MTN shows mixed bag of fortunes
Telecoms firm MTN feels the impact of its protracted dispute with the Nigerian authorities.
|||Johannesburg - JSE-listed and leading emerging market mobile operator, MTN, reported a mixed bag of results during its first quarter update yesterday, with subscribers decreasing 1.4 percent quarter on quarter, largely as a result of the protracted dispute with the Nigerian authorities.
The company also saw its subscriber base decrease 1.7 percent in South Africa, but countries like Cameroon, Uganda and Ghana reported stronger subscriber growths of 3.1 percent, 7.8 percent and 4.6 percent respectively.
Read: MTN subs slump on Nigeria cuts
MTN now has 30.1 million subscribers and its prepaid customers declined by 1.8 percent to 24.9 million.
MTN group executive chairman Phuthuma Nhleko said the results reflected the turbulent year the company faced in 2015.
Nhleko said the group had to undertake major structural and operational measures to protect its brand.
“During the first quarter of 2016, the group was impacted by the ‘after shocks’ of the events that took place towards the end of 2015, mainly the subscriber registration process in many of the countries in which we operate, with Nigeria being the largest,” Nhleko said.
The company also saw its post-paid base decline 0.8 percent to 5.2 million in South Africa as a result of the alignment with Autopage, the disconnection of telemetry SIMs and the expiration of legacy low-cost packages.
Quarterly average revenue per user was impacted by the 48-hour network outage in February, which cut nearly 3 percent of its revenue for the month, while billable minutes for the quarter declined by 11.3 percent year on year.
MTN shares rose 0.95 percent yesterday to close at R149.41.
In December, the Nigerian Communications Commission fined MTN $5.2 billion (R74.15bn) for failing to disconnect 4.5 million unregistered SIM cards. The fine was later reduced to $3.9bn.
Nhleko said the group’s deregistration of the subscribers saw its overall base in Nigeria fall 6.9 percent quarter on quarter to 57 million subscribers.
The group’s south east Africa unit recorded a 2 percent growth in the quarter to 22.7 million subscribers driven mainly by strong growth in Uganda. The region consists of South Africa, Uganda, Zambia and Rwanda as well as joint ventures in Botswana and Swaziland.
In Uganda MTN raised its subscriber base by 7.8 million to 9.6 million, supported by MTN Zone and attractive bundled offers.
Peter Takaendesa, a portfolio manager at Mergence Investment Management, said: “A key highlight is that Nigeria remains a big problem for MTN and is likely to remain that way for at least the next six months.”
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