Telecommunications group MTN Uganda has achieved double-digit growth during the first quarter of 2023.

The group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 17.3% to Ush326.4-billion, underpinned by higher service revenue and continued operational efficiencies, amid the company’s expense efficiency programme and disciplined capital allocation.

The group’s Ebitda margin increased to 0.4 of a percentage point to 52%, above the medium-term target of 50%, during the quarter ended March 31, 2023.

Profit after tax increased 20% to Ush120.6-billion during the first quarter under review.

“MTN Uganda recorded a good start to the year with a solid first quarter performance, tracking positively against our medium-term targets with a solid revenue performance and margin expansion. This was delivered through disciplined execution of our strategy and incremental improvements in the trading environment with a relatively stable currency coupled with subsiding albeit high inflation,” says MTN Uganda CEO Sylvia Mulinge.

MTN Uganda’s overall service revenue increased by 15.8% to Ush621.1-billion, driven by double-digit growth in data and fintech revenues and underpinned by a strong recovery in voice revenue.

Voice revenue increased 8.8% to Ush272.9-billion, largely supported by a strong 11.6% growth in MTN Uganda’s subscriber base to 17.8-million.

The voice contribution to service revenue during the first quarter of 2023 decreased to 44%, from 46.8% in the first quarter of 2022, in favour of higher growth verticals.

Data revenue increased by 25.7% to Ush145.3-billion during the quarter under review, owing to a 25% increase in active data users to 6.7-million and 11.6% growth in the megabyte per active data user.

“Our smart phone penetration improved to 34.7%, which also underpinned the growth in data traffic on the network of 53.5%, with fourth-generation (4G) traffic making up 68.3%. Our home broadband revenue segment grew by 54% supported by strong customer growth,” she says, noting that the data contribution to service revenue increased to 23.4% in the first quarter under review, from 21.5% in the first quarter of 2022.

Fintech revenue during the three months under review increased 20.7% to Ush174.8-billion, attributed to the robust performance of the group’s payments service and recovery in the savings and lending portfolio anchored by strong growth in basic revenues.

During the three months to March, active fintech subscribers increased by 14% to 10.9-million.

MTN Uganda’s overall mobile money ecosystem grew strongly with merchants doubling to 268 000, while agent numbers remained flat at 164 000 in line with the agent rationalisation strategy to ensure more sustainable businesses for our distribution partners.

The expansion of merchants enabled a 26.5% increase in the number of transactions on the platform to 753-million and transaction value growth of 35.5% to Ush28.5-trillion. The fintech contribution to service revenue increased to 28.1% from 27% in the corresponding period last year.

“Our digital portfolio revenues grew strongly by 170.5% to Ush2.7-billion supported by robust growth in our video streaming and our content value added services portfolio. This was further supported by strong digital subscriber growth, particularly on the ayoba super application, closing with 1.2-million customers.”

During the three months to March 31, 2023, MTN Uganda’s capital expenditure (capex) decreased by 16.3% to Ush95.4-billion as a result of base effects arising from accelerated investment in the prior year.

“As a result, our capex intensity decreased by six percentage points to 15.2%, within our targeted range of mid-teens,” says Mulinge.

MTN Uganda’s investment has been focused on 4G expansion, with the 4G population coverage significantly increasing from 65.1% to 80.7%, as well as fibre network roll-out and infrastructure modernisation.

“We are also investing in our network in preparation for fifth-generation (5G) to address our customers’ requirements and support sustained growth. In line with our 5G transition, MTN Uganda launched a partnership with Huawei Technologies to align our infrastructure towards a cloud native 5G Capable Core network.”