MTN Uganda’s profit after tax increased by 21.2 per cent to Shs571.2 billion in the nine months to September 2026, although the growth was largely driven by the absence of a tax settlement that affected earnings in the same period last year.
The telecommunications company recorded service revenue of Shs2.84 trillion, an 8.5 per cent increase from Shs2.62 trillion in the corresponding period of 2025, according to its unaudited financial results released on November 5.
However, excluding the Shs111 billion tax settlement recorded last year, profit after tax would have declined by 1.9 per cent, reflecting higher depreciation and financing costs associated with the company’s investment programme.
The results point to a business attracting more customers and recording increased demand for data and mobile financial services, but facing rising operating expenses and difficulties converting higher internet usage into corresponding revenue growth.
Rising costs weigh on operating margins
MTN’s earnings before interest, taxes, depreciation and amortisation (EBITDA), a measure of operating profitability, increased by 3 per cent to Shs1.47 trillion.
However, its EBITDA margin fell to 51.1 per cent from 53.9 per cent in the same period last year. The margin measures the proportion of revenue remaining after operating expenses but before depreciation, interest and taxes.
Total expenses increased by 14.6 per cent to Shs1.4 trillion, outpacing service revenue growth.
MTN attributed the pressure partly to higher fuel prices and the cost of expanding and maintaining its network. The company also reported foreign exchange pressures during the third quarter, as the shilling depreciated against the US dollar.
The company expects cost controls and operational efficiencies to support an EBITDA margin of about 50 per cent for the full year.
Data usage grows faster than revenue
MTN’s subscriber base expanded by 12.5 per cent to 26.4 million, following the addition of 2.9 million customers during the nine-month period.
Active data subscribers increased by 14.3 per cent to 12.6 million, while data revenue rose by 12.8 per cent to Shs860.6 billion.
However, data revenue growth slowed to 7.8 per cent in the third quarter, compared with 17.5 per cent in the second quarter.
This happened as data traffic increased by 31.9 per cent over the nine months, while average data consumption per subscriber rose by 15.4 per cent.
MTN attributed the slowdown partly to unauthorised public Wi-Fi operators selling unlimited internet packages through business fibre and fixed wireless connections.
The company argues that these services allow customers to consume more data without generating equivalent revenue for licensed telecommunications operators.
MTN’s financial report says regulatory enforcement against unauthorised public Wi-Fi services began in October 2026. The company sees the development as an opportunity to attract more customers to its home broadband services.
Registrations for home broadband increased by 58.9 per cent during the period.
Mobile money supports revenue growth
Revenue from financial technology services, which includes mobile money and the Xtratime airtime advance service, increased by 11.6 per cent to Shs902.8 billion.
Growth accelerated to 13.3 per cent in the third quarter, with mobile money revenue increasing by 13.8 per cent during the quarter.
The company’s active fintech subscriber base grew by 8.6 per cent to 15.5 million. Transaction volumes increased by 10.7 per cent to four billion, while the value of transactions rose by 18.3 per cent to Shs166.6 trillion.
The MoMo application also surpassed 832,000 users as MTN expanded its digital financial services.
During the period, the company introduced Entebbe Expressway toll payments through MoMo and expanded travel booking services under Travel by MoMo.
MTN also increased its network of mobile money agents by 20.9 per cent to 280,800, while its merchant base more than doubled to 202,800.
Shs397b invested in network expansion
MTN Uganda spent Shs397.7 billion on capital expenditure, excluding leases, during the nine months, representing a 32.6 per cent increase from the same period last year.
The investment supported the deployment of 255 new network sites and expansion of its fibre network to more than 40,000 kilometres.
The company reported that 4G population coverage had reached 94 per cent, up from 88.3 per cent a year earlier. Its 5G coverage increased to 25.6 per cent from 19 per cent.
MTN also extended its partnership with MTN Group and satellite internet provider Starlink into Uganda. The arrangement is intended to provide connectivity to enterprise customers in areas where conventional network infrastructure is difficult to establish.
The company said the investments were aimed at improving network capacity and quality while supporting increased demand for internet services.
MTN revises full-year growth expectations
Chief Executive Officer Sylvia Mulinge said the business continued to face pressure from higher operating costs and competition in the telecommunications market, despite growth in its customer base and digital services.
MTN now expects its full-year 2026 service revenue growth to fall below its medium-term guidance, broadly in line with the performance recorded during the first nine months.
The company is targeting an EBITDA margin of about 50 per cent through cost management and improved operational efficiency.
For shareholders, the board declared an interim third-quarter dividend of Shs4 per share, equivalent to approximately Shs89.6 billion.
This brings total dividends declared for the nine months to Shs21.25 per share, representing a 3.7 per cent increase from Shs20.50 in the corresponding period last year.
The latest dividend is scheduled for payment on December 18, 2026, with December 1 set as the book closure date.
