MTN Group CEO discusses drivers behind strong earnings, future plans

MTN Group, a telecommunications giant, has reported impressive earnings in the face of revenue pressure, with data and Fintech services driving growth in key markets. In a recent interview with CNBC Africa, Ralph Mupita, the CEO of MTN Group, broke down the company's earnings and future plans. Mupita highlighted the company's focus on constant currency growth, which surpassed guidance at 18.3%, despite reported service revenue being only 1%. The company achieved a remarkable 32% increase in headline earnings and a 35% growth in operating cash flow, demonstrating strong performance in a challenging macroeconomic environment. Data services saw a 35% growth, with Nigeria leading the way in data usage, reaching 50% smartphone penetration. Fintech services also thrived, with Ghana showing solid growth and 10 billion transactions worth $239 billion. South Africa, often overlooked, delivered a standout performance with a 6.5% increase in service revenue. Mupita emphasized the need for spectrum auction in South Africa, calling it a seminal moment after 18 years, with a potential to accelerate digital advancement and lower data prices for consumers. He underscored the importance of structural reforms to drive growth, including energy reform to address grid instability. Mupita elaborated on MTN's asset realization strategy to simplify the business, reduce risk, and enhance returns. The company aims to focus on the African continent, exit the Middle East, and fortify its balance sheet to pursue growth opportunities. The CEO outlined MTN's transformation towards a platform business model focusing on connectivity, Fintech, and Infoco to align with the ecosystem changes shaping businesses today. With the ambition 2025 plan, MTN eyes further consolidation in the African mobile market to achieve scale and drive digital inclusion. Mupita shared expectations for key markets like Nigeria and Ghana, forecasting continued growth in subscribers, service revenue, and margins. He stressed the urgency of implementing structural reforms in South Africa to unlock its growth potential, highlighting the significance of high spectrum auction and energy reforms. Regarding market consolidation, Mupita advocated for a strategic approach to achieve optimal investments and network reliability, pointing to the need for requisite returns to drive future growth. As MTN navigates the dynamic telecommunications landscape, the company remains committed to driving innovation, expanding service offerings, and leveraging digital opportunities to deliver value to customers and shareholders.