MTN Rwanda recorded a 307.1 per cent decline in profit after tax to a Rwf10.5 billion loss during the first six months of 2024, with the firm attributing the drop to increased depreciation expenses on tower leases and decreased earnings. According to the company’s financial statement, earnings before interest, taxes, depreciation and amortisation (EBITDA), a metric for earnings from core operations, decreased by 29 per cent year-on-year to Rwf39 billion. EBITDA margin, which reflects profitability from core operations as a percentage of revenue, decreased by 13.8 percentage points to 31.3 per cent in the same period. ALSO READ: MTN Rwanda posts slow growth in quarter one Mapula Bodibe, MTN Rwanda’s CEO stated that the telco made investments in network expansion and modernisation which increased capital expenditure by 29.4 per cent to Rwf29.5 billion. The plan, she said, is to complete the modernisation of Kigali City and Western Province by the end of 2024 and begin upgrading our sites in major cities and rural areas in 2025, with completion expected by 2027. “We believe this will provide the platform to deliver best-in-class connectivity to our customers, improve our margins, and ensure our shareholders are rewarded with sustainable growth and returns,” she said. In the statement, the company highlighted that despite registering growth in subscriber base, it was not reflected in voice and data revenue streams, mainly due to the impact of zero mobile termination rate (MTR) regulatory directive on interconnect revenues. Service revenue were flat at 0.8 per cent increasing to Rwf121 million, whereby voice and data revenue decreased by 24.3 per cent and 1.6 per cent, respectively, offset by revenue of fintech arm of the telco, Mobile Money Rwanda Limited (MMRL), which increased by 30.6 per cent. “The rise in expenses emanated from subsidy costs related to our low-cost 4G smartphone Ikosora+, additional costs related to One Network Area (ONA) permanent roamers in South Sudan and Uganda as well as the impact of the depreciation of the local currency against the US dollar on foreign denominated expenses,” said Mark Nkurunziza, MTN Rwanda Chief Finance Officer. The change of rules in MTR was introduced last year by the Rwanda Utilities Regulatory Authority (RURA), which dictated that telecommunication companies would not get paid for calls received on their network from other networks in Rwanda for a period of one year. RURA introduced new interconnection rules in August last year. The policy, expected to be reviewed after one year, was put in place as a step in the right direction to end the long-standing high charges among telecom operators. While MTN executives say this has been eating into their profit margins, operators with fewer subscribers in the past showed concerns about the previously higher interconnection rates made on rival’s network, saying the dominant player was using this rate as an unfair competition tool in the telecom market.
