MTN Rwanda’s service revenue improved 19.9% in 2022

MTN Rwanda, a leading telecom company in the region, has reported a significant increase in service revenue for the year 2022. The company's CFO, Mark Nkurunziza, shared in an interview with CNBC Africa's Julius Bizimungu that MTN Rwanda's service revenue surged by 19.9 per cent to Rwf 221.7 billion. This growth was primarily driven by the expansion in voice, data, and mobile money services. Despite the impressive revenue performance, the company's net earnings experienced a decline of 12.8 per cent during the same period. Mark Nkurunziza expressed satisfaction with the revenue growth, stating that the company exceeded its projections by over five per cent. He highlighted that the subscriber base grew by 6.3 per cent year on year, contributing significantly to the revenue performance. The CFO attributed the revenue growth to substantial increases in mobile money, data, and voice services. Mobile money emerged as the primary driver of revenue growth, with a remarkable 48 per cent year-on-year increase. Nkurunziza noted that the growth in mobile money transactions was fueled by the population's embrace of financial inclusion, particularly following the COVID-19 pandemic. Additionally, the company witnessed impressive growth in data revenue, which grew by 15 per cent, and voice revenue, which saw a four per cent increase. The growth in data business was attributed to MTN Rwanda's aggressive efforts to connect more people to the internet, both through mobile and fixed internet services. The company focused on expanding its 4G network and increasing smartphone penetration in the country. Collaborations with stakeholders and government entities, such as the Ministry of ICT, were key factors in driving data revenue growth. Moreover, MTN Rwanda introduced a unique initiative called 'Matcha Matcha,' allowing subscribers to obtain smartphones and pay for them over time. The partnership with a leading bank resulted in high demand and increased uptake of smartphones among the population, positively impacting data revenue. Despite the robust revenue growth, MTN Rwanda experienced a decline in net earnings, which Nkurunziza attributed to the costs associated with the license renewal. The company incurred significant expenses, amounting to $91 million, for the license renewal, impacting the net profit. This decline in net earnings led to questions about the company's decision to pay 50 per cent of its distributable net income as dividends. In response, Nkurunziza emphasized the importance of adhering to the company's dividend policy to meet shareholders' expectations. He acknowledged the dynamic nature of the business environment and the need to balance shareholder dividends with preserving cash for future investments and technology advancements. Looking ahead, MTN Rwanda plans to amortize the license renewal costs over the next nine years and remains focused on driving profitability through revenue maximization and cost efficiency. The company aims to sustain positive results and profitability in the coming years by expanding its subscriber base, enhancing service offerings, and closely monitoring market dynamics.