What you need to know:
MTN indicates that voice revenues declined by 4.9 percent for the period ended June as a result of reduced spending by subscribers, particularly in rural areas.
MTN has reported a drop in voice revenues, signaling a shift in telecommunications’ revenue streams.
In details published in the telecom’s half year results, MTN indicated that voice revenues had declined by 4.9 percent as a result of reduced spending by subscribers, particularly in rural areas.
This, the telecom noted, reflected the impact of macroeconomic pressures that have forced a number of Ugandans to cut back on spending.
However, MTN also indicated that voice revenues could have been impacted by structurally higher demand for data services.
Voice has, even amid growth of new revenue streams, been the largest revenue earner not only for MTN but the entire telecom sector.
However, the shift means that telecoms are now relying on other revenue streams such as data, Fintechs and digital services to cover up lost revenues.
During the period, MTN indicated that data revenues had increased by 36.8 percent supported by a 21.8 percent growth in active data users, which grew to 5.7 million subscribers.
Revenues from Fintechs grew by 20.5 percent due to an increase in mobile money subscribers, which rose by 14.1 percent to close off the period with 9.8 subscribers.
MTN remains one of Uganda’s most profitable companies and in the period ended June, the telecom returned a profit after tax growth of 48.1 percent to cap the half year with a Shs193.6b profit.
The telecom also reported that earnings before interest, tax depreciation and amortisation (EBITDA) grew by 7.2 percent to Shs548.7b but reported a 1.3 percentage point decline in EBITDA margins to 50.2 percent.
During the period, service revenue grew by 10 percent to Shs1.087 trillion, while capital expenditure, excluding right of use assets, increased by 30.7 percent to Shs2.017 trillion.
Digital revenues increased by 9.9 percent driven by performance of gaming services and more than two-fold growth in video stream services.
“Our growing youth led subscribers base provide an encouraging foundation for the sustained growth of digital business over the medium term,” the company said.
In notes published together with the results, Mr Wim Vanhelleputte, the MTN outgoing chief executive officer, said the telecom had remained resilient amid a difficult macroeconomic environment, characterised by increased inflationary and currency pressures.