Strike action and a decline in handset sales contributed to a 1,4% decline in reported revenue to R18,9bn at MTN South Africa in the six months ended 30 June 2015, the telecommunications operator’s parent, MTN Group, said on Wednesday.
But despite the strike, which started on 20 May and ended on 16 July, the South African operation managed to grow its subscriber base by 1,8% to 28,5m as the result of what MTN described as “attractive promotions and below-the-line campaigns in the prepaid segment”.
Prepaid subscriber growth was 2,7%, reaching 23,2m, while the post-paid segment declined by 1,7% to 5,3m due to handset supply chain challenges, MTN said. Handset revenue plummeted by 27,5%, although the company expects this will improve in the second half, supported by changes in its logistics operations.
Outgoing voice revenue in South Africa decreased by 0,4%. But data revenue growth was a bright spot, improving by 26,6%. The number of smartphones on its network increased by 9,1% to 5,8m, and the number of data users increased by 18,1% to 17,3m. The growth in smartphones and data users was constrained by the handset supply problem.
Ebitda margin expanded by 2,3 percentage points to 35,6% — opposite to declining trend at group level. Ebitda is a measure of operating profit and is short for earnings before interest, tax, depreciation and amortisation.
Capital expenditure was R4,7bn, 133,9% up on last year. During the six months to end-June, MTN added 267 new 2G sites and 1 939 largely co-located (shared) 3G sites and 1 891 4G/LTE sites.
In the second half of the financial year, to end-December 2015, MTN said a key focus in South Africa is on “building staff engagement and improving customer service”.
“The operation will also accelerate its capex plans to support medium term growth prospects, particularly in the data area.”
Group wide, MTN reported a 3,4% increase in subscribers to 231m. Revenue decreased by 4,9% to R69,2bn, largely due to currency fluctuations. In constant currency terms, revenue was up by 0,7%.
Group data revenue was up by 21,3% to R15,4bn. Voice and data traffic grew by 11,2% and 87% respectively.
The group’s Ebitda margin declined by 2,6 percentage points to 43,7%, while Ebitda itself tumbled by 10,1% to R30,3bn (down by 4,2% in constant currency terms).
MTN Nigeria, its biggest operation, experienced a “difficult” six months as a result of “unfavourable macroeconomic conditions and operational execution challenges resulting in declining revenue and higher costs”.
MTN Irancell, meanwhile, delivered a “strong performance supported by data growth”.
Group headline earnings per share fell by 10,3% to R6,54. MTN declared an interim dividend of R4,80/share. — © 2015 NewsCentral Media