MTN South Africa hit by weak rand and high phone prices

MTN has released its latest quarterly update for the period ended 30 September 2018.

Over the period, the telecommunications group said that it has seen an increase in both group service (up 10% YoY) and group data revenue (up 23.9% YoY).

This arrives on the back of a quarter-on-quarter increase of group subscribers by 2.5 million to 225.4 million, it said.

MTN noted that it benefited from the particularly strong performance of operations in Nigeria and Ghana, while some operations in its West and Central Africa (WECA) region remained under pressure.

It added that MTN South Africa is continuing to execute on operational improvements.

MTN South Africa

MTN South Africa’s margin on earnings before interest, taxation, depreciation and amortisation (EBITDA) was little changed YoY at 34.5%, down from 34.8%.

MTN noted that the lower sequential EBITDA margin was largely impacted by higher device prices following the weakness in the rand exchange rate and increased device sales in the quarter.

Data and digital revenue increased by 12.5% and 9.9% respectively, while outgoing voice revenue declined by 8.4%.

“In a weak economy, consumers felt the pressure of a higher VAT rate, becoming increasingly price sensitive,” MTN said.

“Prepaid service revenue increased 0.5% and postpaid service revenue increased by 1.9%.

“MTN South Africa took steps to transform data prices, including introducing attractive social media bundles and CVM offerings.

“As a result, customers optimised their data and voice spend and the number of active data subscribers increased by 6.7% QoQ to 13.5 million,” it said.

MTN added that the consumer postpaid business maintained its positive momentum, the stabilisation of the enterprise business continued, and the wholesale business gained traction.

“At the end of the quarter, we had 23.7 million prepaid users (down 3,4% QoQ), 2.9 million postpaid subscribers (up 2.1% QoQ) and 2.8 million telemetry subscribers,” it said.


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