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African News Herald > Blog > Technology > MTN Nigeria grows data, fintech services amid forex losses and economic hurdles
Technology

MTN Nigeria grows data, fintech services amid forex losses and economic hurdles

ANH Team
Last updated: November 3, 2024 7:21 pm
ANH Team
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MTN Nigeria, one of the leading telecom giants in the country, recently released its Q3 2024 report, showcasing significant growth in data and fintech services. Despite the positive strides in these areas, the company faced notable financial challenges, reporting a substantial after-tax loss of ₦514.9 billion, primarily attributed to currency volatility in Nigeria’s economic landscape.

Key Takeaways from MTN Nigeria’s Q3 2024 Report:

1. MTN Nigeria’s service revenue experienced a 33.6% growth, driven by a remarkable 52.3% increase in data revenue.
2. Active data users increased by 5.1% to reach 45.3 million, reflecting the growing demand for digital services.
3. However, mobile money wallets saw a decline of 21.8%, highlighting challenges in the fintech sector.
4. Operational costs, including inflation and forex volatility, continue to impact MTN’s profitability.

Data Demand Grows Amid Subscriber Losses:

The surge in data revenue for MTN Nigeria can be attributed to the escalating demand for digital services such as streaming, social media, and remote work applications. Data traffic saw a significant increase of over 40%, with each active user consuming an average of 11.3GB per month. Despite these gains, the company’s subscriber base dropped to 77 million, influenced by regulatory requirements for NIN-linked SIM cards mandated by the NCC.

Fintech Growth and Operational Adjustments:

MTN’s fintech division witnessed an 18% revenue growth, driven partly by its mobile money service, MoMo. However, active mobile money wallets experienced a decline of 21.8%, prompting MTN to focus on quality over quantity in its user base. Operational adjustments, including streamlined agent networks, signify the company’s strategic shift towards sustainable growth in the fintech sector.

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Forex Impact and Cost Inflation Squeeze Profitability:

The depreciation of the naira significantly impacted MTN’s financials, with unrealized forex losses contributing to the after-tax loss. Operational expenses have risen, leading to a 5.3% year-over-year decrease in EBITDA. Inflation, high energy costs, and new taxes have added further strain, underscoring the challenges faced by Nigerian businesses in managing costs amidst economic volatility.

Outlook and Prospects Amidst Ongoing Volatility:

Looking ahead to Q4, MTN anticipates sustained data demand and investments in infrastructure to support growth. However, currency fluctuations and high operational costs pose ongoing challenges that could affect profitability recovery. The company’s ability to navigate forex exposure and retain subscribers in a regulatory-heavy environment will be crucial in the coming months.

In conclusion, MTN Nigeria’s Q3 2024 report highlights both the successes and challenges faced by the telecom giant in a dynamic economic environment. By addressing operational adjustments, managing forex exposure, and retaining subscribers, MTN aims to navigate the volatility and sustain its growth trajectory in the Nigerian market.

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TAGGED:dataEconomicFINTECHforexgrowshurdleslossesMTNNigeriaServices
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