MTN Group has announced a strong set of financial results for the third quarter, supported by the performance of its larger operations in South Africa, Nigeria and Ghana, and good group-wide growth in subscriber numbers despite challenging trading conditions which have taken a toll on people everywhere.
“As the COVID-19 pandemic has continued to impact lives and livelihoods across our markets, the group has demonstrated strong operational execution and resilience,” said MTN Group president and chief executive officer, Ralph Mupita.
To meet the increase in data and digital usage, he added that MTN had focused its investment on network capacity and resilience and modernising its IT systems, spending R16 billion in the year to the end of the third quarter.
Service revenue grew by 11,4% to more than R43 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 13,9% and the group EBITDA margin widened by 1,4 percentage points to 43,3%, in line with medium-term targets.
“We recorded solid growth in voice revenue of 3,9%, which reflects an encouraging recovery supported by the easing of lockdown restrictions,” said Mupita. “Data revenue grew by 31,9%, bolstered by increased demand for work-from-home services, digital entertainment as well as online education offerings.”
The group also reported growth of 21,0% in fintech revenue and 37,5% in digital revenue, driven by the increased adoption and usage of digital offerings.
In the quarter, MTN added 12 million subscribers to reach a total of 273 million across 21 markets, as well as adding 5,3 million active data users to 107 million. In our work to enable greater financial inclusion, we reached a significant milestone by surpassing the 40 million MTN Mobile Money (MoMo) user mark, an addition of 3,5 million in the quarter to 41,8 million at end-September.
“Apart from greater adoption brought on by COVID-19, more people used MoMo because of enhancements to the functionality of the MoMo app, the large increase in registered MoMo agents, as well as the integration of MoMo into our instant messaging platform Ayoba in some of our markets,” said Mupita.
MTN South Africa performed particularly well, sustaining its turnaround, with an acceleration in its core consumer and enterprise business units. MTN Nigeria recorded a solid result with some recovery in revenue growth under difficult operating conditions, and MTN Ghana delivered another good performance.
As part of its asset realisation programme, MTN Group completed its exit from its 18,9% investment in e-commerce venture Jumia as well as the localisation of an 8% shareholding in MTN Zambia, realising net proceeds of approximately R2,3 billion and R204 million respectively.
Looking ahead, Mupita said the group remained focused on managing the impacts of the COVID-19 pandemic on its staff, customers, networks and the balance sheet and liquidity profile of the group. Through its Y’ello Hope initiative, it would continue to support those stakeholders who have been particularly hard hit by the pandemic.
“Despite the relaxation of lockdown restrictions, the operating environment remains challenging and uncertain. We will continue to build on our operational and financial resilience. We have now increased our full year forecast for capital expenditure to R26 billion, to ensure that our networks provide reliable connectivity and digital services to all of our 273 million-and-growing subscriber base,” he said.
Nokia and Airtel Kenya Lay 5G Foundations In Nairobi
Nokia announced that it has been selected by African mobile operator, Airtel Kenya in a three-year deal to modernize Nairobi with high speed 4G and 5G-ready hardware from its comprehensive AirScale portfolio.
Deployment, which began in June, will cover hundreds of sites and include upgrading existing 2G, 3G and 4G radio access network (RAN) coverage in urban, semi urban, highways, tourist spots and central business districts in Nairobi and the rest of Kenya.
Nokia’s future-proofed network infrastructure will also offer Airtel Kenya the option to smoothly transition to 5G when necessary. The upgraded network will deliver enhanced connectivity to customers of Airtel Kenya and access to new, high-speed data services.
Nokia is supplying Airtel Kenya with its AirScale Single RAN (S-RAN) portfolio for both indoor and outdoor coverage, including base stations and radio access products. These solutions will enable Airtel Kenya to deliver improved connectivity and capacity benefits including enhanced voice and data services to its subscribers while reducing complexity and driving cost efficiencies. The improved network will provide higher data speeds using additional 4G spectrum bands and provide access to secure, high-speed and reliable data services.
As part of the deal, Nokia will also deploy its cloud-agnostic NetAct software solution to securely manage Airtel Kenya’s networks. Nokia will also provide digital deployment, network planning and technical support services helping Airtel to launch its services faster to the market and ensure customer requirements for quality are met.
P. D. Sarma, CEO, Airtel Kenya, said: “We are in the midst of rolling out our network to enhance coverage along with modernization of our data network that will help us to deliver improved, high-speed data services to our customers. This will allow our customers seamless coverage enhancing their browsing experience further. We are excited to partner with Nokia on this project. Its technology portfolio improves our network quality considerably and also allows us to move to 5G services in the future.”
Rajiv Aggarwal, Head of CEWA Market Unit at Nokia, said: “This is an exciting deal in an exciting market. We are proud to supply Airtel Kenya with our comprehensive AirScale portfolio and support the operator with its efforts to deliver the best possible connectivity experiences to end users in Kenya. In a maturing market, we look forward to helping Airtel execute its strategy in the short-term as well as set it on the path to 5G services.”
