digital services such as insurance, lending, e-commerce, and payments. The company is structurally separating its FinTech unit from the core connectivity business to drive innovation and expansion. MTN is also exploring potential minority investments in its FinTech division to accelerate growth and reach its target of 100 million users on MTN Mobile Money Service. The CEO expressed confidence in the progress of the FinTech separation process, expecting significant momentum in the coming year. Mupita addressed the failed bid to acquire Telkom, highlighting MTN's commitment to strategic partnerships and championing value creation for stakeholders. Despite the setback, MTN remains focused on its financial and capital framework, leveraging its $59 billion in cash and undrawn facilities to navigate market uncertainties and capitalize on new opportunities. Looking ahead, Mupita emphasized the importance of scale and consolidation in the telecom sector. He believes that market trends will drive inevitable consolidation among mobile network operators to sustain infrastructure investments, deliver superior network quality, and achieve sustainable growth. MTN stands firm in its position that consolidation is crucial for the industry's long-term viability and competitiveness.