MTN on Wednesday said group revenue increased by 7,1% year on year, supported by a 29,4% improvement in data revenue, suggesting a return to a firmer footing for the Johannesburg-headquartered emerging markets telecommunications giant.
However, group subscriber numbers fell by 1,5% quarter on quarter, to 236,8m. MTN did not provide earnings information.
In an update for the first quarter ended 31 March 2017, MTN said its South African operation reported a “solid performance”, with a 4,1% increase in service revenue. However, the post-paid business in South Africa still requires work, it said.
The first quarter numbers are the first to be reported on by newly appointed group president and CEO Rob Shuter, who joined MTN in early March from Vodafone. Shuter was hired to replace Phuthuma Nhleko, who had been leading the group following the late-2015 departure of former CEO Sifiso Dabengwa. Dabengwa fell on his sword over the imposition of a multibillion-dollar regulatory fine in Nigeria, MTN’s largest operation.
“The new group president and CEO [Shuter], chief financial officer [Ralph Mupita] and chief operating officer [Jens Schulte-Bockum] are now in place and have settled in, swiftly adjusting to their respective roles while beginning a review of the business to see where further improvements can be made,” MTN said in a statement to shareholders.
In Nigeria, MTN said it “delivered continued positive operational momentum and reported an 11,6% increase in total revenue”, while MTN Irancell increased total revenue by 19,3%. The Iranian operation benefited from “encouraging data revenue trends”.
Group-wide voice traffic (billable minutes) increased by 2% and total data traffic by an impressive 145%. However, group subscribers decreased by 1,5% from the December quarter, largely because of restatements to subscriber numbers in Ghana, Rwanda and Zambia.
“In the first three months of the year, we saw a continuation of the improving operational momentum experienced in the fourth quarter of 2016. While we still have work to do to meet our full-year targets, we continue to leverage off the progress made during 2016 and are encouraged by the progress in Project Ignite in both South Africa and Nigeria,” said Shuter. Project Ignite is an initiative to optimise operations in South Africa and Nigeria started by the previous management team.
Revenue growth of 4,1% in South Africa was supported by a 17,8% increase in data revenue and a 20,3% improvement in digital services revenue. However, outgoing voice revenue declined by 5,4% as billable minutes fell by 7,5%.
“The priorities for the South Africa business remain driving network quality, offering attractive value propositions and improving the customer experience. In the period, we continued our network expansion with 515 LTE sites and 53 3G sites going live. We now have very strong network performance in three of the four large metro areas (Cape Town, Pretoria and Durban) and expect this to support a continued improvement in our net promoter score.”
Though subscriber numbers in South Africa declined by 1,7% quarter to quarter to 30,2m, MTN blamed this on “traditional seasonality” and said it remains committed to guidance it provided of 630 000 net subscriber additions for the full year.
“We are encouraged by the progress made in our relationship with our franchise channel [in South Africa] and this, together with the ongoing systems and process improvements, should drive continued improvement in the customer experience.”
In Nigeria, the 11,6% increase in total revenue was supported by a huge, 71,3% jump in data revenue. “While the momentum is encouraging, the ongoing review of value-added service subscribers will put pressure on digital revenue for the balance of the year.”
MTN Nigeria’s subscriber base declined by 2,3% in the quarter. This was impacted by new regulations that require all subscriber connections to take place in permanent brick-and-mortar structures. This led to a “marked reduction” in gross connections across the industry. MTN Nigeria also excluded subscribers whose only activity is receiving incoming SMSes.
“Despite the challenging economic conditions, MTN Nigeria continued to execute on its network roll-out plans, with a particular focus on the data network. This remains a key element in the group’s medium-term growth strategy.”
MTN Irancell, meanwhile, also reported a spike in data revenue, up 76,7% year on year.
All numbers are reported on an organic (constant currency) basis to reflect actual operational performance, MTN said. — (c) 2017 NewsCentral Media