Interswitch, Finastra Consolidate Partnership For Improved Services Across Africa
Interswitch, Africa’s leading technology-driven company focused on the digitization of payments in Africa, has announced its partnership with Finastra, one of the world’s largest fintechs, to deliver innovative, world-class technology-based solutions for digital payments, corporate banking, treasury and trade finance, to financial institutions in Africa.
Consistent with Interswitch’s market expansion strategy, the partnership will enable the company to deliver on its vision to transform Africa’s wholesale and transaction banking business by building world class products and solutions, thereby, delivering innovative and trusted technology to banks and the communities they serve.
With this strategic partnership, Interswitch becomes Finastra’s lead technology partner in the Nigerian market. This enables Finastra to bring the broadest set of financial software solutions to financial institutions in Nigeria and across Africa, in conjunction with Interswitch’s strong understanding of the local banking and payments landscape, as well as the ability to deploy solutions across these markets.
Mitchell Elegbe, Founder and Group Chief Executive Officer at Interswitch stated that the company is committed to continually explore opportunities, including partnerships, with leading brands such as Finastra, to deliver world-class technology, innovative products and digital solutions to African financial institutions.
He said: “Our partnership with Finastra is consistent with our strategic growth plan and we both share the vision of deepening access to financial services by providing world-class technology and innovative solutions. The partnership enables Finastra to seamlessly deploy its technology in this market. For Interswitch, we will be leveraging our proven success and expertise in delivering transaction banking solutions to support Finastra in localizing and implementing their technology in this region.
The partnership positions Interswitch as the go-to business for financial solutions, including treasury and trade solutions, to banks and other financial institutions in Africa. Two of the Finastra solutions now available via Interswitch include Fusion Kondor and Fusion Trade Innovation.
Fusion Kondor, Finastra’s treasury solution provides a low-risk system for bank treasury operations to grow and expand their businesses at the pace and complexity level required. In addition, it enables increased automation, improved efficiencies and reduced costs through the removal of fragmented data sets and tighter integration.
Finastra’s Fusion Trade Innovation provides market-leading functionality for digital trade and supply chain finance. It provides banks with the electronic submission and processing of information required by customs, uses risk-based inspections and promotes efficiency in product-specific inspections.
Hamid Nirouzad, Head of Partner Ecosystem MEA & CIS at Finastra said, “Interswitch has a proven track-record of delivering solutions to commercial banks, as well as a strong understanding of the local banking landscape across Nigeria and sub-Saharan Africa. Finastra is committed to providing its solutions to financial institutions across the world, and partnerships such as this result in successful projects, with rapid delivery at reasonable cost.”
Finastra delivers technology to financial institutions of all sizes across the globe, including 90 of the world’s top 100 banks.
IFC, Google Estimate Africa’s Internet Economy To Reach $180bn By 2025
Google and the International Finance Corporation (IFC have estimated that Africa’s Internet economy has the potential to reach 5.2 per cent of the continent’s gross domestic product (GDP) by 2025, contributing nearly $180 billion.
The report titled, e-Conomy Africa 2020, projects potential contribution could reach $712 billion by 2050. The driving this growth is a combination of increased access to faster and better quality Internet connectivity, a rapidly expanding urban population.
Also, a growing tech talent pool, a vibrant startup ecosystem, and Africa’s commitment to creating the world’s largest single market under the African Continental Free Trade Area.
Currently, Africa is home to 700,000 developers and venture capital funding for startups has increased year-on-year for the past five years, with a record $2.02 billion in equity funding raised in 2019, according to Partech Ventures Africa.
Interim Managing Director, Executive Vice President and Chief Operating Officer of IFC, Stephanie von Friedeburg said, “The digital economy can and should change the course of Africa’s history. This is an opportune moment to tap into the power of the continent’s tech startups for much-needed solutions to increase access to education, healthcare, and finance, and ensure a more resilient recovery, making Africa a world leader in digital innovation and beyond.”
Digital startups in Africa are driving innovation in fast-growing sectors, including fintech, healthtech, media and entertainment, e-commerce, e-mobility, and e-logistics, contributing to Africa’s growing Internet gross domestic product (iGDP) — defined as the Internet’s contribution to the GDP.
“Google and IFC have created this report to highlight the role the digital startup sector is playing and other factors driving the continent’s growth, in order to showcase and support the opportunities the continent presents,” said Google Africa director Nitin Gajria.
An analysis within the report, conducted by Accenture, found that in 2020, the continent’s iGDP may contribute approximately $115 billion to Africa’s $2.554 trillion GDP (4.5 per cent of total GDP). This is up from $99.7 billion (3.9 per cent of total GDP) in 2019, with the potential to grow as the continent’s economies develop.
Investments in infrastructure, consumption of digital services, public and private investment, and new government policies and regulations will play an important role in supporting Africa’s digital growth. The report notes that investment in digital skills will also need to increase in order to help drive technology usage and continue to grow the continent’s talent pool.
The report is available for review and download here.
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