Luxembourg-based Millicom International Cellular (MIC), which provides wireless and broadband services across Africa and Latin America under the ‘Tigo’ brand name, has registered a 4.0% annual increase in turnover for Q1, booking revenues of USD1.405 billion for the three months ended 31 March 2014, compared to USD1.351 billion a year earlier. MIC reported strong performance across the board, registering revenue growth of 2.0% (7% at local currency) in the mobile segment, 9.6% (13% at local currency) for its cable and digital media business and 43.8% (49%) from its rapidly expanding mobile financial services (MFS). Despite the expansion in earnings, increases in operating expenses, primarily in the cost of sales and marketing expenses, led to a drop in EBITDA of 4.4% year-on-year to USD537 million whilst operating profits slumped to USD236 million from USD294 million in the corresponding period of 2013.
In the mobile space, MIC claimed a total of 51.6 million subscribers, up 10.1% y-o-y, including 21.85 million across its African operations (10.9%) and 15.63 million in Central America (-1.3%). A small reduction in its Central American user base was offset by expansion elsewhere. Helping drive revenue and subscriber growth, MIC noted that smartphone sales had more than tripled year-on-year to 818,000, of which 472,000 were entry-level devices whilst a further 251,000 were mid-range handsets. Due partly to this increase, mobile data penetration reached 20.9% across MIC’s user base at end-March 2014, up 5.8 percentage points y-o-y.
MIC’s cable and digital media division, meanwhile, booked earnings of USD125 million for Q1 2014 and 1.318 million revenue generating units (RGUs), up from 1.096 million twelve months previously. MIC has looked to drive the uptake of multi-play services, but has made little progress on this front. RGUs per household increased from 1.35 to 1.40, but penetration of double- and triple-play packages remained unchanged y-o-y at 23% and 5% respectively. Paving the way for future expansion, however, MIC extended the reach of its networks from 2.365 million homes passed to 3.051 million, of which 2.224 million were passed with high speed hybrid fibre-coaxial (HFC) networks, compared to 1.977 million at end-March 2013.