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Telecom Companies Make Huge Profits Amidst Challenging Times

Telecommunications companies have reported that their operations over the last six months have been affected by what they call a difficult macroeconomic environment, characterized by the skyrocketing cost of living and foreign exchange rate.

According to the Uganda Bureau of Statistics, the inflation rate rode for the eight consecutive month at the end of July, going to 7.9 percent for the ended July 2022, from 6.8 percent in the period ended June 2022. This is the highest rate recorded since December 2015.

This has largely been influenced by higher fuel prices, rising domestic food crop due to dry weather conditions across the country, as well as persistent production and supply chain challenges.

“The combination of these factors has had a significant impact in the spending power of our customers in the period under review,” said the outgoing MTN Uganda Chief Executive Officer, Wim Vanhelleputte adding that this affected the demand for services and maintenance of the products they were running.

Despite this however, MTN’s profit after tax grew by almost half to 193.6 billion shillings, enabling it to declare an interim dividend of 5 shillings per share. If approved by the shareholders, 111 billion shillings in total will be paid out to the shareholders.

As the COVID-19 pandemic effects lagged on longer than expected, the service providers sought strategies the would ensure they maintained their customers, without heavily impacting their revenues.

MTN’s Ambition 2025 is group-wide strategy, which involves funding its network expansion and improvement, accelerated through selective partnerships and taking advantage of the “MTN brand” as the most trusted and valued in Africa. It is supported and funded through enhanced cost and capital expenditure efficiencies.

MTN Group is considering consolidating its infrastructure assets and platforms such as financial technology, fibre and data centres, among others, to build value and attract third-party capital and partnerships into these businesses over the medium-term across the 14 subsidiaries.

“Our investment and continued execution of our commercial strategy has enabled us to increase MTN Uganda subscriber base by almost 9 percent to 16.3 million, while our active data subscriber base grew by 21.8% to 5.7 million,” the CEO said.

MTN says it will continue partnering with financial technology companies to reach out to people who cannot afford the traditional financial system, to access services like micro insurance, online savings and others.

Airtel Africa on its part, has no aggregated figures for individual subsidiaries but says total revenues by 13 percent 1.2 billion dollars, due to a strong performance in the voice, data and mobile money segments. The business operations in East Arica posted the highest growth rates of 28 percent, according to Airtel Africa Segun Ogunsanya.

Airtel Uganda Marketing Manager Henry Njoroge says they are constantly looking for innovations that make their services more affordable so that their customers stay connected.

“In addition, we are bringing 88% more data to our customers who purchase daily 24hour validity bundles. We recognize that most of our people earn a daily income. We are intentional in ensuring that this group of our customers are supported with affordable data to make their business communication. This is the glue that binds Uganda’s small and micro enterprises,” he says.

Within our platforms, we grew Finfech subscribers by 14.1% to 9.8 million as we execute on our sealed objective to deepen Financial inclusion.

In line with our strategic priority to also accelerate advanced services in Fintech, MTN Uganda has partnered with Jumo to offer micro loans on mobile money through our MoSente product. This is in addition to the MoKash savings and micro lending product and the MoMo Advanced which offers overdraft services, both in partnership with NCBA Bank.


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