Who is SA’s mobile ARPU king?

Revenue figures reported by South Africa’s mobile operators over the last 10 years show who’s winning when it comes to monthly average revenue per user (ARPU) in SA.

While market leaders MTN and Vodacom have enjoyed relatively high amounts of average revenue per user – and seen those revenues decline in the wake of increased competition – newcomers like Telkom Mobile have struggled to find their footing.

Cell C, following an 18 month marketing campaign which has seen its user base grow significantly, remains tight-lipped on what impact its growth has had on its bottom line.

SA Mobile blended ARPU
SA Mobile blended ARPU

Telkom Mobile

Since it’s official launch in 2010, Telkom Mobile (then known as 8ta) has struggled to become a profitable venture for Telkom Group.

The fourth mobile operator in South Africa, Telkom Mobile predictably has the least amount of subscribers – 1.54 million in Telkom’s last offical reporting – but also the lowest ARPU amongst all operators, at R61.47 in 2013.

Telkom’s ARPU reporting has only been recorded since 2011, as previously all Telkom mobile ARPU figures were Vodacom’s figures, due to Telkom’s 50% stake in the company until 2009.

In the first year of Telkom Mobile’s (8ta’s) operation, the company had an ARPU of only R22.60.

In the past few months, Telkom CEO, Sipho Maseko has addressed the problem of the loss-making mobile arm, saying that the company wants to “de-risk” Telkom Mobile, and are looking at possible strategies for the operator moving forward.

Vodacom

Southe Africa’s largest mobile operator, with close to 30 million subscribers in SA and 51.6 million in total (FY 2013), Vodacom’s dominance in the market has also lead to healthy ARPU figures over the past decade.

In 2003, the operator recorded it’s highest ARPU figure of R183, but in line with operators globally, has seen this figure recede.

In its latest reporting, Vodacom indicated that it was earning a blended average of R129 per user as of full year, 2013 – a 21.7% drop from the figure of R157 recorded in 2012.

There are a  number of reasons why mobile ARPU figures have declined globally including the acquisition of new users from low income and rural segments, increased price competition and the commoditisation of voice and messaging services.

MTN

Like Vodacom, MTN started the turn of century with healthy ARPU figures, which have steadily declined as the years have gone on, and the market opened up.

MTN is South Africa’s second largest mobile operator with 25 million subscribers in SA, and 189.3 million subscribers in total (FY 2012), and its highest ARPU was recorded in 2002, with a blended monthly figure of R208 per user.

According to its annual reports, between 2006 and 2012, the company has seen many ups and downs year-on-year in the figures, but has maintained the highest average ARPU over the past 10 years, at R161.26 per user.

In its full year 2012/13 report, MTN recorded ARPU of R122, 9.8% lower than the R134 recorded in the previous year.

Cell C

Because Cell C is not a JSE-listed company, it is not required to publicly disclose information regarding its business operations.

However, over the years, various media reports have detailed some ARPU figures, with the most recent report quoting a blended ARPU rate or R99 in 2011.

Cell C, under Alan Knott-Craig‘s leadership, has not yet released an ARPU figure for 2012 or 2013, and the operator was unable to provide official ARPU figures by the time of publication.

Knott-Craig has guided Cell C through an aggressive marketing campaign to bolster its user base, taking the third largest mobile operator to over 12.3 million subscribers, as of October 2013.

Earlier this month, Cell C reported that the company has doubled the traffic on its network over the last 12 months.

ARPU highs and lows on SA mobile operators – 2002 to 2013

Operator ARPU high
ARPU low
Latest available
ARPU
Vodacom R183 (2003) R125 (2007) FY 2013 R129
MTN R208 (2002) R122 (2013) FY 2012/13 R122
Cell C R93 (2010) R152 (2006) 2011 report R99
Telkom Mobile R74.16 (2012) R22.60 (2011) FY 2013 R61.47

All figures reflect latest data taken directly from annual reports or available media reports (Cell C)

More on SA mobile operators

Mobile subscribers in SA: who’s eating whose lunch?

MTN continues to lose SA subscribers

Telkom’s modest mobile numbers

Vodacom: the good and the not so good

Cell C sign-ups boom

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Who is SA’s mobile ARPU king?