Between MTN and Airtel who is giving investors better returns? 

What you need to know:

  • The two telecoms, which have some of the largest market valuations, have excited a largely quiet Uganda Securities Exchange in the last three years

For the first time in two decades, the markets are now able to compare pound-per-pound which of the two stocks - Airtel and MTN - offer the best returns.

Of course, the two telecoms hold some of the biggest market valuations, and their entry on the stock exchange in the last three years has excited what was largely a quiet market.

Thus, the markets have been watching with keen interest.    

Details published last week give a clear picture and place MTN in a poll position in many different aspects including revenues and shareholder returns.

It is the first time Airtel has published its results for the Ugandan unit, which was listed on the Uganda Securities Exchange (USE) in November last year. MTN has been publishing its results since 2021.

However, it should be noted that Airtel excluded its mobile money business from its Initial Public Offering, while MTN listed it as one of its three subsidiaries in 2021.

At the time of floating a 20 per cent stake, which was under-subscribed, Airtel reasoned that the exclusion of mobile money from the IPO was not an issue because the most important revenues the telecom generates were from voice and data.

The National Payment Systems Act separates mobile money from telecom operations, therefore, MTN and Airtel operate their mobile money businesses as separate units but maintain a mutually beneficial relationship. 

For instance, Airtel Mobile Commerce Uganda, the mobile money business, last year entered an agreement to borrow Shs75b from Airtel - the telecom arm - in different tranches to fund the telecom’s business plan. Already, details show, Shs40b of the Shs75b, payable later this year,  has been advanced to the mobile money unit.

Thus, whereas the Airtel mobile money business seems to be a drain on Airtel, on the other hand, mobile money continues to drive MTN’s revenues, contributing an average of Sh713b in income annually, which positions it as a major cash cow outside voice.

But because Airtel excluded its mobile money business from the IPO, investors are not able to share into about Shs150b in profits generated from the unit through dividend, interest and other incomes, yet there are indications that the unit is feeding off the telecom business through inter-company loans. 

Airtel’s financial results indicate that as of December 2023, the telecom’s largest revenue streams were voice, which generated Shs899b and data services (Shs775b), while MTN generated Shs1.12 trillion from voice, Shs771b and Shs621b from mobile money and data services, respectively.

MTN has also registered the highest growth in all key revenue streams compared to Airtel.

During the period ended December 2023, MTN’s voice revenues grew by 11.55 per cent to Shs1.12 trillion compared to Airtel’s 3.45 per cent to Shs899b.

Similarly, MTN’s data revenues grew by 21.62 per cent to Shs622b, compared to Airtel’s 18.07 per cent to Shs775.7b.

Thus the details above gave MTN a superior position compared to Airtel.

Impact of capital investment

Airtel’s attempts to enhance its services cost it more than Shs360b in 2023 mostly in capital expenditures, which it said ate into its profit margins, thus decreasing by 8.83 percent to Shs296b from Shs326b in 2022. 

The profits were, however, lower than the Shs457b the telecom had projected in its IPO prospectus.  Airtel indicated that in an attempt to enhance its services, it committed about Shs360b on network infrastructure, while at the same time access charges rose exponentially by 56.64 per cent to Shs66b in 2023.

The telecom also noted that network operating expenses had increased to Shs314.5b from Shs251.4b, ultimately pushing its net expenses to Shs1.192 trillion from Shs984b in 2022. 

“The network operating costs were largely driven by an addition of 399 new sites. These [expenses] include rentals and electricity charges,” David Birungi, the Airtel public relations manager, said last week.

On the other hand, MTN registered a 21.4 per cent increase in profits to Shs493b in 2023 due to a 22.1 percent increase in service and data revenues. 

Just like Airtel, MTN also invested Shs353.5b in network and infrastructure upgrades and expansion.


When all is said and done, investors will be looking at their bank accounts to compare returns.

MTN last week indicated investors would receive a dividend of Shs18 per share, or Shs403b combined pay-out for the year ended December 2023.

This means that investors will receive a dividend return of 10.5 percent due to a13.2 percent increase in the total pay-out compared to 2022.

“Profit after tax increased by 21.4 per cent to Shs493b with a higher profit margin of 18.5 per cent. In line with our goal to maximise shareholder value as per our dividend policy, the board has approved a proposed dividend of Shs403b, translating to 81.7 per cent pay-out,” MTN said in a corporate notice.

On the other hand, Airtel will, subject to shareholder approval, pay-out a collective annual dividend of Shs8 per share for any shareholders that could have been on the telecom’s books by March 26.

In its prospectus, the telecom had indicated that it planned to pay-out at least Shs513b, but will pay-out just Shs294b, which is slightly above half of what it had projected, with the actual dividend yield standing at 7.4 per cent.

Share price

MTN shares have steadily held at an average price of Shs170, with an overall valuation of about Shs3.8 trillion, in the four months since Airtel listed on the USE.

However, on the other hand, since its early peak at Shs100, the Airtel share price has dropped to Shs87 with an overall market valuation of Shs3.4 trillion, which has within four months dropped from Shs4 trillion. When MTN listed in 2021, its price dropped from a high of Shs200 per share, before it firmed at Shs170 per share.

Analysts have noted that Airtel’s share price could move northwards or further down based on how the markets respond to its financial results.

“The value of shares traded so far since [Airtel’s] listing is Shs60m, which is way less than the total [value of its listed shares] of over Shs200b. This shows that some commanding investors haven’t traded and this has a minimal impact on the overall share price. But we might see investors reacting to the dividend Airtel just declared, like next week,” a stockbroker, who asked to remain anonymous, said last week.

Many companies have since listing on the USE seen a drop in their share price from the IPO price, which impacts their valuation.

However, market analysts say it is normal for a stock price to make adjustments upwards or downwards, which they refer to as a market correction measure.