MTN prepares for virus hit with cost focus - Mobile World Live

MTN prepares for virus hit with cost focus

14 MAY 2020

MTN Group implemented cost control measures across its operations in preparation for an expected economic hit from the Covid-19 (coronavirus) pandemic, as it announced growth in subscribers and revenue for Q1.

During its financial update, the company said in addition to work already implemented to strengthen its operational and financial position, it would restrict costs to “mission critical expenses” and introduce “enhanced oversight of expenditure”.

Cutting outgoings are one of a number of initiatives undertaken by the company in response to the pandemic.

Policies introduced in Q1 include providing employee health equipment, charitable donations, reducing fees for certain mobile money transactions, offering free text messages, and zero-rating some educational and health websites.

The company is also undertaking a wider realignment of its assets in an attempt to “simplify” its portfolio, reduce risks and improve returns over the medium term.

Outgoing CEO Rob Shuter (pictured) said the pandemic would “undoubtedly have an affect” on the rest of the year, though this was still difficult to quantify.

Increased risks flagged include exchange rate volatility, hampered economic growth and limited capital flows in its markets.

Home declines
During Q1 the operator group reported year-on-year increases in revenue, mobile money customers and data service subscribers across its business.

Group service revenue increased 16.5 per cent to ZAR38.7 billion ($2.1 billion) on improvements in Nigeria and Ghana, though declines in its wholesale business in South Africa blunted overall progress. Stripping out the impact of positive currency movements, revenue increased 11 per cent year-on-year.

In South Africa, service revenue declined 6.2 per cent to ZAR8.5 billion. This was offset by growth in Nigeria, up 28 per cent to ZAR13.8 billion, though this also included a sizable bump from positive foreign exchange movements.

Service revenue omits payments for devices and SIM cards. Full revenue and profit figures are not reported in its Q1, though MTN noted EBITDA was up 15.6 per cent.

Across its operation, the active mobile money base increased by 400,000 to 35.1 million by end-March.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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