MTN fights back in South Africa, holds on in Iran etc

MTN has regained some of the ground it lost during the first half of 2013 in South Africa in terms of subscriber numbers suggesting that it is fighting back against an attack by competitors and mainly Cell C and Telkom Mobile.

This is reflected in MTN Group’s quarterly update which shows the globalising telecoms giant recorded a 1.1% growth in its global subscriber base to 203.8 million.

With operations spread across 22 countries MTN Group reports are interesting in featuring reports from some of the most challenging markets in the world at this point in time. These will include markets like Iran and Syria where MTN has strong presence.

On the South African from MTN’s subscriber base added 233 000 new subscribers bringing the total to 25.2 million. This, said MTN Group, was due to “more competitive product offerings and focused marketing campaigns”.

However South African revenue growth declined (YoY). The group said this was mainly due to lower effective voice tariffs and slower subscriber growth.

The group noted that “MTN South Africa showed some progress after a challenging first half but we expect conditions to remain challenging for the balance of 2013”.

Reflecting increased take up of smart mobile communication gadgets MTN South Africa saw significant growth in data revenue base. “Data remains the largest contributor to revenue growth with an increase of 16.6% (YoY). Data users increased to 13.9 million as a result of attractive data packages,” said the group.

Commenting about group performance MTN CEO Sifiso Dabengwa said “The third quarter has been characterised by lower than anticipated subscriber growth following ongoing price competition and subscriber registration requirements across a number of markets”.

Subscriber growth was limited to 1.1% quarter on quarter (QoQ) mainly impacted by disconnections in Nigeria related to registration requirements, slower than expected subscriber growth in South Africa, as well as slower subscriber growth in Iran”.

Dabengwa added “Data revenue for the group increased by 34,7% year on year (YoY), contributing 14.1% to total revenue while mobile money subscribers increased 10.7% QoQ to 13.4 million across 13 operations.”

The group said MTN Nigeria maintained market share in a highly competitive market. “Subscribers grew marginally to 55.6 million. This was impacted by the mandatory SIM registration deadline in July 2013, the disconnections in the Borneo state following the shutdown of services as well as lower gross connections in the GSM market. These factors will continue to impact net additions for the balance of the year”.

In Iran, where MTN has faced extremely challenging conditions as a result of a standoff between Iran and the West, the subscriber base declined by 1.7% to 41.3 million (QoQ). The Iranian situation seems to be easing after a new and moderate president, Hassan Rowhani, succeeded hardliner Mahmoud Ahmadinejad. There has been some positive movement on clearing the path which may see inspection of Iran by the U.N. International Atomic Energy Agency (IAEA).

MTN Groud said MTN Irancell’s slowdown in gross connections was due to the weakening economy in a fully penetrated market and increased promotional activities by the competitor. “Encouragingly notwithstanding the decline in subscriber numbers the positive revenue trend evidenced at the interim period continued in the third quarter. Local currency data revenue increased 54,8% (YoY) and now contributes 9,6% of total revenue. This was mainly driven by improved network quality and attractive data packages. Local currency ARPU increased by 4,3% assisted by the increase in data revenue”.

MTN is also facing another extremely challenging market in form of the war devastated Syria. The group said MTN Syria continues to operate in an extremely challenging environment. “Subscribers increased by 5.1% to 5.8 million and encouragingly, the negative revenue trends appear to have stabilised and the business recorded a 10.3% growth in revenues (QoQ) supported by an increase in tariffs. Security, power outages and insufficient fuel supply remain some of the key challenges. Data revenue increased by 39% (YoY) while local currency ARPU increased by 4.8% (QoQ)”.

About MTN Ghana, the group said the operation performed well in a competitive environment maintaining market share. “QoQ subscribers increased by 1.4% to 12.8 million subscribers. Net additions in the quarter were impacted by a clean-up of the subscriber base.

Local currency data revenue increased 67.3% (YoY) and contributed 8.3% of total revenue. Mobile Money continued to gain traction with 2 million mobile money subscribers reported at the end of September“.

MTN Cameroon increased its subscriber base 7% to 8.2 million subscribers (QoQ) and maintained market share. “Local currency revenue showed improved growth over the interim period and the business made further gains in value share. Local currency data revenue increased by 31,8% (YoY), contributing 4,8% to total revenue”.

The group said MTN Ivory Coast increased its subscribers by 1.7% to 6.7 million (QoQ). “Local currency data revenue increased by 31.9% (YoY) while mobile money gained momentum, increasing 12.1% to 1.3 million subscribers. Local currency ARPU declined 42%.”

MTN Uganda saw its subscriber base increase by 4.3% to 8.4 million (QoQ). “Revenue trends in the quarter continued with the same momentum as reported at the interim period. This was mainly attributable to attractive bundled offers aimed at both acquisition and retention”.

The group said MTN Sudan’s subscriber base decreased marginally in the quarter. “This was mainly due to the recently introduced subscriber registration programme, increased competition and a delay in site rollout also impacted subscriber numbers”.  Local currency revenue and earnings before interest, taxation, depreciation and amortisation (EBITDA) growth remained strong”.

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