Data again leads MTN’s 22% revenue growth in Q1

Data again leads MTN’s 22% revenue growth in Q1
May 01
16:30 2022

MTN Nigeria Plc grew revenue from data services by 54.5 per cent year-on-year to over N163 billion in the first quarter operations ended March 2022. This is providing the earnings growth driver for the third year in a row, leading the way for the company’s 22 per cent growth in turnover to N471 billion in the quarter.

The interim financial report for the telecommunications company shows that revenue from voice services remains the dominant source of earnings but the contribution of earnings from data services has continued to grow rapidly.

The share of data revenue in MTN’s total revenue expanded remarkably from 27.4 per cent in the same period last year to 34.5 per cent at the end of the first quarter of 2022. This is a sustaining increase from below 19 per cent at the end of 2019 to 24.7 per cent in 2020 and further to 31 per cent at the end of the 2021 financial year.

The company looks quite good to maintain the high growth from start to finish this year with the key growth functions intact. Data services grew at about the same margin last year at 55 per cent and delivered over N516 billion in earnings at full year.


It, therefore, provided the strength for a 23 per cent growth in turnover to N1.65 trillion for MTN Nigeria in 2021. That is the fastest growth in revenue the company has seen in five years.

With the high revenue growth speed being maintained in the current year so far, the company appears confidently headed to the region of N2 trillion turnover at full year.

A sudden shift by people and businesses to data services is an aftermath of the coronavirus pandemic that changed the general communication pattern. A significant shift to virtual activities in the past two years is yet intensifying this year, as increased cost of diesel has led to substantial cuts in working hours in offices and business places.


Head and tail, telecommunications companies that enable virtual activities are winning on the revenue front. However, they are increasingly facing competition from internet-based services that are increasing snatching market share on voice-based services.

Earnings from airtime/subscription remain the dominant source of revenue for MTN but both growth margin and share of total revenue have continued to slim down. Revenue from voice services increased by 4.7 per cent year-on-year to N218 billion for the company in the first quarter, which is a slowdown from 7 per cent recorded in the preceding year.

The contribution of airtime/subscription to the total revenue of MTN Nigeria went down from over 54 per cent in the first quarter of 2021 to 46.4 per cent in the same period in 2022. The margin is equally down from the closing mark of about one-half for the 2021 full year operations.

Another major rising income line for the company is value-added services, which lifted earnings from the line a clear 46.4 per cent to nearly N21 billion in the first quarter. This is maintaining the impressive growth record of the preceding year when revenue from the income line jumped by 52 per cent to about N71 billion at full year.


Income from SMS is also holding up at an increase of 25 per cent to N13 billion in the first quarter after a top record growth of 276 percent last year. Income from interconnect and roaming rose by 16 percent to N45.6 billion over the same period, which is further up on the 26.7 per cent growth last year.

Revenue lines that went down last year have all recovered so far this year. An impressive growth of 35 per cent in revenue from digital services shows a major rebound from a drop of 51 per cent in 2021.

Likewise, revenue from handsets and accessories, which fell by 60 per cent last year, is looking quite healthy this year.

The company reinforced the strong growth in revenue with moderated cost behaviour that elevated profit delivery capacity. Its biggest cost line – direct network operating cost grew by 16 per cent to a little over N107 billion, which is a slowdown relative to the stronger growth in revenue. This has brought the expenditure line into cost saving alignment after it grew ahead of turnover last year.


Other major expenses equally moderated during the review period, which led to a 34.7 per cent rise in operating profit to over N179 billion for the first quarter. With a strong growth in finance income to N4.6 billion, net finance expenses also moderated at an increase of 18.6 per cent to N35.7 billion.

The cost savings powered net profit margin, which increased from 19.1 per cent in the same period last year and from 18 per cent in the 2021 full year to 20.6 per cent in the first quarter of the current year.


MTN Nigeria closed the first quarter trading in 2022 with an after tax profit of N96.8 billion, which is a year-on-year growth of 31.3 per cent. The strength for the growth is provided by strong growth in revenue and the gain in profit margin.



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