MTN makes GH¢6.3m daily; ponders ceding 35% stake to locals

Mobile network operator MTN Ghana posted a strong revenue performance last year, raking in about GH¢2.32billion in a year many businesses in the country reeled under a challenging macroeconomic environment exacerbated by the erratic energy supply situation, affirming the company as the most profitable telephony operator in the country.

This means that MTN last year generated about GH¢6.34million in revenue every single day and is looking to up its revenue performance as while preparing to launch its entry into the LTE (4G) arena by middle of the year.

The revenue performance of MTN represents a 15.9 percent increase over the 2014 figure of GH¢1.99billion and was supported strongly by its data services, which contributed 30.6 percent to the company’s total revenue.

Out of the revenue it made in 2015, MTN paid GH¢675.6million as taxes to government, which is GH¢70.6million more than it did in 2014, and represents about 70 percent of the total tax collected by the Ghana Revenue Authority from the telecom sector.

According to the financial figures of MTN as seen by the B&FT, the Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) -- which indicates how much profit the company makes with its current assets -- increased by 24.4 percent to GH¢938.3million, which is equivalent to 3.197 million South African rand at an exchange rate of one rand to GH¢0.2935.

The EBITDA margin, which tells the company’s core or operating profitability, increased 3.1 percentage points to 40.5% despite an increase in US dollar-denominated expenses associated with a sharp depreciation of the cedi against the US dollar.

According to MTN’s hierarchy, the increase in the EBITDA margin -- which was also impacted negatively by weak macro-economic conditions and increased competition -- was mainly due to well-maintained costs and no management fees paid to the MTN Group in the year.

The performance of MTN has revived calls for the South African-controlled telephony operator to allow Ghanaians a share in its fortunes by listing on the Ghana Stock Exchange, a move many consider the needed catalyst to increase liquidity on the local bourse.

MTN Ghana CEO, Ebenezer Twum Asante, who has not yet ruled out the possibility of listing on the stock exchange, explained in Accra on Thursday that the company will soon decide on the appropriate channel to allow Ghanaians to share in its ownership, since acquisition of the LTE licence in December last year requires the company to have at least 35 percent local ownership.

“The 4G licence comes with a localisation condition, and we are looking at various options to localise about 35 percent of our business in Ghana – and the stock market will be one of the options. But is it going to be the most favoured option looking at the time we have to do the listing? I don’t know. But as and when we are ready with the full details, we will share how we will go about the localisation condition,” he said.

MTN, currently the biggest mobile network operator in Ghana, controls 46 percent of the mobile phone subscriber market -- with total voice subscriptions totalling a little above 16.25million as at the end of December last year.

In 2015, the company increased its voice subscriptions by 17.3 percent on the back of what the management considers to be “attractive voice and data offers aimed at subscriber acquisition and churn management”.

The company’s performance in the data market was also encouraging with 8.634 million subscriptions, which makes up 47.8 percent of the entire data market share. Revenue from the company’s data services, according to Mr.Twum Asante, increased by 85.2 percent last year, which is an exciting outcome for the company as the data segment has long considered the next frontier of profitability for telecom companies across the globe.