MTN SA sustained a resilient overall performance with service revenue growth of 3.1% for the year, underpinned by network availability improvement and commercial initiatives.
This emerged when the mobile telephony group today announced its financial results for the year ended 31 December.
While total service revenue moderated slightly to 2.5% in Q4, largely due to base effects and lower prepaid performance, MTN SA delivered encouraging acceleration in key commercial metrics in the latter part of the year, says the company.
This is despite the group’s overall service revenue declining by 15.4% on a reported basis to R177.8 billion.
It notes that prepaid data returned to growth from November. The overall MTN SA result was supported by a 6.4% increase in the number of subscribers to 39.8 million, a net addition of 2.4 million in the year, says the company.
Postpaid subscribers (excluding telemetry) increased by 6.1% to 4.3 million, driven by stronger uptake of home propositions, as well as integrated voice and data plans.
Prepaid customers increased by 5.5% to 29.9 million, says MTN, adding that customer value management (CVM) initiatives continued to gain momentum in 2024, with personalised bundle offerings now available across multiple channels.
The company explains that these offerings, designed to enhance pricing power and provide greater flexibility to consumers, saw steady growth in CVM adoption reaching 34% in Q4, compared to 29% in Q4 2023, reflecting strong customer adoption.
Total data revenue increased by 2.9% – with an encouraging acceleration in growth to 5.5% in Q4 – and contributed 47.8% to MTN SA's total service revenue, it adds.
“This growth was driven by a 6.8% increase in active data subscribers to 21.8 million, with a YOY [year-on-year] rise in data traffic by 28.3%,” says the company in a statement.
Data consumption per active prepaid data subscriber amounted to nearly 3.2GB per month (up 9.5% YOY), while an active postpaid data subscriber's consumption has increased to 22.5GB per month (up 36.6% YOY) with the bulk of the growth attributed to fixed wireless access (FWA), as more customers adopt home propositions.
Subscriber boost
MTN SA’s consumer postpaid business saw a 4.5% increase in service revenue, driven by a rise in subscriber numbers, continued strong data usage and price adjustments effected in February 2024.
“The result reflects an uptick in postpaid service revenue in the latter part of the year, with H2 growth of 5.7% and a strong Q4 (up 7.2%).”
Furthermore, it notes, MTN SA continued to execute on its home strategy, revitalising postpaid FWA, fibre-to-the-home (FTTH) and mobile internet offerings, which were well-received by customers. This resulted in a 3.5% YOY base expansion.
According to MTN, the consumer prepaid business recorded service revenue growth of 0.8%, with Q4 experiencing a slight slowdown in momentum (up 0.3% YOY).
It explains that this was largely due to increased competitive intensity in the market “as we increased prices in May 2024 and value-seeking customers continued to optimise their spend. Prepaid data returned to mid-single digit growth from November.”
Outgoing voice revenue for MTN SA declined by 5.5% (down 4.6%, including incoming voice), which reflected progress in trend compared to the 12.1% decline in FY 2023.
The outcome in voice performance was also enabled by an acceleration in Xtratime penetration, which reached 40.3% in Q4, up from 36.4% in Q4 2023.
The enterprise business continues to deliver strong double-digit performance, with service revenue growth of 10.8% for 2024.
“The fintech ecosystem continues to grow strongly, with total service revenue up by 46.8%, underpinned by strong Xtratime growth following initiatives to increase the penetration. MoMo revenue is scaling rapidly from a low base, growing at 171.6% YTD. This was driven by the ongoing expansion of the product portfolio, including insurance and payment services,” says the group.
“The digital business showed growth of 10.6% for the year, driven by an 18% increase in rich media services and 40.2% in mobile advertising.”
MTN SA signed exclusivity deals with Showmax EPL and Disney+, driving benefits to customers, which has helped customer acquisition and retention.
Rising EBITDA
MTN SA’s earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 5.1% YOY, up 4.4% excluding gains from the disposal of towers and R212 million of proceeds (FY 2023: nil) from sale of insurance receivable.
EBITDA, which included a gain resulting from lease terminations, grew ahead of service revenue as MTN SA's concerted expense efficiency initiatives yielded significant benefits, says the mobile operator.
The EBITDA margin of 37.4% was 1.3pp higher YOY, up 1.1pp to 37% excluding gain on disposal of towers and proceeds from sale of insurance receivable.
“Looking ahead, the local macro-economic environment appears to be on a stabilising trend. However, the South African economy remains under some pressure given the high levels of unemployment and sluggish GDP growth. With the improved trends in inflation rate and the recent interest rate reductions, there is some optimism on consumers’ ability to increase economic activity.
“MTN SA will continue to evolve its data propositions, with a focus on 5G, to enhance value share in the market and accelerate revenue growth. Executing on the home strategy will remain a key priority, to accelerate growth in residential customers on both FTTH and FWA.”
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