A Message From Our Chief Executive Officer
2021 marked a major milestone for MTN Uganda as 20% of the issued shares of the company were offered to the market in an unprecedented Initial Public Offering (IPO) valued at USD 1.25 billion. The IPO reduced the ownership of MTN Group from 96% to 83.05%, which aligns with MTN’s group-wide objective to create shared value in its markets.
The transaction received 21,394 applications, with majority of these being Ugandans meeting the National Telecommunications Operators (NTO) license requirements of listing. Also worth noting, the participation of the National Social Security Fund and other local pension funds means that more than 2.2 million local investors became indirect investors in MTN Uganda. Pleasingly, 65% of MTN Uganda’s staff also participated in the offer, which is a strong indicator of the employees’ confidence in, and alignment with, the future of the company.
Another key milestone in the year was the successful separation of the mobile financial services operation (MTN Mobile Money Uganda Limited) from the telecommunications business. We obtained two licenses, a Payment Service Provider (PSP) and a Payment Service Operator (PSO) license from the Bank of Uganda in compliance with the provisions of National Payment Systems Act, 2020. MTN Mobile Money Uganda Limited is a fully owned subsidiary of MTN Uganda Limited.
I am also pleased to note that the company emerged as the best data and voice network in Uganda having attained the Best Network Performance Score in the year in a countrywide assessment undertaken by Rohde & Schwarz, a leading independent technology firm. This outcome bears out our substantial and continued investment in the network. We remain committed to deliver on our mandate to allow every Ugandan to enjoy the benefits of a modern connected life.
MTN Uganda was the first to introduce a low-cost mobile device financing program in the market, to make data access more affordable to customers. Device financing enabled customers to own a smartphone at an initial cost equivalent to a feature phone price. Smartphone access is a key lever in driving digital inclusion and data growth. With more than 100,000 phones financed both internally and through partners, we see an increasing number of customers adopting data. This strategy, coupled with our dynamic data value proposition, supported smart phone penetration of 30.8% (+7.4pp) by the end of FY 2021.
Another success was the roll out of the first in-country telecom digital loyalty program, MTN Senkyu where we sustainably reward our customers for their continued support of MTN Uganda.
In line with our Ambition 2025 strategy, we have invested a total of UGX 448.7 billion in projects targeted at improving our network services all over Uganda. At its core, this strategy sets the context in which MTN Uganda will drive the business forward and capture explosive growth opportunities from digital acceleration trends. It also aims to reveal the inherent value of some of MTN’s businesses and assets, such as financial technology and fibre over the medium-term, for the benefit of MTN’s shareholders.
For MTN, Uganda is home and to demonstrate this we contributed a total of UGX 3.5 billion into the community through our MTN Foundation in 2021. Through our partnerships with the Ministry of Education, we constructed classroom blocks and IT laboratories for students in the eastern and north-western region. We also partnered with the Ministry of Health through COVID-19 support initiatives and various non-governmental organizations through youth empowerment and refugee support programs.
Trading conditions in the year remained difficult due to the impact of new COVID-19 variants, which exacerbated an already challenging macro-economic environment. The lockdowns and limitations of movement arising from COVID-19 resulted in significant restrictions on business operations.
Against this backdrop, we delivered a resilient operational performance with overall mobile subscriber base up by 1.5 million (+10.7% YoY) to 15.7 million and maintaining our market leadership. This growth is attributable to our sustained sales engagement and customer value management (CVM) efforts to keep subscriber churn in check.
Our active data users increased by 16% to 5.3 million, underpinned by our data growth initiatives targeted at converting incidental users on the base into active users and acquiring new data users through the smartphone growth acceleration program. We also expedited our 4G network roll out by building a total of 664 4G sites in the year which has in turn increased the 4G coverage to 62.7% (+17.7pp YoY).
We were also assigned additional spectrum (1,800MHz and 2,100MHz) resources that we deployed to improve network quality. In addition, we embarked on a spectrum efficiency program, to migrate data traffic from 3G to 4G which has greatly improved the data experience with faster throughputs delivered on the 4G network. The 4G contribution to total data traffic stood at 53% (+13pp YoY).
In fintech, our mobile money active subscribers rose to 9.9 million (+16.3% YoY) underpinned by effective subscriber acquisition and an engaging CVM program. In the broader ecosystem, we grew our active mobile money agents to 173,000 (+47.8% YoY) through our attractive agent incentive program and trade assistance initiatives. We also increased our merchants by 61% to 52,926.
MTN Uganda reported solid service revenue growth of 9.4% YoY, ahead of average annual inflation of 2.2%, driven by double digit growth in key growth segments of data and mobile Money. Supported by cost management initiatives through our expense efficiency program, EBITDA rose by 13.8% in the year while our EBITDA margin expanded by 1.8pp to 51.3%.
Overall economic growth momentum is expected to improve in 2022, supported by massive investment in the oil industry which is expected to have a multiplier effect in the economy coupled with continued macro policy support. We will continue to invest in our network and platforms to drive digital and financial inclusion in Uganda and continue to grow our business.