MTN takes some beating in South Africa

Telecoms giant, MTN Group, has taken some beating in South Africa. It is projecting a fight back in the 2013 financial statement released yesterday.

Whilst MTN Group recorded revenue growth 9.8% to R207.8 billion, MTN South Africa’s revenue shrunk by 6.1% to R39.7bn.

The South African picture project a tough market as it nears maturity. Competition with other operators Vodacom, Cell C and Telkom mobile has become red hot. Smaller operators Cell C and Telkom mobile are mounting a brave attack for market share. They stand to be propelled by new pricing regulations (mobile termination rates) cooked by the Independent Communications Authority of South Africa (ICASA). That is the legal challenge undertaken by Vodacom and MTN is defended successfully.

MTN said yesterday “Although there is still much work to be done, MTN South Africa started to show some progress during the second half of the year after a challenging start to 2013.”

The group reported that its pre-paid subscriber base declined by 1.1%, bringing the total pre-paid base to 20.7 million subscribers. “Most of the subscriber loss reported earlier in the year was recovered in the second half.”

“The post-paid segment performed well, increasing its subscriber base by 11,3% to 5,0 million. MTN South Africa recorded an increase in the number of upgrades to higher tariff plans.”

That added up to a total subscriber base of about 25.7 million for MTN South Africa. This compared to just over 30 million for Vodacom and about 13 million for Cell C. The war is on to alter these numbers.

While the South African picture of MTN might be troubling, all seems to be well at group level, except for a few glitches here and there. That is the beauty of MTN. The group is diversified across 22 countries, mainly in Africa and some in the Middle East. That is perhaps why MTN share price remained unshaken yesterday at R199.50, 0.08% or 16c up on the day.

MTN Group international picture remains impressive. During 2013 MTN Group subscribers increased by 9.8% to 207,8 million.   The group says “The efficient execution of our extensive capital expenditure (capex) programme significantly improved network quality and capacity, and facilitated higher voice and data traffic. This investment in capacity will also ensure that MTN remains competitive and is able to roll out solutions beyond traditional voice services.”

With group revenue of R208 billion MTN produced earnings (EBITDA) of R58.8 billion up 13,0% on the 2012 figure. This is after rolling out capital expenditure to the amount of R30.1 billion.

“Our Nigerian operation continued to improve its performance during the year, with fourth quarter revenue up 15,3% year-on-year (YoY) in local currency,” said the group.

“Both our Large and Small opco clusters delivered more pleasing results with revenue growth of 11% and 7.5% respectively, with particularly encouraging growth reported by our operations in Uganda, Ghana, Cameroon, Sudan, Yemen and Zambia.”

On its troubled markets MTN said it “continues to work closely with all relevant authorities in managing US and EU sanctions against Iran, Syria and Sudan. MTN continues to retain international legal advisors to assist the Group in remaining compliant with all applicable sanctions. In particular, we will focus on the segregation of funds to ensure continued compliance with both internal and external requirements.”

news@ujuh.co.za

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