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MTC hits N$2 billion in prepaid revenue

Mobile Telecommunications Limited (MTC) recorded steady revenue growth, driven by strong prepaid income and strategic financial service expansions in 2024.

The company recorded growth of 5.8% in revenue in the 2024 financial year, surpassing the N$2-billion mark.

According to an analysis by Simonis Storm Securities, the launch of Maris, a financial services platform targeting unbanked communities, was a strategic move strengthening MTC’s market position and enhancing financial inclusion.

However, rising capital expenditure (Capex) investments and challenges in 5G deployment highlight ongoing operational hurdles.

“The growth in the average revenue per user (Arpu), driven by prepaid services, underscores the importance of this segment, yet we see the expansion of data revenue as the critical lever for sustained growth,” Simonis says.

MTC has had over two million active subscribers since 1994.

According to Simonis, the company’s diversified revenue streams significantly reduced its reliance on a single-income source, mitigating risks associated with market fluctuations and enhancing its resilience in a competitive environment.

“The company’s high dividend yield of 11% stands out as a key attraction for income-focused investors, particularly in a market where yield opportunities are limited.

“We also commend MTC’s extensive network coverage, which now reaches 98% of the population. Coupled with the impressive backbone fibre expansion of over 1 000km during the 2024 financial year, this reinforces the company’s infrastructure leadership and positions it well to support future growth in data and digital services,” the analysts say.

Simonis further says MTC’s early investments in 5G position it as a first mover in Namibia – a potential game changer if regulatory hurdles are resolved.

Successfully leveraging this advantage could unlock substantial long-term growth opportunities in both consumer and enterprise segments.

The analysts say the ongoing year-on-year decline in post-paid Arpu poses a threat to revenue stability, reflecting potential challenges in retaining higher-value customers or driving additional value from this segment.

“We also view the high Capex investments in MTC Maris as a potential risk, particularly if profitability is delayed. This could strain cash flows and divert resources away from other growth initiatives if execution falters.”

Revenue grew by 5.8% year on year, with Aweh prepaid services, introduced in 2011 and widely regarded for their affordability and value, continuing to be a key growth driver, they say.

“This year, prepaid income crossed the N$2-billion mark for the first time, a significant milestone that underscores the segment’s resilience and importance to MTC’s revenue mix,” Simonis says.

However, contract income experienced a steep 16.6% decline in 2024 – the sharpest contraction to date.

While usage charges have increased compared to 2023, subscription fees and contract handset revenue have both suffered notable declines of 4% and 92%, respectively.

This trend reflects the economic realities in Namibia, where contracts have become less accessible for many consumers.

In contrast, Aweh prepaid services continue to attract a growing consumer base, offering better perceived value in the current economic climate.

That said, contracts remain a critical revenue stream, particularly due to their widespread adoption among large corporations.

In fact, contracts have increased their contribution to total revenue, rising from 60% in 2020 to 69% in 2024.

Roaming and handset and accessories sales have been standout performers in 2024, with growth of 41.3% and 68.3%, respectively.

MTC’s 350 agreements with roaming partners across 152 countries, including prepaid roaming on 51 networks, form a strong foundation for this growth.

The recovery of tourism, a rise in business travel and the rollout of eSIM technology for outward roaming have significantly contributed to this segment’s strong performance.

This year, Simonis says MTC has set two key objectives.

Firstly, it aims to introduce new prepaid and post-paid products designed to increase post-paid Arpu and reverse the year-on-year decline.

Secondly, the company plans to continue expanding its prepaid customer base, Simonis says.

“These objectives align with broader consumer behaviour, which has shifted dramatically with the rise of app-based services like zoom, Outlook, WhatsApp and social media platforms.

“These digital tools are rapidly replacing traditional SMS and voice calls as consumers gravitate towards data-powered communication channels,” the analysts say.

– email: matthew@namibian.com.na

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