South Africa-based operator group MTN announced it was making contingency plans related to the use of ZTE equipment in its networks, following sanctions slapped on the Chinese vendor by US authorities.

During the company’s Q1 earnings statement, CEO Rob Shuter (pictured) said the company was “assessing both the impact and contingency planning” following the order issued by the US department of commerce last month.

US penalties on the Chinese vendor relate to statements made during an investigation into ZTE breaking US laws on exporting goods to Iran – a country where MTN holds a minority stake in the second largest operator MTN Irancell.

The Chinese vendor has also been under fire from authorities in the UK, which branded the company’s network equipment a “security risk”. Although no formal ban was put in place, the country’s national cybersecurity agency warned operators against using its equipment.

While none of the UK’s operators would confirm to Mobile World Live whether they used – or were planning to use – ZTE equipment in future network rollouts, MTN has made several public announcements on partnerships with the vendor for a number of network rollouts.

Q1 growth
During MTN’s trading update, which provides top-line trends rather than detailed financial data, MTN said it booked a 9 per cent year-on-year increase in revenue across its markets in Q1. This was fuelled by growing revenue from data services and increased earnings from mobile money.

Data revenue increased 27 per cent year-on-year across its markets, while earnings from mobile money services grew 52 per cent compared to Q1 2017.

The company offers mobile money services in the majority of its markets – with the notable exception of its home market of South Africa. In the wake of comments made in January stating MTN aimed to be the largest bank in Africa, rumours emerged the operator was set to revive the service in South Africa.

During the first four months of the year, MTN further increased its financial services play, expanding a deal with banking group Ecobank and making a number of country-specific upgrades to its service.

Shuter also pointed to strong growth in its divisions in Nigeria and Ghana – two units scheduled for IPO. The executive added the processes were on track and both units should float by the end of the year.