MTN weighs up exposure to China’s ZTE

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MTN weighs up exposure to China’s ZTE

Published Date: 2018-05-04 | Source: Stephen Gunnion | Author: Stephen Gunnion

MTN weighs up exposure to China’s ZTE

The mobile operator says it's assessing both the impact and contingent planning given its exposure to ZTE in its networks

MTN says it's assessing the impact of its exposure to Chinese telecom equipment maker ZTE in its networks. Releasing a first-quarter update yesterday, group president and CEO Rob Shuter said following last month's "denial of export privileges" order issued by the US Department of Commerce, it was considering contingency plans.

MTN recently partnered with ZTE to accelerate the commercialisation of 5G wireless technology in Africa and the Middle East. However, the Chinese company has been under investigation by the US for breaking laws on exports to Iran. Last March, ZTE agreed to fines of $1.19 billion to settle charges that it violated US sanctions on Iran and North Korea. The denial order follows the recent rise in trade tension between the US and China.

Meanwhile, MTN reported a 1.9% rise in subscriptions to 221 million in the three months to end-March, with net additions of 4.1 million. However, they were down 6.6% from a year ago as it changed the way it calculates the numbers. While voice revenue rose by a muted 5.4%, service revenue increased by 9.1% and data revenue surged almost 27%. MTN Nigeria reported a 14% rise in service revenue, with its EBITDA margin increasing by 340 basis points to 41.8%. Service revenue at MTN Irancell increased by 15%.

MTN said digital service revenue remained a material opportunity, led by MTN Mobile Money and rich-media services. Mobile Money revenue increased by 52.4% year-on-year as it added 3.9% more customers from the previous quarter. About 22.7 million customers are now active users of MTN Mobile Money.

"During the quarter, the group continued to focus on operational execution across our markets, leveraging off the strong network investment of the past few years," group president and CEO Rob Shuter said in a statement. " This allowed us to deliver an acceleration in service revenue growth to 9.1%, led by MTN Nigeria and MTN Ghana.

MTN said it aimed to list on the Nigerian and Ghanaian stock exchanges this year. Ahead of that, it will release full financial results for MTN Nigeria on Monday. It's already received all regulatory approvals for its IPO in Ghana, which it expects to launch later this month.

In Cameroon, MTN said it was well advanced in agreeing on the terms of its licence amendments and expects to sign the revised licence this month.

Its shares closed 1.1% higher at R127.47.



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