MTN Mobile Money grows by 45 % in 2017


Bart Hofker, MTN CEO, during an interview in October. File.

MTN Rwanda is confident on surpassing revenues of Rwf90 billion in 2017 this year up from about Rwf77 billion last year, the firm’s chief executive Bart Hofker has said.

The revenues stem from the firm’s main business lines data, voice calls and Mobile Money service.

Mobile Money as a revenue stream raked in the most after growing at 45 per cent year-on-year, while data and voice both had over 30 per cent contribution.

To maintain the growth over the coming years, the firm has also invested in transforming their network, incurring about $18 million this year.

In 2018, the firm has set aside $20 million for further upgrade and transformation of network which will see MTN improve the user experience in terms of speed and quality.

Mohamad Kiwan, the chief technology and information officer of the firm, explained that the investment was a priority.

“MTN decided to take the extra step in network transformation to move it to the next level in terms of experience, capacity and services. We are also doing that because we also want to go along with the country’s vision of ensuring increased access and coverage,” Kiwan explained.  

The network transformation process, which commenced around May this year, will among other things involve uptake of newer technology, decentralising network switches, and ensuring 3G coverage across the country.

 Diatile Lily Zondo, the firm’s chief financial officer, said that the network transformation process is going to drive up their operating costs but is necessary in the development phase.

She, however, noted that, on completion, the transformation would guarantee efficiency and was likely to pull down operating costs and raise revenue receipts.

At the moment, the largest operating costs for the firm are technology related in aspects such as rentals for transmission hubs.

Revenue wise, Zondo said that they expected continued growth of mobile money as a source of revenue.

With the increased adoption and emphasis of cash-less economy, mobile money payments could continue to rise in the coming year.

According to statistics from the central bank, between June 2016 and June 2017, there were about 8.6 million mobile money transactions with a value of Rwf 622 billion.

This is set to go up in the coming year.

One of the latest products by the telecom, Mokash, launched in partnership with CBA bank, is also fast gaining popularity and currently has over 620,000 subscribers.

Arthur Rutagengwa, head of Mobile Money at the firm, said they expect the subscription to double in the near future as it gains popularity in rural areas.

The product is largely popular in urban and semi-urban areas.

Latest Rwanda Utilities Regulatory Authority (RURA) Active Mobile Telephone Subscriptions report for October showed that there is only one percentage point difference between MTN and their closest competitors Tigo Rwanda in terms of market share.

This has led most to believe that the firm is fast losing its dominant market share despite its advantage of entering the market first.

Hofker, however, downplayed the concerns noting that there has not been a drop in their revenue despite the changes.

The revenue projections were posted at a time when most would have expected a slowdown in performance following a $8.5 million fine by Rwanda Utilities Regulatory Authority.

The firm said that the fine would be cleared by the end of the year and was funded by not paying dividends in the last shareholder meeting.

MTN Rwanda shares are being traded on the local bourse by Rwanda Stock Exchange, through Crystal Telecom, after the latter floated its 20% equity in the telco.