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The MTN Group, Africa’s largest telecom operator, experienced an 18.8% decline in first-quarter service revenue, primarily due to weak performance in its Nigerian market.
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The group’s reported service revenue decreased to 42.9 billion rand ($2.34 billion) for the quarter ending March 31, down from 52.8 billion rand in the same period last year. However, in constant currency terms, service revenue, which excludes device and SIM card sales, increased by 11.1%.
MTN Group counting losses from plummeting revenue in Nigerian
MTN’s service revenue from South Africa surpassed that of Nigeria, growing by 3% to 10.4 billion rand, while Nigerian service revenue plummeted by 52.8% to 10.2 billion rand.
Ralph Mupita, MTN Group President and CEO, attributed the challenging first quarter to high inflation and local currency devaluations in key markets. He also pointed to global geopolitical tensions, including the civil war in Sudan, which severely affected network availability and revenue generation in that region. Additionally, subsea cable cuts resulted in network downtime, further impacting performance.
The group’s overall reported earnings before interest, tax, depreciation, and amortization (EBITDA) dropped by 28.7% to 17.2 billion rand, though it rose by 3.9% in constant currency. The reported EBITDA margin declined by 5.8 percentage points to 37.9%, mainly due to rising costs and currency depreciation in Nigeria.
Due to these challenges, MTN has revised its anticipated capital expenditure (excluding leases) for 2024, lowering the target to 28-33 billion rand from the previous 35-39 billion rand, largely due to reduced spending expectations in Nigeria.
