MTN Ghana profits surge to GH¢ 1.4 billion

MTN Ghana profit after tax surged to 38.4% on the back of huge demand for its data services in 2020 as a result of the global COVID-19 pandemic.

The company recorded an increase in its profitability from GH¢ 1billion in 2019 to GHC 1.4billion at the end of 2020 on account of COVID-19 restrictions to prevent the spread of the virus.

Many businesses, private and government institution resorted to online transactions when the biting effects of the pandemic hit hard and there were restrictions of movement of people across the world.

MTN Ghana subsequently cashed in on this with a 105 per cent increase in data within the period.

Service revenue went up by 16.4% to GH¢5,9billion as subscribers also increased by 23.4% to 24.4 million to firm their grip on the largest share of users in Ghana.

Active data subscribers soared by 32.4% to 10.8 million, just as active Mobile Money (MoMo) users rose by 16.3% to 10.6 million.

The firms paid over GH¢1 billion in taxes to the government.

“We will remain within our service revenue growth target band of 13% to 15% and employ prudent cost strategies to continue to improve our margins and further ensure growth in our bottom line,” MTN Ghana stated in its audited reports for the year ended December 31, 2020.

Capital expenditure (Capex)

MTN’s capital investments accelerated in the fourth quarter of 2020.

To help maintain the quality and availability of service for data and Mobile Money customers, they invested GH¢1,5billion in network capacity and infrastructure expansion.

“Our efforts helped grow our 4G population coverage to 71.7% and improve our rural telephony project,” the firm explained.

As part of this, they rolled out 200 2G, 200 3G and 950 LTE sites, which helped relieve the pressure on infrastructure and service delivery across the nation.

The CAPEX deployment helped to reach 1,875 total 4G sites nationwide with hopes to have 4G technology on every site in the coming years.

“MTN Ghana will continue to prioritize its investments in infrastructure expansion to meet the needs of Ghanaians in this era of accelerated digitalisation,” the firm stated.

Significant market power

On June 8, 2020, The National Communication Authority (NCA) declared MTN Ghana as a Significant Market Power (SMP), a status that attracted regulatory restrictions.

In a statement issued on Friday, June 26, 2020, MTN Ghana stated that restrictions could inhibit the company’s growth and innovativeness.

They, therefore, sought redress at the Supreme Court.

However, on October 13, 2020, MTN Ghana withdrew its application following a series of engagements with the regulator and other key stakeholders to resolve the issue amicably.

MTN Ghana said it implemented the National Communication Authority’s directive to apply a 30% asymmetrical interconnect rate for two years.

They are optimistic of a positive outcome for MTN Ghana and the long-term sustainability of the industry.

Localisation of Scancom PLC and Mobile Money Limited

MTN Group said it remains committed to its agreement with the government to sell down a further 12.5% of its investment in Scancom PLC, focusing on local shareholding.

This will increase to 25% other shareholdings in Scancom PLC.

Per the Payment Systems and Services Act, 2019 (Act 987), MobileMoney Limited, a wholly-owned subsidiary of Scancom PLC, is required to localise 30% of its shareholding as part of Bank of Ghana’s (BoG) licence requirements. The BoG has extended the deadline to meet this requirement to 15 January 2022.

Plans for 2021

MTN Ghana said it would remain within its service revenue growth target band of 13% to 15% and employ prudent cost strategies to continue to improve its margins and further ensure growth.

“MTN Ghana will continue to prioritize its investments in infrastructure expansion to meet the needs of Ghanaians in this era of accelerated digitalisation. Continued growth in service revenue will largely depend on data, mobile financial services and digital.

“We have therefore designated 2021 as ‘Year of the customer: the digital experience’.

Donations and charity

The Group performs its corporate social responsibility via the MTN Foundation.

MTN’s global policy is to set aside 1% of its profit after tax to fund the foundation’s activities.

The foundation has invested over GH¢55 million to improve health care, education and living conditions for over 4 million people with 152 projects across the entire country, the firm indicated.

In the area of education, the foundation has provided scholarships to over 1,500 needy and brilliant students in Ghana.

During the year, an amount of GH¢14.3 million (2019: GH¢9.8 million) was charged to the statement of comprehensive income.