MTN regains footing in SA

MTN Group said its South African operation regained traction in the quarterly period ended September 2014, adding 1.4 million new subscribers.

Subscribers advanced 5.7%, from 25.269 million, to 26.701 million, mainly attributable to competitive offers such as “rush hour” and “talk free” in the prepaid segment, it said.

As a result, the prepaid subscriber base increased by 7.1% to 21.2 million, while the postpaid segment grew its subscribers marginally to 5.5 million, 2.0 million of which were telemetry SIMs.

Data revenue growth was muted, largely impacted by a 17.9% decrease in the average effective rate per megabyte. Data now contributes 22.7% to the operation´s total revenue.

Data subscribers increased to 16.1 million and data usage grew by 55.9% supported by attractive data promotions and improved network quality, MTN said.

“South Africa continues to focus on various cost containment initiatives and on optimising its operating model,” the group said.

Blended ARPU for SA decreased by 4.6% to R89.26, during the quarterly period.

In August, MTN noted that market share in SA declined by 2.7 percentage points to 31.9% as competition intensified in the pre-paid segment.

MTN Group president and CEO, Sifiso Dabengwa, said that challenges for its local operation were “as a direct result of not being competitive”.

However, MTN chief financial officer, Brett Goschen said that the SA segment had turned a corner, with the group “cautiously optimistic”. He pointed to 400,000 net additions in July alone.

MTN SA had seen a drop in subscribers between Q4 2013, and Q1 2014, to 24.875 million, from 25.7 million. However, the group saw approximately half a million net additions in the following quarter.

MTN Group highlighted “satisfactory subscriber growth” of 2% to 219 million subscribers quarter-on-quarter (QoQ), across its 22 territories.

Data revenue increased by 34% year-to-date (YTD), contributing 17.8% to total revenue.

The group also pointed to registered Mobile Money subscribers of 22.2 million, up 20.2% QoQ.

“MTN reported encouraging results for the third quarter, delivering subscriber growth of 2,0% QoQ, however, performance was impacted by continued aggressive competition and stringent regulatory requirements,” said Dabengwa in a statement.

“The South African operation delivered an improved performance in the prepaid segment supported by competitive offers while the Nigerian operation faced a challenging regulatory environment resulting in lower-than-expected growth.”

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