MTN Uganda’s growth engine slowed noticeably in the first quarter of 2026 as election-related internet shutdowns, mobile money disruptions, regulatory pressures and urban trade reforms combined to soften what would otherwise have been another strong financial performance for the telecom giant.
The company still posted growth across key revenue lines and continued expanding its subscriber base, but the pace of growth moderated sharply compared to the previous two years while profitability came under pressure for the first time in recent quarters.
MTN Uganda reported a 7.7% increase in service revenue to UGX905.9 billion during the quarter ended March 31, 2026, compared to 13.5% growth in Q1 2025 and 19.4% growth in Q1 2024.
Profit after tax declined 3.8% to UGX174.0 billion from UGX180.9 billion recorded a year earlier, marking one of the clearest signs yet that the company is entering a more complex operating environment.
EBITDA rose 4.3% to UGX462.9 billion while the EBITDA margin declined to 50.6% from 52.4% in Q1 2025.
The telecom operator directly linked the softer performance to the internet shutdown imposed during Uganda’s January 2026 general elections, which affected data services, mobile money transactions and customer onboarding activities during the period.
“Our operations in the quarter were partially hampered by the internet shutdown during the national general elections in January 2026 which affected provision of data and mobile money services and onboarding of customers in the period,” said Sylvia Mulinge, Chief Executive Officer of MTN Uganda.
The company also cited disruptions arising from local government reforms aimed at decongesting cities and urban centres across Uganda.
According to MTN, the reforms negatively affected parts of its mobile money ecosystem, particularly trade and agent operations in key urban locations.
“We also experienced challenges in trade following the local government reforms to decongest cities across the country. This unfortunately led to disruptions in our mobile money ecosystem partner operations in the period,” the company stated.
The twin pressures of political disruption and urban trade dislocation came at a time when MTN was already facing a changing regulatory and macroeconomic landscape.
While headline inflation averaged a relatively moderate 3.0% during the quarter compared to 3.5% in Q1 2025, the Uganda shilling depreciated by 4.0% against the US dollar due to rising global oil prices, heightened institutional dollar demand and geopolitical tensions in the Middle East.
The weakening shilling, combined with rising energy and fuel costs, increased operational pressures on the telecom operator at a time when it was aggressively investing in network expansion and digital infrastructure.
Even with these headwinds, MTN Uganda continued to expand its customer base, which rose 7.2% to 24.4 million subscribers from 22.8 million a year earlier.
Data subscribers increased 16.4% to 11.9 million while fintech subscribers grew 4.8% to 14.2 million.
The strongest momentum continued to come from data services, which remained the company’s largest growth driver despite the internet disruptions.
Data revenue grew 13.6% to UGX267.6 billion from UGX235.5 billion, supported by a 16.4% increase in active data users and a 25.1% rise in data traffic.
However, MTN acknowledged that the internet shutdown materially slowed traffic growth during the quarter.
“Data revenue contribution to service revenue continued to improve, increasing by 1.5 percentage points to 29.5%,” the company noted.
Voice revenue, historically MTN’s largest earnings pillar, showed signs of structural slowdown, growing just 2.2% to UGX327.1 billion from UGX320.0 billion.
The business continued to feel the effects of declining Mobile Termination Rates, which regulators reduced again in January 2026 from UGX26.0 to UGX22.5.
The Uganda Communications Commission adopted a glide-path model intended to gradually lower interconnection costs across the industry over the medium term.
While the lower rates benefit consumers through cheaper cross-network calling, telecom operators face weaker interconnect revenues.
MTN said the reduction “impacted our outgoing voice revenues,” although the company partially benefited from lower incoming voice costs.
The fintech business, another major growth pillar for MTN Uganda, also experienced softer momentum compared to previous years.
Fintech revenue increased 7.4% to UGX274.5 billion from UGX255.7 billion, a notable slowdown from the double-digit growth rates the business had consistently delivered over the last several quarters.
Transaction volumes grew 7.0% to 1.25 billion transactions while transaction value surged 31.2% to UGX55.1 trillion.
The company said the disruptions affecting urban trade ecosystems impacted merchant and agent operations, though it continued strengthening wallet quality, advanced financial services and ecosystem partnerships.
MTN’s mobile money network nevertheless continued expanding strongly. Active agents increased 26.5% to 268,300 while merchants increased 25.9% to 128,500.
The company also highlighted growing adoption of advanced financial services such as MoMo Advance, savings and lending products.
Despite continued revenue growth, profitability weakened as operating costs rose faster than revenues.
EBITDA increased by only 4.3% to UGX462.9 billion from UGX443.7 billion while EBITDA margin declined from 52.4% to 50.6%.
MTN attributed the margin pressure to foreign exchange volatility, higher fuel and utility costs, aggressive network investments and increased lease costs associated with infrastructure expansion.
One of the most striking developments during the quarter was the sharp increase in capital expenditure as MTN accelerated investment into its network.
Ex-lease capex jumped 69.8% to UGX201.5 billion from UGX118.7 billion while capex intensity rose to 22.0% from 14.0%. Total capex increased 12.7% to UGX238.2 billion from UGX211.4 billion.
The investments focused on site densification, fibre deployment, network upgrades and expansion of 4G and 5G coverage.
By the end of the quarter, 4G population coverage had increased to 89.3% from 88.0% while 5G coverage expanded to 20.4% from 16.3%.
MTN said the aggressive front-loading of capex was intended to improve network reliability and customer experience over the course of the year.
“Our ambition to deliver the best network in Uganda facilitated a capex investment of UGX201.5 billion for the quarter, with a strong focus on site densification, network upgrades and fibre deployment,” the company stated.
Even with weaker earnings growth, MTN Uganda maintained its commitment to shareholder returns by declaring a first interim dividend of UGX8.5 per share amounting to UGX190.3 billion.
The company said the dividend reflected confidence in the long-term resilience of the business despite short-term operational disruptions.
Looking ahead, MTN Uganda remains cautiously optimistic but acknowledges that macroeconomic and geopolitical risks remain elevated.
The company warned of exchange rate pressures, supply chain disruptions, fuel price volatility, adverse weather conditions and global geopolitical tensions.
Still, management said it remains focused on scaling digital services, deepening fintech adoption, strengthening customer acquisition and expanding broadband connectivity.
MTN also confirmed it is working with the Uganda Communications Commission on a long-term roadmap to meet geographical coverage obligations across difficult terrains including lakes, forests and highways.
Importantly, the telecom giant maintained its medium-term guidance of upper-teen service revenue growth, EBITDA margins above 50% and mid-teen capex intensity.
