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MTN Uganda sustained a positive trajectory across all business segments amidst heightened pressure on key macroeconomic indicators. Average YoY inflation subsided to 3.2% in the quarter (Q1 2023: 9.5%), although it accelerated sequentially from the Q4 2023 average of 2.5%, driven by higher energy, fuel and utilities inflation. The Uganda shilling depreciated by 2.7% against the US dollar in the quarter, following a relatively stable full year 2023, which registered a 1.8% depreciation. In this context, we are pleased with the strong operational and strategic execution delivered in the period, which enabled us to exceed our medium-term targets of mid-teens revenue growth and margin stability.
Our service revenue grew by 19.4%, underpinned by strong double-digit growth in voice (up 15.5%), data (up 22.4%) and fintech (up 23.5%) revenues. We delivered a 19.6% expansion in EBITDA, supported by a disciplined focus on expense efficiencies which helped to maintain our EBITDA margin at 52.0%.
Our robust financial result was further driven by a solid commercial performance with subscribers up by 12.0% to 19.9 million, as we navigated the SIM- registration regulations in the market. Active data subscribers and fintech users were up by 27.6% and 13.6%, respectively.
To accelerate core connectivity, we invested a total of Ush 122.0 billion focusing on strategic network enhancements, particularly on 4G LTE. We also increased our fibre deployment and 5G coverage as we enriched our home broadband proposition.
As a result, we increased our 4G population coverage by a further 4.5pp YoY to 85.2%. We are proud of the recognition bestowed on MTN Uganda at the MWC Barcelona 2024 conference for having the fastest network in Uganda and the fastest LTE network in Africa. This is a testament to the continued investment in the network to ensure an incrementally better experience for our customers.
Underpinned by the capacity and quality of our network, we deepened smartphone penetration by 5.9pp to 40.6%, also supported by our strategic de- vice financing partnerships. Increased smartphone usage has enabled us to drive a digital lifestyle through appification. This quarter, on the My MTN app, we launched Tesadeals, an online marketplace to support the entrepreneurial activities of our youthful base while on the MoMo app, we launched an online ticketing service offering a suite of tools designed to improve event management.
MTN Uganda was the official telecommunications partner for the 19th Non-Aligned Movement (NAM) and G77 + China Third South Summits; a demonstration of our commitment to nation-state partnership in line with our Ambition 2025 strategy. Our collaboration with the Government of Uganda encompassed the provision of strategic advisory and technical advice for branding the two summits to position Uganda as a choice destination for trade and investment and provision of all telecommunication requirements for the meetings.
We are especially pleased to have been recognized as the Best Employer of the Year 2023 by the Federation of Uganda Employers, winning the Gold category award. Our initiatives to support employee diversity and inclusion and continued improvement in our employee engagement were recognized for this achievement. Our women in the workforce hit 51% in 2023 and our women in leadership increased to 38.6%. We are grateful for this achievement and will continue to ensure that MTN Uganda remains the employer of choice.
In line with our ambition to create shared value, we supported 118 women entrepreneurs under the Advancing Women Entrepreneurs programme demonstrating our commitment to empowering women in business across the country. With this initiative, our representation of women suppliers doubled to 15% in 2024, a feat we are proud of. MTN strives to conduct business that supports the long-term sustainability of the societies in which we operate.
We are pleased with the performance achieved this quarter and for the support received from all the stakeholders of the business, particularly our customers, staff and regulators. We remain focused on maintaining the growth momentum and ensuring EBITDA margin resilience, in line with our Ambition 2025 objectives.
Operational review: Solid performance driven by strong performance in data and fintech
We delivered a robust performance in Q1 2024, growing our service revenue by 19.4% driven by solid growth in our voice, data and fintech business units.
- Voice revenue grew by 15.5% driven by strong subscriber acquisition of 2.1 million net additions YoY, coupled with rigorous customer value management (CVM) initiatives, which drove increased adoption of our personalised propositions targeting both on-net and off-net customers. Voice revenue contribution to service revenue declined to 42.5% (Q1 2023: 44.0%) in favour of stronger growth revenue verticals.
