Investments: MTN Nigeria’s Profit Before Tax declines by 75.7 percent Q3 2023, to boost data revenue

*Karl Toriola, CEO of MTN Nigeria Communications Plc, attributes the development to tough operating conditions, persistent increase in inflation, removal of the fuel subsidy, and currency devaluation which all affected consumer spending in the economy

Isola Moses | ConsumerConnect

MTN Nigeria Communications Plc will increase investments in data revenue after the telecommunications giant experienced a drop in its Profit After Tax (PAT) for the first nine months of 2023.

ConsumerConnect learnt while the leading Mobile Network Operator’s (MNO) revenue increased by 21.76 percent to ₦1.77 trillion in nine months of this year, the company’s profits declined by 45.22 percent to ₦148 billion in the period under consideration.

Speaking on the Telco’s fortune within the nine-month period 2023, Mr. Karl Toriola, Chief Executive Officer (CEO) of MTN Nigeria Communications Plc, in the earnings report, said tough operating conditions and a persistent increase in inflation affected consumer spending in the Nigerian economy.

Toriola also attributed the decline in MTN Nigeria’s PAT to other macroeconomic issues, such as the removal of the fuel subsidy and currency devaluation by the Central Bank of Nigeria (CBN).

Aside from these factors, the West African country’s 2023 Finance Act also introduced VAT on tower leases effective September this year, according to report.

Amid the market performance, MTN reportedly added two million subscribers Q3 2023, whereas active Mobile Money (MoMo PSB) wallets increased by 53.1% to 3.6 million

The company’s CEO said the telecoms operator would expand its quota of 4G and 5G data subscribers going forward.

Toriola stated: “We plan to roll out capex during Q4 to reach 83% 4G and 10% 5G population coverage by year-end.

“In addition, we will leverage the additional 2.6GHz spectrum to enhance network capacity.”

He also disclosed “this will help us sustain growth in data traffic and further drive our ‘Own the Home’ strategy by leveraging the 5G fixed wireless access devices, mobile broadband solutions, and fibre-to-the-home connectivity.”

According to him, leasing MTN’s 2,500 network sites to American Towers Corp. (ATC) was part of a move to ensure profitability in the light of challenging operating conditions.

Though he acknowledged that 12,000 additional sites were under the management of IHS Towers, the company’s Chief Executive pledged to explore ways to optimise network costs in line with their “expense efficiency programme aimed at improving operating margins.”

Three things are priorities for Toriola, they include the network, MoMo PSB acceleration, and operational efficiency to make .

Mobile services

The Telco’s financial statement also reported that its services revenue grew by 21.4%, driven by voice revenue growth of 10.6% and data revenue growth of 36.4%.

MTN Nigeria added two million mobile subscribers to take its tally in nine months to 77.6 million. Active data users grew by 3.6 million.

Active mobile money (MoMo PSB) wallets increased by 53.1% to 3.6 million, powered by 293,000 MoMo agents, and 197,000 merchants in its ecosystem.