MTN Nigeria reports double-digit subscriber growth despite SIM woes

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  • MTN Nigera grew profits by more than a fifth in 2022, despite SIM registration rules that hit more than a quarter of its subscribers.
  • The firm said mitigation efforts helped with a recovery in service revenue, while data usage still jumped by over two-thirds, amid a robust expansion of its network.
  • Fintech revenue also surged, with the firm receiving a license from Nigerian regulators to run a payment service bank in April.
  • For more financial news, go to the News24 Business front page.

MTN Nigeria, Africa's largest mobile operator's most profitable market, has reported a double-digit increase in subscribers for its 2022 year, despite being hit with SIM restrictions that affected 19 million subscribers.

Mobile subscribers increased by 10.5% to 75.6 million in the year to end-December, the company said on Wednesday, with profit for the year growing 21.1% to N361.5 billion (R13.64 billion), amid a tripling in revenue in its core fintech businesses, while data traffic jumped by two-thirds.

Core profit margins also picked despite pressure on service revenue as result of the restrictions, which prompted the mobile operator to set up almost 10 000 points across the country to help subscribers with enrolment, also offering airtime bonuses worth about R750 to those who submitted their identity numbers.

In April, Nigerian authorities ordered cellphone companies to block all phones that are not linked to ID numbers from making outgoing voice calls.

The firm said on Wednesday, its mitigation efforts led to the recovery of its base through reactivations and gross connections, broadly in line with expectations, with voice traffic maintaining a steady recovery, while data traffic demonstrated strong growth.

"Our mobile subscriber net addition was 7.2 million for the year, representing a good recovery from the impact of an increase in churn in the third quarter 2022, and demonstrating the effectiveness of our churn management initiatives and interventions to ramp up gross connections," CEO Karl Toriola said in the results.

Capital expenditure rose almost a quarter to about R19 billion, due to an acceleration in coverage expansion focusing on the 4G and 5G networks, with the group saying 79.1% of the population is now covered by 4G, up from 70.3% in the prior year. Nigeria is Africa's most populous country, and accounted for over a third of the group's core profit in 2021.

READ | Nigeria grants MTN licence for mobile money banking service

In 2022, data traffic rose by 66.6%, of which 79.5% was carried on the 4G network, with data usage per user jumping by 47.4%. In addition, the mobile operator added over 5.5 million new smartphones to its network in 2022, bringing smartphone penetration to 52.4%.

In April, the Central Bank of Nigeria approved the licence for MTN's Mobile Money (MoMo) Payment Service Bank in the country, with the firm saying that fintech revenue from its core services - including its wallet service - surged 218%, with the number of registered MoMo wallets since the launch in May growing to 13.2 million.

Mobile money is an electronic service that enables users to send and receive money, make payments and perform other transactions using their mobile phones.

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