MTN Group reports resilient first quarter 2021 results as data and fintech services accelerate

MTN Group today announced a strong and resilient operational and financial performance in the first quarter of 2021, with growth in service revenue exceeding medium-term guidance, driven by gains in data and fintech revenue.

“The MTN Group has delivered a solid Q1 2021 trading performance, with service revenue and EBITDA margins expanding on the back of continued commercial momentum and resilient networks,” said MTN Group President and Chief Executive Officer Ralph Mupita, adding that the Group’s Ambition 2025 strategy had gained execution traction during challenging COVID-19 macroeconomic conditions in the quarter.

In constant currency terms, service revenue grew by 17.8% to R42.3 billion at end-March 2021, earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 21.3% and the EBITDA margin widened to 44.2% from 42.7%.

“The overall Group results were supported by double-digit service revenue growth from our large operations and continued focus on our expense efficiency programme. We are encouraged in particular by the strong performance of MTN South Africa, as well as accelerating data and fintech services across the group in the period,” he said.

MTN South Africa (MTN SA) recorded strong performances across the consumer, enterprise and wholesale businesses. Underpinned by market share gains and a subscriber base of 32.1 million, an 11.8% increase in service revenue and good cost containment drove a 3.2 percentage point expansion in MTN SA’s EBITDA margin to 39.8%. MTN Nigeria and MTN Ghana – both of which reported Q1 results in the past week – continued to build on their solid operational execution and commercial momentum.

Group data revenue grew by almost a third amid sustained demand for work-from-home services, digital entertainment as well as online education offerings. Fintech revenue also accelerated, expanding by more than 31% as the value of fintech transactions increased by 87% to US$53 billion.

“We are pleased with the momentum in driving our platform strategy and the fintech separation project is progressing well, in line with our Ambition 2025 strategy,” said Mupita. “MTN Rwanda recently received a licence to operate a separate fintech entity, bringing the number of structurally separated entities to 12 (out of 16 fintech markets). We continue to progress our work in establishing the Topco structure for fintech, and anticipate that this will be concluded before Q1 2022.”

The Group’s strong overall performance was despite a 1.7 million decrease in subscriber numbers to 277.9 million as MTN Nigeria’s subscribers declined because of restrictions on all new SIM sales and activations in that market. In this context, the Group’s active data subscribers declined by 1.3 million to 115.6 million, while the number of MoMo customers increased by 0.2 million to 46.6 million. Excluding the impacts of MTN Nigeria, MTN Group total subscribers and active data subscribers increased by 3.4 million and 1.3 million respectively.

COVID-19 continued to impact lives and livelihoods across the world, including at MTN. By 31 March 2021, the Group had reported 1 557 COVID-19 infections and mourned the loss of 11 MTN employees to the virus across our markets. We continue to prioritise the health and safety of our people.

Alongside equity partners, in April we submitted a bid for one of two telecoms licences to operate in Ethiopia, Africa’s second most-populous country which represents the last and largest telco liberalisation opportunity in the world. MTN’s participation in the bid process aligns with our pan-Africa focus and capital allocation framework.

The Group remains committed to its asset realisation programme (ARP) and is confident of making progress on realising the 29% stake in tower company IHS Group in the short term. This is key to MTN’s ARP. IHS continues to explore an IPO of its shares in line with its public statement made in August 2020.

“Looking ahead, we are focused on executing our Ambition 2025 strategy, driving growth, de-leveraging the Holdco balance sheet and unlocking value, whilst navigating the impacts of the pandemic,” concluded Mupita. 

www.mtn.com

Telecel Group launches applications for Africa startups accelerator programme

Technology sectors such as FinTech, InsureTech, AgriTech, eCommerce, HealthTech, and CleanTech are not only solving some of Africa’s most pressing problems, but also contributing significantly to the continent’s economy.

In fact, the so-called Internet economy is set to reach 5.2% of gross domestic product (GDP) by 2025, contributing about $180-billion to the African economy. To develop the potential of startups driving the Internet economy, Telecel Group has opened applications for the ASIP Accelerator Program, powered by Startupbootcamp AfriTech.

 The Program helps startups achieve 18-24 months of growth in just three months. Now, the next generation of early-stage African tech startups disrupting a wide range of industry sectors are being sought.

Ten startups will be selected to participate in the Program that will give them access to expert-led masterclasses covering scaling fundamentals – from the business model canvas, and lean methodology, to fundraising. They will also receive tailored mentorship from carefully selected mentors, will be connected with venture capitalists and angel investors from around the world, get to meet the leading corporates in their industries for pilot projects and partnership opportunities.

The successful startups will receive €15,000 in cash and have access to over €500,000 in exclusive partner deals from leading technology providers such as Amazon Web Services, Google Cloud, HubSpot, and SendGrid, amongst others.

The three-month Program will conclude with a digital Demo Day during which startups will present their newly scaled up solutions to hundreds of investors, corporates, mentors and press attendees. Notably, the participants will continue to receive support long after the Program ends via the Alumni Growth Program which offers access to alumni-only events, deals and tailored introductions.

Twenty-nine startups completed the first Startupbootcamp AfriTech Program and 90% of participating startups are still operating and scaling at impressive rates. What’s more, 40% have raised follow-on rounds of funding, with the average increase in valuation being 10x since their Demo Day.

In addition to corporate partner, Telecel Group, Program sponsors include Google Cloud Platform, Amazon Web Services, Hubspot, VC4A and Cloudworx. There are a limited number of slots for additional corporate Founding Partners to join the consortium.

These partners will have the rare opportunity to help determine the key challenge areas that will be the focus of the Program’s startup scouting and sit on the exclusive selection committee that will choose the top 10 startups to participate.

