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MTC Reports Jump In Profit On Strong Demand For Services

By:Hertha Ekandjo
Mobile Telecommunications Company (MTC) has reported a profit after tax of N$793.04 million for the year ended 30 September 2022, compared to N$743.3 generated in 2021.
This shows that the company’s profit went up by 6.7%.
The company’s annual report for the just-ended September 2022 financial year reflects a total income of more than N$2.9 billion for the 12 months under review.
The total income increased by 3.7%, relative to the 3% to 6% strategic targets for 2022, and was driven by the increase in demand for data, growth in prepaid products, and continued expansion of enterprise services.
“Existing revenue streams grew by 2.4%, within the strategic target range of 3% to 6%, despite a slowdown in consumer spending during the second half of the financial year,” MTC noted.
This was primarily driven by the growth in customer numbers and revenue from prepaid customers, also the demand for MTC’s popular Multiple ‘Aweh’ products, a shift by postpaid customers away from long-term contracts to more affordable prepaid offerings, and sustained growth in digital streaming.
Content services growth in prepaid revenue offset the ongoing decline in postpaid revenue as many customers struggled to maintain service contracts in a rising cost environment.
The annual report demonstrated that MTC focused on retaining postpaid customers with value-adding capped data packages or Taamba Advance data bundles.
MTC’s blended average revenue per user (ARPU) (including handset revenue) grew by 4.4% to N$96.4″.
When it comes to roaming revenue, it had increased from a low base as Covid-19 restrictions were lifted, and handset revenue was impacted by migration from legacy postpaid packages to phone financing.
“New revenue streams grew by 106.6%, relative to the 150% strategic target. MTC’s new fixed-line service offerings maintained steady growth momentum in response to MTC’s focused drive to capture market share, contributing 1.8% to total income and generating ARPU of N$1 203 monthly,” the report mentioned.
The company’s revenue from fibre to homes grew by 134%, driven by work-from-home and home entertainment trends, and revenue from cloud-based services to businesses increased by 816%.
These were offset by a more modest growth of 27% in fibre to businesses and the delay in implementing mobile financial services.
Looking back to 2020 the company’s profit declined by N$24.6 million, seeing that the company made a profit of N$797.0 million in 2019 compared to N$772.4 million in 2020.
Despite steady increases in the prices of goods and services, MTC says that it has achieved satisfactory growth in revenue from its traditional operations, as increased revenue from prepaid services more than compensated for lower postpaid revenue.
According to the company, the drive to increase MTC’s share of the home and office fibre markets contributed to growth in new revenue streams and partially offset the delayed implementation of mobile financial services.
Profitability backed by cost control earnings before interest, tax, depreciation, and amortisation increased by 3.2% to N$1,481 million. EBITDA was impacted by several factors, mainly revenue growth and cost containment.
MTC reallocated and reduced operational costs to achieve the financial targets communicated to the market, prioritising cost-efficient investment in network expansion and market growth, without compromising customer service quality.
MTC also indicated that it has achieved its cost optimisation strategic targets.
The 4.6% increase in operating expenses (2021: 6.9% increase) was largely attributable to personnel costs, which increased by 6.9% due to the filling of vacancies and inflation-related increases in 2021 for 2022.
The company’s sales and marketing costs show an increase of 2.4% to fund promotions that drive MTC’s brand visibility, including the promotion of value-added offerings.
Direct costs increased by 3.1% as a result of currency fluctuation and new network technology rollouts.
MTC’s digital transformation, including the automation and integration of core operations and business support and customer management systems, improved cost efficiency.
MTC`s managing director Licky Erastus said: “MTC had to strategically continue to explore smart partnerships to fulfil their innovation and sustainability value as promised to the country, because their greatest commitment is to create sustainable value for all their stakeholders, through innovative digital solutions at a high-performance culture.”
Meanwhile, the chairperson for the board of directors Theo Mberirua said the company suffered a great challenge in the past three years with the increase in fuel and food prices.
MTC had an increase of 18% on its 4G coverage network, which is an increase from 46% to 66% from the previous year, as some customers noted that the network was faster and better with the use of 4G.
“The transition from just being a mobile operator to what we now call a digital service provider has become a necessity because MTC is now able to provide network coverage to remote areas where MTC wasn’t able to provide network coverage this was made possible through their implementation of OAID1,”Mberirua said.

Hertha Ekandjo

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