The growth of service revenue, strong performance of fintech business, and improved management of costs have led to the profit turnaround of MTN Rwanda Plc's profitability in the first quarter of 2025. Rwanda’s leading telecommunication firm saw its net profit rise by 228.5 per cent year-on-year to Rwf1.6 billion in the first quarter of 2025. ALSO READ: MTN Rwanda posts turnaround growth in quarter one 2025 It had posted a Rwf1.2 billion loss in the same quarter of 2024. “It is exciting to be able to deliver a profit after last year's challenges,” said Dunstan Ayodele Stober, MTN’s Chief Finance Officer, in an exclusive interview with The New Times. The telco’s Q1 financial statements indicate that performance in earnings before interest, tax, depreciation, and amortization (EBITDA), a metric for earnings from core operations, increased by 9.3 per cent to Rwf26.5 billion. Total revenue improved by 12.4 per cent to Rwf67.9 billion, driven mostly by data revenue which soared by 12.2 per cent to Rwf11.7 billion despite data subscribers falling 8.2 per cent to 2.3 million. Fintech revenue (Mobile Money) grew by 28 per cent year-on-year, reaching Rwf32.9 billion, as mobile money usage continues to deepen across Rwanda. However, its voice revenue, while still contributing significantly, declined by 6.4 per cent year-on-year to Rwf15.8 billion. Stober noted that another contributing factor to the profit turnaround is the drop in costs of sale by almost 6 per cent year-on-year, recovering from the challenge of high roaming costs within the One Area Network in East Africa, as well as contained operating costs. He added that the company revised the amortization period of its investments to reflect a more accurate useful life, which helped reduce asset depreciation and resulted in a gain of approximately Rwf1 billion. This is also part of the new international financial reporting standards. The competitive market dynamics due to the change of rules in mobile termination rate (MTR) saw MTN experience consecutive quarters of losses in 2024. ALSO READ: MTN blames half-year earnings loss on zero rating rules In August 2023, Rwanda Utilities and Regulatory Authority (RURA) set MTRs, fees telecom operators pay each other when calls terminate across networks, to zero for a one-year trial period, meaning no operator paid termination fees to another. The telco has been pushing for reinstating the fees highlighting that it was eating into its profit. Stober highlighted that they are still engaging the regulator to reach a final decision. “If you look at this from the regional perspective or other markets, whoever the player is, the return on investment helps one to continue delivering on value proposition, and the whole purpose is simply to make sure we are compensated for the cost of carrying traffic, rather than being a profit-making scheme.” Lessons from ‘Macye Macye’ In 2022, MTN Rwanda in partnership with Bank of Kigali and the smartphone financing company Intelligra Solutions launched Macye Macye scheme aimed at facilitating customers to purchase smartphones and tablets through an installment plan. This initiative was aimed at making devices more accessible for people who couldn’t afford to pay the full price at once. However, it faced issued in 2024 whereby people were selling such smartphones with outstanding payment and others were being deducted money from their MoMo wallet as part of Macye Macye, yet they had no such loan. The telco said to have addressed the issues and refunded those wrongfully deducted. “What we are focusing on is working with the partners to try and address remaining complaints and challenges from customers to make sure nobody is disadvantaged as a result of that,” said Stober. “We are also looking at the lessons we can pick from Macye Macye in terms of commercial execution to deliver something that is sustainable and attractive to customers that would fix those challenges in the near future, he added. Besides Macye Macye, he added that the telco delivered 100,000 subsidized smartphones, contributing to move of increasing smartphone penetration in the country. MTN Rwanda’s financial statement indicated that the telco conducted network optimization works in 2024, something Stober said to be linked with the move to encourage customers’ shift to 4G network. “Our focus on costs is very key and we expect both the growth we are looking at in revenue and the cost to deliver anything between 40 to 42 percent in terms of EBITDA margin.”