Additionally, they will have the chance to engage in curated pilot and proof of concept projects with select startups to accelerate innovation within their organisations. Corporates that are interested to amplify their internal Innovation Agenda can email afritech@startupbootcamp.org. The completely virtual, Pan-African Program kicks off in July 2021.

Applications are open now and will remain so until 14 May. To apply, or for more information, go to https://bit.ly/SBC-ASIP

www.telecelgroup.com

BK introduces high-tech ATMs to boost customers’ experience

Bank of Kigali has started rolling-out new Automated Teller Machines (ATMs) whose features will ensure quick, enhanced security and quality service delivery.

Manufactured by renowned ATM producer and vendor, Diebold Nixdorf, the new ATMs are the first of their kind “DN Series” to be deployed in Africa.

Among the features that the new ATMs have include fingerprint option which is expected to reduce theft that might occur when a client’s card is in the hands of someone who knows their pin code and may take advantage to withdraw cash without the owner’s consent.

Another component is a tap and go option that will enable BK clients to tap on the machine which will dispense cash, with no need of inserting the card into the card reader.

The lender says that it will soon activate the Near Field Communication (NFC) on the new ATMs to help one access the tap and go feature. According to BK, this will among others help new ATM users to avoid cases where their cards would be seized by ATMs or break down because of fewer skills on how to insert their cards in the teller machine.

Additionally, the new devices allow bulk note deposits.

“The first step we are taking is to distribute these machines in as many places as possible, then incorporate these features in the near future. Not all machines will possess all these features,” said Caleb S. Gakunju, Head of Payments at BK.

According to Gakunju, the backbone of introducing these machines lies in the bank’s commitment to good service delivery.

“We are investing more in technology to serve our customers better, despite the Covid-19 challenges that everyone is going through. We seek to ensure quick and quality service delivery,” he underlined.

“These machines are quick to process transactions, thanks to the advanced processors they have,” he added.

So far, BK has acquired 15 of these ATMs and the lender said that it has also ordered additional 30 ATMs of the kind.

Sites where the new machines have already been deployed include at UTC, Kigali Convention Centre, Kigali Marriott Hotel, Intare Conference Arena, Kabeza Market, Rusizi town, Rubavu main branch and the branches of ULK and Giporoso.

In the near future, the new teller machines will also be set up at Ruli branch, Kigali Heights, Kibagabaga, and at BK Head Office.

The development adds to Bank of Kigali’s initiatives that intends to promote cashless economy.

bk.rw

MTN Rwanda considers setting up financial tech firm

The development is an attempt by the telecom operator to increase relevance to financial technology which is increasingly characterizing the financial industry in aspects such as inclusion.

MTN Rwanda CEO Mitwa Ng’ambi said that with financial technology fast becoming influential in digital finance, they have been considering setting up an independent subsidiary running financial technology operations.

This would see Mobile Money move from a department within the telecom to a stand-alone company.

“Mobile Money was initially set up as a department within MTN Rwanda. Where we stand today, we see the future of digital finance, Fin-tech so much bigger than what we are today,” she said.

She said that they had already commenced engagement with the regulator, Central Bank, to establish the requirements and characteristics of the new firm.

She, however, said that the timelines for the establishment and constitution of the new firm are yet to be determined.

The new firm, she said, is expected to be agile to trends in fin-tech hence the autonomous structure.

This comes at a time when Fin-tech is expected to be a key driver in driving financial inclusion, fostering savings, access to short-term credit among others.

With increased mobile penetration and usage, the avenue could bridge a gap in access to financial services which financial sector operators such as banks have been unable to bridge.

In 2020, MTN Rwanda saw a significant uptake of their Mobile Money and data services with initial estimates pointing to a 20 per cent (year on year)growth in revenue.

Though audited financials are not out yet, Mark Nkurunziza, the operator’s Chief Financial Officer, said that they have noted a shift in revenue composition with data and Mobile Money increasingly raking in significant portions of revenue.

Chantal Kagame, the firm’s Chief Business and Corporate Affairs Officer, noted that during the course of 2020, the active mobile money user base had grown from 2.8 million to 3.2 million while MoMo Pay users had increased from about 200,000 to about 1.4 million.

This, she noted was indicative of progress in uptake of cashless payments within the economy.

“We currently have more than 2.4 million customers using MoKash both by saving and taking loans. These are mainly by low-income earners where the service has helped them to save, take loans and develop their lives in general,” she added.

However, with the increased uptake and usage mobile money, there has been an increase of fraud which the firm said is constantly working to curb including

MTN is also expected to list on the Rwanda Stock Exchange by way of introduction allowing Rwandans to invest and partake in its returns.

The development will see the 20 per cent stake held by Crystal Telecom Limited held directly by the public.

 While 100 per cent shares of MTN Rwanda will be listed on the stock exchange, the 20 per cent stake held by Crystal Telecom will be available for trading by the public. MTN Group will hold the 80 per cent shares.

The Board of Crystal Telecom has recommended that the shareholders of CTL become direct shareholders in MTN Rwanda when the listing happens through a transaction where CTL shall repurchase all its shares from its shareholders in exchange for MTN Rwanda shares as consideration (share swap).

The board has proposed that when MTN Rwanda lists, the share swap will be on a 1:1 ratio basis, with each shareholder receiving 1 MTN Rwanda share for every share repurchased by the CTL.

The share swap and the approval, therefore, shall be conditional upon the successful listing of MTN Rwanda on the RSE, an announcement by the Board mentioned.

CTL is also expected to wrap up operations and close the shop thereafter.

www.mtn.co.rw