MTN adds 4m subscribers as key markets perform well

MTN Group had 236.6 million subscribers on its books at the end of its financial first quarter, to 31 March 2019, up from 232.6 million at the end of December, with the telecommunications operator reporting strong operational performances in South Africa, Nigeria and Ghana.

The group delivered 10% year-on-year service revenue growth, supported by these three key markets.

“We are encouraged by the operational progress we continue to see across the business, supported by the network roll-out we achieved and enhancements to the propositions that we offer to our customers,” said group CEO Rob Shuter in a statement.

“In South Africa, we implemented changed pricing for prepaid propositions where we reduced, materially, the out-of-bundle tariffs, making data services much more affordable.”

Group chief financial officer Ralph Mupita said MTN is “pleased by the service revenue development, despite challenges in some markets”.

“The growth in service revenue was supported by the continued expansion in voice, data and fintech revenue, which increased 5.9%, 18.3% and 30.6% respectively,” Mupita said. “Our asset realisation programme remains on track, and we anticipate that the Mascom transaction (in Botswana) will close by end of June 2019, subject to regulatory approvals.”

South Africa

Group active data subscribers increase by 2.6 million quarter on quarter to 81.3 million, while active MTN Mobile Money customers grew by 1.2 million to 28.3 million.

MTN South Africa service revenue increased year on year by 4.6%, with an earnings before interest, tax and depreciation (Ebitda) margin of 38.8%. Nigeria service revenue increased year on year by 13.4% with an Ebitda margin of 53.3%.

Currency markets were favourable in the quarter, resulting in reported service revenue growth higher than constant-currency rates. Quarterly capital expenditure was R5.4-billion.

One weak area was in digital services, where revenue declined by 45.4%. MTN blamed “work that continues around optimising our value-added services business” for the under-performance.

MTN South Africa recorded year-on-year service revenue growth of 4.6%, within the medium-term guidance range of mid-single-digit growth. The South African performance was “buoyed by a strong performance from our wholesale business”. This was strongly aided by Cell C’s decision to roam on MTN’s network outside the cities.

South African data and fintech revenue increased by 3.1% and 21.1% respectively, while digital and outgoing voice revenue declined by 35.7% and 4.4% respectively.

“Given out-of-bundle price reductions taken in the period, and a challenging economic environment, prepaid service revenue decreased by 5.1%. As previously communicated, we expect that prepaid service revenue will remain under pressure for a few quarters, before we see recharge resilience and changes in customer behaviour drive up in-bundle service revenue.”

Consumer post-paid service revenue increased by an “encouraging” 11.5%. “The enterprise business continued to stabilise and the wholesale business recorded excellent growth with contribution from both Telkom and Cell C roaming traffic.”

At the end of the quarter, MTN South Africa had 24.1 million prepaid users (down 4.9% from the end of December), 5.9 million post-paid subscribers (+1,2%) and three million Internet of things subscribers.

MTN Nigeria, meanwhile, reported a strong quarter, with service revenue increasing by 13.4% year on year. This was led by a 32.4% increase in data revenue and a 12.7% increase in voice revenue. Total subscribers increased by 3.6% quarter on quarter to 60.3 million.  — © 2019 NewsCentral Media