Showing posts with label telecommunications. Show all posts
Showing posts with label telecommunications. Show all posts

Tuesday, March 5, 2024

Video - 5G network subscriptions in Nigeria increased to 2.3 million in December

Despite this growth, 5G comprises just over 1 percent of Nigeria's total active telephone service subscriptions, with 2G still dominating at 58 percent. Industry experts argue that the higher cost of 5G-enabled devices remains a barrier to wider adoption.


Friday, March 1, 2024

MTN Nigeria posts ₦137 billion loss amidst naira devaluation

MTN Nigeria faced a challenging year in 2023, as the telecoms giant reported a loss after tax of ₦137.0 billion, a huge contrast to the ₦348.7 billion profits recorded in 2022.

The net foreign exchange loss for 2023 compared to 2022 was N740.434 billion, showing a YoY increase of +804.93%, as opposed to N81.822 billion in the previous year. However, revenue grew by 22.7% from N2.01trn to N2.47trn.

This is contained in the company's audited financial results for the year ended 31 December 2023.

According to Karl Toriola, MTN Nigeria CEO the telecom giant witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1.

The financial statement revealed that MTN's services revenue grew by 22.4%, driven primarily by data revenue growth of 39.8%. Voice revenue was up by 9.7%.

The company sustained robust commercial momentum in its connectivity business and platforms, fueled by the expansion of its user base, reaching over 4 million subscribers in 2023 and elevating the total base to 79.7 million. Data subscribers for the company increased by over 5 million to 44.6 million, which helped to drive total data traffic growth of 44.9%.

Dividend payment:

On 27 July 2023, the company's Board of Directors approved interim dividends of N117.48 billion for the year ended 31 December 2023 (Interim 2022: N113.99 billion). The interim dividend were paid out of interim profit made during the same period and represents N5.60 kobo per ordinary share on the issued share capital of 21 billion ordinary shares of 2 kobo each for the period ended 30 June 2023.

Given the significant currency devaluation and its impact on the retained earnings, the Directors will not be recommending a final dividend payment, in view of the resulting loss for the year ended 31 December 2023.

Fintech revenue

This increased by 2.4%, led by Xtratime (our airtime lending product), which rose by 2%. However, despite the challenges from the NIN requirement for KYC introduced in Q4 by the CBN, we added 3.3 million active wallets in the year to 5.3 million. This helped to drive MoMo PSB revenue, which rose by 8.1%.

Active mobile money (MoMo PSB) wallets increased by 163% to 5.3 million, powered by 326,000 MoMo agents, and 324,000 merchants in its ecosystem.


MTN says it expects 2024 to be a challenging year due to the rising inflation and devaluation of the naira. In January 2024, the inflation rate reached 29.9%, while the exchange rate has further devalued to N1582/$ as of 26 February 2024. "This is anticipated to put additional pressure on consumers, the cost of doing business and further potential forex losses," it said.

By Adekunle Agbetiloye, Business Insider Africa

Related story: Video - MTN CEO resigns due to $5.2 billion fine imposed by Nigeria

Tuesday, October 29, 2019

$2 billion tax dispute case between MTN and Nigeria set for January 2020

A federal judge in Lagos has set Jan. 30 and 31 for the hearing of a $2 billion tax dispute between South Africa’s MTN Group and the Nigerian government.

The attorney general has demanded the telecoms firm pay the tax bill relating to the import of equipment and payments to foreign suppliers from 2007 to 2017, but MTN argues the claim is without merit and that the attorney general exceeded his powers in making the request.

On Tuesday, lawyers for the government submitted their case against MTN, insisting the attorney general has the power to levy the charge and requesting a court date in late January to continue the proceedings.

Government lawyers had in June asked that the case be adjourned until October to give time to prepare their case, the latest dispute between MTN and the Nigerian government.

Nigeria is the South African firm’s biggest market, with roughly 58 million users accounting for a third of its core profit.

In December, MTN agreed to make a $53 million payment to resolve a separate dispute with Nigeria’s central bank, which said the company improperly removed $8.1 billion from the country between 2007 and 2008.

MTN also this year was set to pay off another 330 billion naira ($1 billion) fine imposed for not disconnecting unregistered SIM cards.

In May, the company’s local unit, MTN Nigeria, listed in Lagos in a 2 trillion naira flotation that made it the second-largest stock on the bourse by market value.

It has said that it would sell more shares to the public and increase local ownership once the tax row is resolved.


Thursday, August 1, 2019

MTN to start to provide financial services in Nigeria

The fledgling mobile money market in Nigeria is about to get a major shake-up.

MTN Nigeria, the country’s largest telecoms operator, has been granted a “super agent” license which allows it set up an agent network through which it can provide financial services. It’s the first step in MTN’s plans to finally roll out mobile money services in Africa’s largest economy as the company says it has also applied for a payment service bank license, which will allow it “offer a broader and deeper range of financial services.”

The license comes after reforms by Nigeria’s central bank last October permitting telecoms operators to get mobile money and banking licenses in a bid to boost financial inclusion and facilitate the long-held ambition for a cashless society.

As already seen in several African countries, the real-life application of mobile money among unbanked populations ranges from quick, seamless fund transfers to facilitating payments and boosting small businesses. In Ghana, the service has been adopted for investing as well with MTN’s selling shares for its landmark IPO mainly through mobile money. The West African country has recently become the fastest-growing mobile money market in Africa, with registered accounts increasing six-fold between 2012 and 2017.

The Nigerian reforms now allow telecoms operators like MTN attempt to tap into the promise of mobile money to offer similar services locally. As Africa’s most populous nation as well being home to a vast population of unbanked adults, Nigeria remains an attractive prospect given the success of mobile money services in other parts of the continent.

At the end of last year, there were nearly 400 million registered mobile money accounts—nearly half of the global total—across sub-Saharan Africa with nearly 90% of users in East and West Africa. In Ghana, Kenya and Zimbabwe, over 60% of adults have mobile money accounts.

Compared to standalone startups who have to build marketing and distribution infrastructure through a network of agents from scratch, mobile money services owned by telecoms companies have the in-built advantage of offering their services to an existing user base of millions of subscribers. Indeed, the continent’s biggest mobile money players are all owned by telecoms operators.

In MTN’s case, its longstanding status as Nigeria’s most dominant telecoms operator means it will have a pool of 67 million users to offer its services. And there’s room for significant upside in the near future too with Nigeria predicted to add 31 million mobile subscribers by 2025.

The license is part of South African-owned MTN’s delicate balancing act in Nigeria. It has a tumultuous history of billion-dollar fines and lawsuits in its largest market. Most recently, the company faced allegations of illegally repatriating $8.1 billion in profits and owing $2 billion in taxes. In 2016, it reached a $1.7 billion settlement with Nigeria’s government after a protracted SIM card dispute and an initial $5.2 billion fine.

By Yomi Kazeem