MTN Rwanda has reported a solid start to the financial year, with net profit rising by 228.5 per cent year-on-year to Rwf1.6 billion in the first quarter of 2025. This is a strong turnaround from a significant Rwf1.2 billion loss the telecommunication company had posted in the first quarter of 2024. However, it is a decline compared to the fourth quarter of last year when the firm had posted the highest quarterly profit in five quarters. The latest performance was underpinned by a decent performance in earnings before interest, tax, depreciation, and amortization (EBITDA), particularly lower depreciation costs. MTN saw its EBITDA - key performance metric for capital intensive sectors like telecommunications- increase by 9.3 per cent to Rwf26.5 billion. This was driven by growth in revenue. Total revenue improved by 12.4 per cent to Rwf67.9 billion, driven mostly by data and fintech revenue. Data revenue soared by 12.2 per cent year-on-year to Rwf11.7 billion, despite data subscribers falling 8.2 per cent to 2.3 million. Fintech revenue (MoMo) grew by 28 per cent year-on-year, reaching Rwf32.9 billion, as mobile money usage continues to deepen across Rwanda. MoMo users grew 2.5 per cent to 5.3 million. Voice revenue down MTN’s voice revenue, while still contributing significantly, declined by 6.4 per cent year-on-year to Rwf15.8 billion. Its EBITDA margin, which measures how well the firm is able to turn every franc into profit, fell 1.2 percentage points to 38.9 per cent. “We are encouraged by the recovery of our business during Q1, despite the continued aggressive competitive dynamics in the market,” Monzer Ali, MTN Rwanda’s new CEO said in a statement. The competitive market dynamics have forced MTN to experience consecutive quarters of losses, especially due to the change of rules in mobile termination rate (MTR). MTRs are fees telecom operators pay each other when calls terminate across networks. In August 2023, Rwanda Utilities and Regulatory Authority (RURA) set MTRs to zero for a one-year trial period, meaning no operator paid termination fees to another. This was meant to level the playing field since this tends to favor small players to offer cheaper off-net calls without incurring charges. This is not the first time the regulator has lowered MTRs as part of the effort to make communication affordable. The removal of MTRs has hurt MTN’s profitability and increased competitive pressure. As a result, the firm has been lobbying for reinstatement of MTRs, arguing it would help industry sustainability and support recovery. There’s little to prove whether these rules have made it easier for consumers to communicate since RURA has not released details from the trial period after these rules were introduced.
