MTN’s SA subscriber guidance shock

MTN has dropped 2.1 million customers from its subscriber net addition guidance for 2013.

In announcing its results for the year ended December 2012, in March, the group said it expected to gain an additional 2.9 million new subscribers, however that figure has been revised down to 800,000.

On Wednesday (14 August), MTN admitted that it had dropped the ball in its home market.

The group reported that its total subscriber base for South Africa declined by 420,000 to 25 million in interim results for the six months ended June 2013.

“MTN South Africa felt the effects of weaker consumer demand and was slow to respond to aggressive price competition in both voice and data offerings,” it said.

In April, the group reported a net loss of 470,000 customers in the first quarter (from January 1 and March 31).

When asked how the group expected to accrue new customers in South Africa, MTN SA CEO Zunaid Bulbulia, said: “We chose not to compete at the levels our competitors were doing for the first half of the year….we are now back.”

“On June 2 we launched with our new promotion and the performance as a result of the launch has been positive, and indications are that we can sustain that for the rest of the year.”

MTN, which has operations in 22 countries in Africa and the Middle East, aims to grow its overall subscriber base by a further 21 million in 2013, including 7 million people in Nigeria, and 3.85 million in Iran.

MTN said that overall group subscribers increased 6.5% in the interim period to 201.5 million, supported by competitive offerings and increased network capacity, it said.

In lunchtime trade on the JSE, shares in MTN slipped back R3.00 or 1.51% to R196, having briefly broken through R200 on Wednesday.

[Edit: The original article said that MTN’s South African customers had declined by 600,000 – this was inaccurate and has been corrected to a decline of 420,000 customers as per MTN’s report.]

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MTN’s SA subscriber guidance shock