On Tuesday 4th October 2022 in a press conference to introduce Sylvia Mulinge, as MTN Uganda’s new Chief Executive Officer, Charles Mbiire, the MTN Uganda Board Chairman and 3rd largest shareholder assured customers, staff, shareholders and other stakeholders that with Sylvia Mulinge, the telco was in “capable hands”.
He told the media that the board was “very confident” in Ms. Mulinge’s “passion for transforming customers’ lives, leadership, and women empowerment using technology” and they were banking on this possession for the telco’s “accelerated growth and the positioning of MTN for greater relevance ahead”.
“I would like to reassure all our stakeholders inclusive of our staff, business partners, shareholders, and the government of Uganda that MTN Uganda is in capable hands that we believe, collectively as a board of directors will take the company to greater heights whilst driving shared value for everyone in the MTN Uganda ecosystem,” Mr. Mbiire said.
Speaking shortly after accepting the mantle of office, a beaming Ms. Mulinge said she was glad to be starting a new career in Uganda and specifically at MTN Uganda, and pledged to build on her predecessors’ strong foundation.
“I am happy to be joining a winning team on whose great experience and support I can count,” Ms Mulinge said, adding: “Standing on the shoulders of giants, I am ready to take up the challenge and build on my predecessors’ achievements and steer MTN Uganda to greater heights through strategic partnerships and further leverage MTN as the most trusted and valued brand that it already is”.
But behind those assurances, was a pensive Mulinge. Yes, she had the requisite experience ⏤ 15 years of experience in the industry that included working in senior roles such as Prepay Product Manager, Head Of Retail, Head of Safaricom Business – Sales, General Manager Enterprise Business, and Director of Consumer Business, all at Safaricom one of the continent’s largest telcos⏤ but she still was anxious on the task that lay ahead.
“True, I was coming from a big business- Safaricom; in fact, there was a time when I was running a team of about 4,000 people when I was Chief Consumer Business Officer. I was in charge of the call centre, sales and distribution, digital, research and marketing etc; it was big. But you know, this role is different because, in my Safaricom role, you still know there’s somebody who takes full accountability at the end of the day and you are being provided with the direction to take,” Sylvia recalls.
“But coming to this role, and waking up to the reality that now the responsibility fully lay on me, I would be lying to say it wasn’t an intimidating thought”,” she told CEO East Africa Magazine in an interview on the sidelines of a media conference to announce the 2023 financial results.
The other issue at the back of her mind was that she was coming in to fill the shoes of Wim Vanhellepute who by all standards had done a good job. During Wim’s 6 years at MTN, the telco’s revenues grew by 57% from UGX1.308 trillion in 2016 to UGX2.060 trillion at the end of 2021- a compounded annual growth rate (CAGR) of 8%. During this period, MTN Uganda’s net profit grew nearly four times, from UGX96 billion to UGX340 billion, a growth of 254% and a CAGR of 23%!
MTN Uganda at the end of June 2022 announced that Wim would be leaving MTN Uganda to take up a new role as Operating Executive for the MTN Group’s WECA Markets of Liberia, Guinea-Conakry, Guinea-Bissau, and Congo-Brazzaville effective 1st August 2022. Andrew Bugembe took on a caretaker role until the end of September 2022. Ms. Mulinge took office on 1st October 2022.
However, regardless of Wim’s overall great performance, some key areas needed fixing to keep the telco on track to achieve its Ambition 2025 agenda. Ambition 2025’s key priorities include; building the largest and most valuable platforms, driving industry-leading connectivity operations, creating shared value, and accelerating portfolio transformation.
For example, growth in the voice segment which until 2021 accounted for about 50% of total revenue only grew by 3.6% that year and in the 3 years to the end of 2022 grew by a CAGR of just 1%. In fact, even if at the end of 2022 there was an 11% overall revenue growth, voice revenues declined by -0.5% from UGX1,006.7 billion in 2021 to UGX1,001.5 billion at the end of 2022.
