Banks owe MTN N40 billion for electronic revenue climbs by 101 Percent

MTN Nigeria has stated that banks are indebted to it to the song of N40.3 billion as of the end of quarter 2021 on the account of unstructured supplementary service data (USSD).MTN informed that its digital revenue grew by 101 per cent and fintech earnings by 28.5 per cent as clients continued to adopt more digital services and products, a trend accelerated by the COVID-19 pandemic. The firm, in its Q1 financial report, said the business continued its recovery from the consequences of the COVID-19 lockdown as the market improved.It, however, said service earnings for the enterprise was largely flat year-on-year (YoY) mostly on account of the non-recognition of USSD revenue in Q1. The telecommunications company said normalised growth (excluding USSD revenue) was 2.6 percent, adding that”we continue to engage with the Nigerian Communications Commission (NCC), Central Bank of Nigeria (CBN) and the deposit money banks (DMBs) to complete that the operational modalities for the new pricing framework that’s been agreed upon for USSD services.”The mechanism for and timing of this recovery of those industry-wide outstanding debts which exist for USSD services given to the DMBs form element of the procedure. As of the end of Q1, N40.3 billion was due to MTN Nigeria. MTN said expenses rose by 14.8 percent, mainly driven by a 19.2 percent increase in operating expenses arising out of a hastened site rollout and also the effects of Naira depreciation on lease rental costs.It pointed out that the overall increase in expenses was partially mitigated by the comparatively moderate growth of 7.8 per cent in the expense of sales after the suspension of fresh SIM earnings and activations. Because of this, MTN stated its EBITDA rose by 19.1 percent, supported by revenue growth, with the EBITDA margin expanding by 0.9 pp to 53.1 per cent. Moving forward, the Chief Executive Officer,

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MTN Nigeria, Karl Toriola, stated that the firm’s 2021 priorities remain unchanged, with a clear focus on sustaining double-digit earnings growth, forcing 4G network expansion and positioning our fintech business for rapid growth to unlock its full value. Toriola explained the purchase of an additional 800MHz spectrum places us to provide enhanced service rates to Nigerians in service of their Government’s broadband initiative.”We shall continue to sustain our expense efficiency programme to reinforce our financial standing and support margins. We remain in dialogue with all the DMBs on a pricing alternative for airtime sales commission whilst diversifying our airtime recharge channels to provide our readers more options to purchase airtime and keep connected.”We will pursue deeper and stronger stakeholder relationships and improved shared value throughout our stakeholder ecosystem whilst ensuring that our actions align with the Government’s development agenda. MTN said after the commencement of SIM sales and activations, the initial run-rate of developments could be slower than usual as a result of new procedure requirements, system limitations and reduction of capable places such as SIM registration. The company said while this may impact the speed of developments in the brief term,”we’re optimistic that the current processes underway will entrench a more robust and sustainable enrollment procedure as we reaccelerate subscriber growth over the medium term.”As the economy continues its steady recovery in the effects of the COVID-19 outbreak which affected the company in 2020, we expect that the base effects will partially influence our industrial and financial trends in the rest of the year. Although access to foreign exchange remains a constraint, we strive to minimise its influence on small business. Ultimately, we will continue to handle and spend in the resilience of the enterprise and networks as we monitor the longer-term economic potential consequences of this pandemic.”

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