MTN pushes smartphone adoption in Rwanda

MTN is pushing smartphone adoption in Rwanda through its device-financing programme as a way to increase digital and data revenues beyond traditional voice and SMS services. 

In a new report detailing the connectivity gap on the African continent, global industry body GSMA said the continent’s telecom operators have done a lot to expand their networks, which now cover more people, but much of that infrastructure is yet to be fully used because many simply cannot afford devices with which to connect to the internet.

The connectivity gap is measured in two main ways. The first way is according to network coverage where areas with mobile broadband networks are measured against those without. The second way is a usage gap where people live in areas covered by broadband networks, but are yet to subscribe for or make use of that connectivity.

To tackle the second type of gap, MTN Rwanda CEO Mapula Bodibe said: “as part of our commitment to driving digital and financial inclusion, MTN Rwanda has distributed over 120,000 smartphones under the device financing programme “macye macye” since its launch in November 2022.”

This has driven up smartphone penetration by 3.1 percentage points to 25.7%, which has resulted in increased mobile internet adoption.

For mobile operators, the calculation is easy. The more people with smartphones, the greater the data and internet usage, meaning more revenue. In the case of MTN, that also means the ability to sell additional services, and financial services products through its MoMo (mobile money) app. 

On Monday, MTN reported its capital investment and network modernisation programme aims to achieve 2/3G population coverage of 99.99% by the end of 2023. This currently sits at 99.10%.

The operator started upgrading its sites to 4G from July but the reported smartphone adoption figures indicate how big the usage gap is for this infrastructure. 

Caroline Mbugua, head of state commendation and GSMA director of public policy for Sub-Saharan Africa, told Business Day that financing programmes where customers typically get to spread the cost of a device over time are a good way to tackle the issue of access. 

“We’ve seen device-financing programmes in a number of markets. Again, this just helps to reduce the cost of devices at the consumer level.”

Ultimately, financing should be just one solution and part of a multipronged approach to address this challenge, she says. 

MTN Rwanda, also known as MTN Rwandacell, is the largest mobile operator in the East African country with a population of about 13-million. It listed on the Rwanda Stock Exchange in May 2021. 

The company reported that service revenue rose 13.6% to Rwf 186.2bn, or about R2.79bn, for the nine months to end-September.After-tax profit dropped 25.2% to Rwf11.1bn due to high finance costs related to inflation adjustments on its tower leases and currency depreciation affecting the company’s foreign obligations. 

Active data subscribers rose 8.4% year-on-year to 2.6-million, helping to push up ebitda 4.7% to Rwf84.7bn. Subscriber numbers rose 5.6% year-on-year to 7.2-million.

Mobile money subscribers increased by 11.5% to 4.6-million, while capital expenditure, excluding leases, rose by 11.5% to Rwf42.9bn. 

gavazam@businesslive.co.za