It also did not help matters that in data, MTN was playing second to Airtel with a whole UGX145.7 billion gap in revenues between the two rivals⏤ UGX511.3 billion for MTN at the end of 2021 versus UGX657 billion for Airtel.
In fintech, Airtel Mobile Company Uganda Limited (AMCUL), the fintech sister company of Airtel Uganda in 2022 posted a 102.2% jump in revenues from UGX312.4 billion to UGX631.6 billion, inching closer to MTN’s UGX656.1 billion.
Therefore the use of the word “acceleration” by Mr. Charles Mbiire’s brief to Sylvia was not just any other nice word, but the mission itself. MTN was slowing down in growth and Airtel was getting its act together. Clearly, there was work to be done and less time for worrying. The new CEO had to hit the ground running.
Mulinge recalls her first meeting with her Exco team.
“Everybody told me all the great things that were being done, and in my head, I was like, what exactly am I going to say? So I turned to everyone and asked them, if we were to create a legacy after our contracts are done; what is the legacy that we want to create?”, she recalls.
The trade doesn’t lie
Away from the PowerPoint presentations, this strategy wouldn’t have been complete without days of immersion in the trade- to come to grips with the dynamics of the trade.
“The first week I came, I spent some time in the trade, because when you go to the trade; when you go to the market, you will know are your customers happy. Your distributors will tell you, whether they are selling more of your product or more of somebody else’s. The trade does not lie. PowerPoint slides do lie sometimes. Getting to the trade gets you the facts that you need to paint the reality that you can then act on,” she says.
“Based on the feedback that I received (from her exco and the trade) we crafted what would be a sufficient strategy. We then walked to the floor, met the call centre guys and walked to the trade and all our other stakeholders. Once we (Mulinge and her Exco) understood the job that needed to be done, it then felt familiar. It didn’t feel as intimidating, because it felt like the things that I was doing across the border on the other side and we got on with the business of executing that,” Sylvia told this reporter.
But to cut the long story short, she says her strategy boiled down to making sure that the customers were happy and engaged, securing government understanding of the MTN agenda for Uganda, securing employee buy-in as well and understanding and motivating the other key players in the ecosystem such as the distribution trade, to keep them involved enough.
Fine, she understood the assignment, but the assignment needed a good amount of investment. So Sylvia headed back to the board ⏤they had to put money where their mouth was. Leveraging the confidence and goodwill they had in her, she was able to secure a UGX353.5 billion investment kitty, to her network.
“The network is like our highway, if the highway is not well-tarmacked and it is full of potholes, no matter what you say, at the end of the day falls on deaf ears,” Sylvia quips.
The UGX353.5 billion was put to good use- an additional 350 sites in 2023 focusing on 4G LTE, which increased national 4G network coverage by 6.7 percentage points to 85.1% as well as increased the 3G and 2G network national coverage to 92.6% and 98.6% respectively. MTN also added 2,654km of fibre network in major cities around the country, bringing total coverage12,072km across the country.
The telco also in July 2023 rolled out its 5G network, closing the year with 37 sites.
With a stronger and wider coverage came more customers. Overall mobile subscribers- the engine that drives the business, grew by 13.3% from 17.2 million in 2022 to 19.5 million- adding a record 2.3 million new subscribers! MTN hadn’t seen mega subscriber harvests in recent times. With double-digit growth in overall users, voice revenue which had begun declining jumped 11.6% from UGX1001.5 billion in 2022 to UGX1117.2 billion. at the end of 2023.
The increased 3G, 4G and 5G network combined with an aggressive smart devices push (smartphone penetration went up to 39.1%, from 35.0%) saw MTN’s data subscribers recover, growing by 22.4% from 6.7 million users to 8.2 million users. Like day follows night, this growth in subscribers, fed a 21.7% growth in revenue from UGX511.3 billion to UGX622 billion which is nearly 7 percentage points above the 3-year average (CAGR) of 14.8% prior to her arrival.
