MTN To Slash Capital Expenditure, Records Rise In Data Revenue In First Quarter

Tech Security

Africa’s largest mobile operator MTN has indicated plans to cut down on capital expenditure by as much as a quarter in 2020, as it pays more attention to saving cash and ensuring its network remain operational during the Covid-19 pandemic. During an update for its first-quarter performance, the company has revised its Capex guidance to between R21bn and R22bn, from R28.3bn previously, saying it expects Covid-19 to interrupt supply chains and cause difficulties in rolling out extra coverage.

The mobile operator further revealed it was also seeking to save capital, though Covid-19 had a minimal effect on its first-quarter performance.

In a related development, MTN said data was one of its main drivers of revenue growth in the first financial quarter which ended March 31, as the country was placed under lockdown to curb the growth of the coronavirus pandemic.

The company recorded a 26.4 % increase in data revenue in the first quarter. Revenue from voice was down 6.3%, while fintech grew 26%.

CEO Rob Shuter said, "The impact of the pandemic on our quarter one performance was not significant as lockdown restrictions for our consolidated subsidiaries were only implemented from the last week of March 2020."

Digital revenue increased by 15.6%. Demand for broadband also improved sharply since the country was under lockdown, with companies encouraging employees to work from home.