- Data revenue increased by 22.4% supported by a 27.6% growth YoY in active subscribers. This was further driven by an acceleration of MB per sub by 31.6% due to the improved network performance post the acquired spectrum deployment. Our smartphone penetration increased by 5.9 pp to 40.6% supported by improved device and bundle affordability. Our data traffic increased by 68.0%, with growing 4G traffic contribution of 76.4% (Q1 2023: 68.3%). To support our own the home ambition, we deployed fibre extensively in key cities and set up 303 5G strategic sites as we position MTN as the home broadband provider of choice in a competitive market. We have doubled our active home broadband subscribers and registered notable revenue growth in the quarter. Data revenue contribution to service revenue increased to 24.0% (Q1 2023: 23.4%).
- Fintech revenue registered 23.5% growth anchored by an increase of 1.5 million fintech subscribers YoY who drove transaction volume growth in our ecosystem. In the period, the volume of transactions grew by 26.6% to 970.6 million and value by 17.8% to Ush 33.9 trillion. This reflected a strong recovery in our loans and savings portfolio within advanced services, as well as resilience in revenue from basic services supported by MoMo float enhancement to our agents. Our agent base grew by 11.7% to 183k, while the number of merchants within our ecosystem rose by 18.7% to 318k, in the quarter. Fintech revenue contribution to service revenue increased to 29.1% (Q1 2023: 28.1%).
- Digital revenue grew by 22.0% supported by increased engagement and growing appreciation of the content value-added services we offer. Our digital subscribers increased by 34.3% to 2.3 million led by 444k additions on the ayoba super app. Digital revenue contribution to service revenue held steady at 0.4%.
- EBITDA grew by 19.6% supported by strong revenue performance and continued cost optimization of our business operations, in line with our expense efficiency programme. As a result, our EBITDA margin held steady at 52.0%, above our medium-term target of 50%.
- Capex invested (ex-leases) increased by 27.9% as we frontloaded our network investment requirements focusing on 4G LTE and 5G. This resulted in a higher capex intensity, increasing by 1.1pp to 16.3%, while depreciation and amortisation increased by 12.3% as a result of higher right-of-use assets accrued from additional investment.
- Profitaftertaxfor the period increased by 24.4% to Ush 150.0 billion with a margin of 20%, an improvement from 19.2% in the previous year.
Outlook: Continued Investment And Execution Excellence To Sustain Customer Growth, Engagement And Usage
The first three months of the year saw a slight increase in macro headwinds, particularly inflation, prompting a hike in the central bank rate by 0.75% to contain the pressure on near-term economic performance. These headwinds are expected to remain in the near term with Bank of Uganda projecting inflation to trend up further to a range of 5.5-6.0% over the year, which may impact our customers. We recognize the impact of these risks on our operating environment and as such, we continue to implement business resilience measures to deliver on our medium-term guidance.
Looking ahead, in our connectivity business, our focus remains on executing key commercial strategies to drive customer acquisition to sustain our voice revenue growth. On the data front, we will continue with rigorous CVM strategies to drive engagement and usage, supported by ongoing investment to drive data traffic. Our continued investment will also support our priority to meet our quality of service and other licence obligation requirements.
In fintech, our wesotinge one loan suite campaign has given us a head start leading growth of our Fintech business through the savings and loan product. We have also enhanced our merchant onboarding, focusing on quality acquisitions, encouraging FMCG cashless adoption and addressing bottlenecks in the ecosystem by launching merchant loans to bridge liquidity gaps. We will also continue to leverage our partnership with Mastercard to broaden our service offering (especially advanced services) and scope of financial inclusion, as we enable our users to easily conduct secure and convenient transactions.
This quarter, we will continue the work to address our localisation requirement to explore a further sell-down of the 7% shareholding to the public to broaden our shareholder base.
We maintain our medium-term guidance of delivering mid-teen service revenue growth, stable EBITDA margins above 50% and maintaining capex (ex-leases) intensity at mid-teen levels as we support our growth prospects.