Telecom giant MTN Uganda made Shs 675bn in the six months to June 30, 2017 compared to Shs 619bn in the same period last year, the company announced.
The group’s half-year results released on Wednesday show that MTN Uganda’s profits went up by 9.4 per cent due to strong data usage and mobile financial services.
In Uganda, data and digital revenues grew by 2.2 per cent to rake in 635 million South African rand (Shs 170.5bn).
The performance is an indication of where the future revenues for telecom giants lies – in the digital platforms.
That revenue base could, however, face stiff competition from the emergence of financial technology solutions such as Mobinet’s SIMPAY and Mastercard Masterpass QR, both of which simplify digital payments for bank customers. Financial technology solutions are partly meant to reduce banks’ reliance on mobile telecom firms.
However, telecom firms still have a large pool of clientele to tap into, especially now that more people are spending most of their time browsing internet and chatting on social media platforms.
The digital revenues for telecom firms also include the money transfer services. MTN mobile money remains the firm’s biggest cash cow.
Last year, MTN Uganda launched MoKash, where individuals can save and borrow money.
“Mobile financial services continued to gain traction, with the group adding 2.7 million active MTN mobile money customers in the first half of the year,” the company said in the report.
Data usage in Uganda on MTN platforms went up by 29.2 per cent.
“This was mainly underpinned by an increase in data traffic and good growth in data bundle adoption,” MTN said in its half-year report.
With the price of acquiring a smartphone falling dramatically, more Ugandans now find it easy to own a handset and browse the internet.
MTN Uganda has of recent cut its fees for data as the competition in that segment heats up. Voice revenue remained flat but MTN said this was “a positive reinforcement of our [MTN group] work to stem the decline in the contribution of voice to the business, particularly in Nigeria.”
MTN Uganda said its subscriber base grew 5.8 per cent to 11.2 million people. During the on-going exercise of re-registering Sim-cards, MTN Uganda says up to 89 per cent of its subscribers registered.
The deadline for registration is August 31, 2017. Digital revenues increased by 19.7 per cent, supported mainly by mobile money. It says the number of active mobile money customers increased by 11.3 per cent to 4.6 million users.
On expenses in Uganda, MTN Uganda says it entered into operating lease agreements with Uganda Tower InterCo B.V, which is partly owned by American Tower Corporation. It says it spent Shs 62.6bn for the six months ended June 30, 2017. In the same period last year, it spent Shs 65.8bn.
MTN group profits were up by 6.75 to R64,315 million (Shs 17.3tn). The main contributing countries were Nigeria, whose revenues grew by 10.8 per cent, Uganda (9.4 per cent), Ghana (22.6 per cent), and Ivory Coast (13 per cent).
MTN Cameroon’s revenues declined while those of MTN South Africa, the head office, grew by a paltry 1.6 per cent.
As reported by The Observer