MTN posts first lost in 8 years

MTN Group, Africa's largest telecommunications company, has reported its first loss in 8 years, facing challenges due to macroeconomic shocks in Nigeria and ongoing conflicts in Sudan. In a recent interview with CNBC Africa, CEO Ralph Mupita discussed the company's performance and the impact of these challenges on its earnings. Despite the setbacks, Mupita highlighted the strong growth in data services and fintech, with a 21% increase in service revenue and a 27% growth in fintech. This growth indicates the potential for future value creation and sustained investment in the company's core areas. The CEO expressed optimism about the outlook, citing global macroeconomic developments that could help mitigate the current headwinds in the region. He mentioned that the sharp devaluation of the Naira and the conflict in Sudan have affected earnings, but the underlying growth in service revenue remains strong. Regarding Nigeria, Mupita addressed concerns about the country's economic stability and the challenges faced by telecom companies. He mentioned that inflation is expected to moderate, providing some relief to consumers and businesses. He also discussed the stability of the Naira in recent months and the importance of tariff adjustments to offset rising network operating costs. Despite the uncertainty, Mupita emphasized the need for sustained investment in the ICT sector to support long-term growth in Nigeria's economy. In response to questions about cost containment and challenges in South Africa, Mupita highlighted the company's efforts to achieve expense efficiencies and maintain service revenue growth. He acknowledged the competitive pressure in the South African market, particularly in consumer prepaid services and device strategies. On the topic of future investments, Mupita confirmed the company's commitment to maintaining its capital expenditure envelope and expanding network coverage, with a focus on 4G and selective 5G investments. He also discussed MTN's progress in fintech services, citing a partnership with Mastercard and the potential for growth across seven markets. Additionally, Mupita addressed the need for regulatory modernization in the African telecommunications sector, emphasizing the importance of harmonization in licensing for Spectrum and market consolidation. He advocated for policies that support the growth of digital economies and enable innovation in the industry. Despite the challenges, MTN's share price showed resilience in the market, reflecting investor confidence in the company's long-term strategy and growth potential.