On Monday, shares in the MTN group shot up by almost a tenth.
MTN Nigeria, which accounts for a third of the company’s revenue, announced on Monday that mobile money service customers increased by 102 % to 9.4 million, with 4.8 million new subscribers added for the entire year ending in December 2021.
This expansion, according to MTN Nigeria CEO Karl Toriola, “provides a solid framework on which to launch the MoMo payment service bank (PSB), for which we have got preliminary clearance.”
The stock market reacted positively to the news, with MTN shares rising 10.2 % to R192.12, giving it a market capitalization of R345 billion.
All of this comes after MTN Nigeria lost more than a tenth of its subscriber base last year as a result of new restrictions and a moratorium on new SIM cards, signaling the interest of investors in new sectors of business such as fintech.
MTN Nigeria, the company’s most profitable arm, claims that its mobile subscriber count declined by more than double digits, or 8 million, in 2021, due to governmental limits on new SIM activations.
MTN Nigeria stated that mobile subscriptions decreased 10.6% to 68.5 million in the year to end-December, however, there was modest improvement in activity among current users, with service revenue up 23.3 % to N1.65 trillion (R61bn).
According to Roy Mutooni, an analyst at Absa Asset Management, investors were not concerned about the loss of customers because it was already known that new SIM registration restrictions would result in a drop in subscribers.
The Nigerian Communications Commission halted the sale and activation of new SIM cards in December 2020, ordering operators to update registration records with national identity numbers for each SIM in the country.
In April 2021 however, the ban on new SIM activations was lifted.
MTN Nigeria stated it added about 1 million new subscribers in the fourth quarter of 2021, bringing the total number of active data subscribers to 34.3 million.
Apart from being enthusiastic about MTN’s mobile money operation, Mutooni praised the Nigerian company for “growing earnings fast despite not signing up new users.”
“In addition, the upgrade to service revenue growth of over 20% for the medium term was a huge plus.”
MTN has pushed for more data usage and has invested considerably in its infrastructure, hastening the installation of its 4G network, which currently reaches 70% of Nigeria’s population.
Data revenue increased by 55.3 percent in 2021, growing even further in the fourth quarter as coverage improved, and overall smartphone penetration in the country increased.
MTN also announced in December that it had purchased a 5G license in Nigeria, allegedly for R4.4 billion. “Future network performance will be based on the foundation of 5G,” Toriola stated.
“Being at the forefront of bringing technical breakthroughs to as many Nigerians as possible is an exciting opportunity,” he remarked.
According to MTN Nigeria, digital adoption is continuing to grow as customers use more digital products and services, a trend enhanced by Covid-19.
Digital revenue increased by 61.2 %, while active users on Ayoba, the company’s instant messaging network, increased by 172.9 % to 3.8 million.