MTC grows revenue despite challenges
Mobile telecommunications giant, MTC increased total revenue by 3.2% to N$ 1,454.7 million in the financial year ended 30 September 2011 despite a drop in mobile termination rates which put pressure on voice call revenues, a financial mainstay of the company.
Total revenue increased to N$1,454.7 million from N$1,409 million the previous year spurred by growth in SMS and Data usage. Message usage increased by 24% during the reviewed 12 months, where the average MTC customer sent more than 400 messages per month while Data usage doubled.
More than 80,000 customers accessed the Internet through a PC or tablets and over 470,000 via their mobile phones, giving MTC close to 550,000 users accessing Mobile Internet from various platforms.
Presenting the company’s financial results early this week, MD Miguel Geraldes said despite showing signs of real maturity in the voice business, voice usage still increased substantially as a result of the drop in price per minutes in a competitive environment. The drop in prices however led to revenues slightly dropping by 1%.
Geraldes said penetration in Namibia, during the period under review, has now passed 108% consisting of 1,854,700 active MTC customers and an additional 435,000 for the other mobile operators. “The penetration rate of over 108%, according to our estimates, points to the fact that our subscribers regularly use multiple SIM cards or because they use more than one cellphone (private and business) or use it on different platforms; i.e. cellphone, laptop and tablets. This ultimately generates multiple usages of our services, which are very important,” he said.
But despite the increase in revenue, MTC’s EBITDA (Earnings before interest, taxes, depreciation and amortisation) margin decreased from 55.8% to 53.2% as a result of an increase in direct cost and direct network operating cost which was led by higher rental cost of leased lines and network repair and maintenance costs to support the network expansion, as well as the increase in traffic volumes.
The cost of leased lines increased by 24.8% and the repair and maintenance of the network by 32.7%. The unfavourable foreign exchange movement for the Namibia Dollar impacted EBITDA negatively as well.
Capital expenditure slowed down compared to the previous financial year, but still encompassed a substantial amount of net income after tax. The amount invested for the financial year under review amounted to N$ 236.6 million, and 74% of profit after tax.