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Signs of spring at MTN SA

An analysis of MTN’s third-quarter results shows the SA operation may finally be getting onto a more solid footing.
Sifiso Dabengwa MTN CEO

An analysis of MTN’s third quarter results, published on Thursday, show the telecommunications group’s South African operation may finally be putting its weak performance of recent years behind it. However, it’s still struggling to grow its post-paid subscriber base.

MTN South Africa grew its subscribers by 2% to 29,1m by the end of the September quarter, outstripping subscriber growth of just 0,9% for the group as a whole. Group CEO Sifiso Dabengwa said the South African business strengthened its market position in the third quarter.

The group attributed the improved performance in South Africa to a 3,1% growth in prepaid customers, which it said was “supported by the continued success of attractive below-the-line campaigns”. Billable minutes of use jumped by 41,4% year on year and average revenue per user climbed by a healthy 8,8% for the quarter.

Data revenue in South Africa increased by 40% to contribute 31,5% to total revenue. “This was driven by attractive segmented data bundles and an increased uptake of digital services,” MTN said. “The roll-out of the 3G and LTE networks continued to make good progress with 1 746 largely co-located 3G and 811 LTE sites added during the quarter.”

However, one disappointment was the contract subscriber base, which shrank by 2,9% to 5,2m. MTN blamed this mainly on the disconnection of 90 000 low-cost router Sims recorded on the Autopage subscriber base as well as continued low availability of handsets.

“While supply chain issues have been largely resolved, the operation continued to experience limited availability of handsets during the quarter as a result of delayed deliveries,” the group said. It did not say what was causing the problem.

MTN's subscriber numbers in South Africa and Nigeria over time

In MTN’s biggest market, Nigeria, the group reported a slight decline in subscriber numbers as the result of the disconnection of 5,1m Sims in line with regulation requirements. To date, 3,4m of those Sims have been reconnected, it said.

Data revenue in Nigeria grew by 16,8% to reach 21,3% of total revenue. Data revenue growth was kept in check by a steep decline in data tariffs as a result of aggressive competition, MTN said. “The effective data tariff declined almost 60% year on year.”

MTN Irancell, meanwhile, reported a 3% growth in subscriber numbers to 45,5m. Strong data revenue improvements mean data sales now make up 28,5% of total revenue in Iran.

Other highlights of the third quarter numbers:

  • The group grew its Mobile Money user base to 36,5m across 14 countries. That was up by 12,7% quarter on quarter.
  • It had 233m customers group wide, an improvement of 0,9% on the second quarter number.
  • Constant currency data revenue increased by 27% year on year, contributing 23,2% to total revenue.
  • Voice and data traffic increased 18,7% and 120% respectively.  — © 2015 NewsCentral Media

This article was originally published on TechCentral. To view the original, please click here.

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