MTN Group reported a 7.1 percent rise in first-quarter group revenue helped by a strong performance in data services, Africa’s biggest mobile phone operator said on Wednesday.
Ratings agency Fitch downgraded MTN to junk status in April and gave it a negative outlook, citing weakness in the economic and operating environments of its main subsidiaries in South Africa and Nigeria.
MTN said data revenue, which contributed 20 percent of total revenue, was up 29.4 percent for the three months ended March 31.
Shares in MTN were up 1.36 percent to 128.52 rand at 0700 GMT.
“In our key markets of South Africa, Nigeria and Iran, significant network investments made over the past few years are underpinning the improving revenue trends,” Group Chief Executive Rob Shuter said in a statement.
“The network investment planned for 2017 is expected to support further market share gains across our markets.”
Year-to-date capital expenditure stands at 4.6 billion rand, MTN said.
Founded with the help of Pretoria at the end of white rule in 1994, MTN is seen as one of post-apartheid South Africa’s biggest commercial successes, but clashes with regulators in recent years have raised questions about its governance and have hobbled its growth.
The firm, which does the bulk of its business in emerging markets, said Nigeria’s subscriber base declined by 2.3 percent in the quarter due to new regulations, while total revenue increased by 11.6 percent.
MTN agreed to pay a fine of 330 billion naira ($1.1 billion), reduced from $5.2 billion, in June 2016 after a prolonged legal battle to end a dispute in Nigeria over missing a deadline to cut off unregistered SIM cards, which continues to sap its subscriber numbers.
“The ongoing network investment in Nigeria is delivering continued improvements in data quality in the metro areas and highlights MTN Group’s commitment to the Nigerian market notwithstanding the challenging macro environment,” Shuter said.
MTN is the largest mobile phone operator in Nigeria with about 60 million subscribers, and the country accounts for about a third of its revenue.
MTN’s South Africa unit reported a 4.1 percent increase in service revenue, while Irancell booked a 76.7 percent increase in data revenue.
(Reporting by Nqobile Dludla; editing by Vyas Mohan and Jason Neely)