Chamwe Kaira
Simonis Storm has forecast steady but moderate growth for Mobile Telecommunications Limited (MTC) over the next three years, driven by gradual subscriber growth and rising demand for data services.
In a research note, analyst Max Rix said MTC’s net income is expected to increase from N$3.71 billion in the 2025 financial year to about N$4.7 billion by the 2028 financial year. This implies a compound annual growth rate of about 6%.
The forecast is supported by an expanding active subscriber base, projected to grow from 2.32 million to around 2.55 million by the 2028 financial year.
Following the robust growth in the 2025 financial year, Simonis Storm anticipates a low single-digit increase in average revenue per user.
Rix said enterprise services, fibre broadband, and digital offerings are expected to remain the fastest-growing parts of MTC’s business.
Higher data usage, growing demand from small and medium-sized enterprises, and wider fibre coverage are supporting this growth. These trends are expected to offset slower growth in prepaid ARPU and stabilising device sales after the strong contribution seen in the 2025 financial year.
“As a result, future growth is increasingly expected to be driven by value-added services and broadband solutions rather than pure subscriber additions.”
On costs, Simonis Storm expects MTC’s earnings before interest, tax, depreciation and amortisation to remain strong, supported by operating leverage and disciplined cost control.
The 2025 financial year EBITDA margin of 49.3%, equal to N$1.82 billion, is viewed as a peak supported by one-off factors. The margin is forecast to stabilise at about 48% over the next three years, as staff, cybersecurity, and sales costs return to normal levels.
Capital expenditure is expected to remain high, between N$700 million and N$750 million a year, as MTC continues to roll out 5G and fibre networks. This is expected to increase depreciation and amortisation from N$450 million to around N$510 million by the 2028 financial year.
Simonis Storm also expects a more favourable tax position following Namibia’s reduction of the corporate tax rate to 30%. MTC’s net cash position is expected to support continued positive net finance income.
Based on these assumptions, EBITDA is forecast to rise to about N$2.12 billion by the 2028 financial year. Earnings before interest and tax margins are expected to improve moderately as revenue growth outpaces depreciation. Net profit for the 2028 financial year is projected at about N$1.16 billion.
From a valuation perspective, Simonis Storm said MTC remains attractively priced compared to regional peers.
Based on estimates for the 2026 financial year, the stock is trading at approximately seven times its forward earnings, while larger African telecom operators have multiples ranging from eight to twelve times.
The firm’s main valuation method applies a forward price-to-earnings multiple of 7.5 times to 2026 earnings per share of about 143 cents. This results in a fair value estimate and target price of N$10.73.
MTC is currently trading at around 3.7 times EBITDA, below African sector averages of between five and seven times.
The target price implies a modest re-rating to about 4.4 times 2026 EBITDA, which Simonis Storm considers conservative given MTC’s margins, net cash position, and dividend history.
A discounted cash flow analysis produced values in line with the multiple-based estimates.
Simonis Storm said it continues to view MTC as a cash-generative telecommunications operator with stable earnings.
While competitive and regulatory risks remain, the firm said MTC’s balance sheet, free cash flow, and dividend policy provide downside support.
Caption
Simonis Storm has forecast steady but moderate growth for Mobile Telecommunications Limited (MTC).
- Photo: Contributed
