South Africa's MTN service revenue falls in the first quarter
TLDR
- MTN Group, Africa's largest telecommunications operator, reported an 18.8% decline in service revenue in the first quarter, primarily due to underperformance in MTN Nigeria.
- The company revised its expected capital expenditure for 2024 following the setback in service revenue.
- Despite an 11.1% increase in service revenue in constant currency terms, MTN's group service revenue fell to 42.9 billion rand ($2.34 billion) for the quarter, with revenue from South Africa surpassing that of Nigeria.
MTN Group, Africa's largest telecommunications operator, faced a significant setback in its first-quarter performance, reporting an 18.8% decline in service revenue. The dip was primarily attributed to the underperformance of MTN Nigeria, prompting the company to revise its expected capital expenditure for 2024.
With a subscriber base of 288 million spread across 18 African markets, MTN disclosed that its reported group service revenue fell to 42.9 billion rand ($2.34 billion) for the quarter ending March 31, down from 52.8 billion rand during the same period last year. In constant currency terms, service revenue, excluding device and SIM card revenue, increased 11.1%.
Service revenue from South Africa surpassed that of Nigeria, its largest market by revenue. South Africa's revenue experienced a marginal 3% growth, reaching 10.4 billion rand, while Nigeria witnessed a substantial decline of 52.8%, plummeting to 10.2 billion rand.
Key Takeaways
Amidst a challenging macroeconomic landscape, the first quarter of 2024 presented MTN Group with persistent hurdles, marked by elevated inflation levels and local currency devaluations across several of its markets. Furthermore, global geopolitical tensions exerted additional pressure on the telecommunications giant's performance. The ongoing civil conflict in Sudan emerged as a significant disruptor, severely hampering network availability and revenue generation within that region. Moreover, MTN faced operational setbacks due to subsea cable cuts, leading to disruptions and downtime in service delivery. This tumultuous environment underscored the vulnerability of MTN's operations to geopolitical instability, highlighting the inherent risks associated with its expansive market presence.
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