Similarly, fintech subscribers grew by 15.5% from 11 million to 12.7 million. Fintech revenue also grew 17.6% from UGX656.1 billion in 2022 to UGX771.6 billion in 2023, which is 6.4 percentage points above a previous 3-year average of 11.2%. This was on the back of both increased users (1.2 million users were added to the ecosystem as well as increased transaction volumes, UGX133.2 trillion in 2023 compared to UGX92.3 trillion in 2022.
| 2020 | 2021 | 2022 | 2023 | 3-year CAGR to 2022 | 2021/22 % Growth | 2022/23 % Growth | ||
| Total Revenue | 1877.8 | 2060.1 | 2286.3 | 2669.1 | 6.8% | 11.0% | 16.7% | 10.0% |
| Voice | 971.4 | 1006.7 | 1001.5 | 1117.2 | 1.0% | -0.5% | 11.6% | 10.5% |
| Data | 338.3 | 412.5 | 511.3 | 622 | 14.8% | 24.0% | 21.7% | 6.9% |
| Fintech | 476.9 | 525.3 | 656.1 | 771.6 | 11.2% | 24.9% | 17.6% | 6.4% |
| PAT | 321.7 | 340.4 | 406.1 | 493.1 | 8.1% | 19.3% | 21.4% | 13.3% |
| Expenses | 948.4 | 1002.5 | 1106.9 | 1299.1 | 5.3% | 10.4% | 17.4% | -100.0% |
| Subscribers | 14.2 | 15.7 | 17.2 | 19.5 | 6.6% | 9.6% | 13.4% | -99.7% |
Overall, total revenue grew by 16.7% from UGX2.286 trillion in 2022 to UGX 2.669 trillion, which is more than twice the CAGR of 6.8% in the 3 years before Sylvia Mulinge’s arrival and 5.7 percentage points above the 11% growth posted between 2021 and 2022.
Subsequently, profit after tax increased by 21.4% to UGX493.0 billion in 2023, from UGX406.1 billion. This is nearly 3 times higher than the 3-year CAGR of 8.1% before her arrival and 2.1 percentage points above the 19.3% posted in the previous year. More importantly, the profit margin improved to 18.5% vs. 17.8% in 2022- an indicator of a top bang for cash.
Overall, Sylvia Mulinge has accelerated MTN’s growth across all the major fundamentals ⏤ subscriber acquisition, transaction volumes, revenues and subsequently profitability.
“The results you see today were a result of taking a few bets on a few big things,” Ms. Mulinge emphasises.
Eyes on winning the data game and creating the largest digital financial platform
Sylvia believes that having set a solid foundation, in her first full year, there is more work to be done to sweat this investment. She acknowledges that gains in the voice segment are in the short run and future growth lies in fintech and data.
“We will continue to invest in our network to drive our mobile data strategy and home broadband proposition in line with our ambition to ‘own the home’. Commercially, we expect to leverage the momentum in our customer acquisition and continue to refine our personalised offers to further sustain the growth in our connectivity business,” she wrote in an investor advisory.
“On the fintech side, our commercial focus is to strengthen our competitive positioning in the market by focusing on our advanced revenue products. With the challenges experienced in our lending product, we have since onboarded new partners to enhance our lending offering,” Mulinge adds.
“We kicked off 2024 with a brand campaign, Wesotinge, promoting our enhanced loan portfolio which should augment that revenue line. With the success of cashless adoption via MoMoPay, we have commenced sectoral engagements to refine our informal merchant pricing proposition. We shall also leverage the partnership with Mastercard to broaden our service offering to customers and drive our journey to becoming the largest digital financial platform in Uganda,” she concludes.
But she must do all this in a commercially sustainable way.
“Along with the investment is also the question of margins,” she says, adding: “At the end of the day as we drive revenue, we have to watch the costs. So how do we optimise our costs, how do we digitise more, automate more and how do we increase staff productivity? How do we organise ourselves such that we are leaner but more highly productive?”