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    Home»News»MTN cuts off 4,5m subscribers in Nigeria

    MTN cuts off 4,5m subscribers in Nigeria

    News By Editor21 April 2016
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    Phuthuma Nhleko
    Phuthuma Nhleko

    Nigeria and South Africa have again served to put pressure on MTN’s subscriber numbers, with group customers declining by 1,4% quarter on quarter for the three-month period ended 31 March 2016.

    In Nigeria, subscribers fell by 6,9% quarter on quarter after its subsidiary there disconnected 4,5m customers in February related to the ongoing Sim-card registration compliance process that led last year to authorities imposing a record-setting US$5,2bn fine (later reduced to $3,9bn). That fine was imposed on MTN for failing to disconnect about 5m unregistered Sims in time for a regulatory deadline.

    MTN South Africa subscribers decreased by 1,7% from December 2015 as a result of “seasonality” and the “alignment of the subscriber base recently acquired from Autopage”, the group said in a statement to shareholders on Thursday.

    Group revenue for the quarter was, however, boosted by the significant year-on-year depreciation in the rand against a number of the operational currencies, MTN said.

    Constant currency data revenue increased by 20,1% year on year, contributing 24,2% to total revenue. Voice and data traffic increased by 12,1% and 123,3% respectively year on year.

    In a statement to shareholders, MTN’s executive chairman, Phuthuma Nhleko, said the group has taken an “exceptionally conservative stance” when dealing with Sim-card registrations in Nigeria and elsewhere by disconnecting all subscribers who could possibly be deemed to be noncompliant.

    “This has had a significant unfavourable impact on total subscriber growth and revenue in the first quarter of 2016. Nonetheless, we believe this resolve to address compliance matters decisively has put the group on a solid footing as regards the subscriber registration process and regulatory matters in general,” Nhleko said.

    “Further, the group has undertaken a number of ‘back to the basics’ structural and operational initiatives that will hopefully reset and position the group for future growth in a rapidly evolving sector,” he added.

    MTN said subscriber growth in the first quarter was also hit by a weak macroeconomic environment, particularly in markets reliant on oil exports. The trading environment was also highly competitive, it said.

    The group’s South African operation reported an “encouraging” performance despite the “marginal decline” in subscriber growth, with 30,1m customers at the end of March.

    “Improved data performance in South Africa was supported by significant investment in the network,” the group said. However, quarterly average revenue per user was negatively affected by an “extremely unfortunate” 48-hour network outage in February, which had a negative impact of 3% on revenue for the month. Billable minutes for the quarter declined by 11,3% year on year. March performed better, however, it said.

    This resolve to address compliance matters decisively has put the group on a solid footing

    Data contributed almost a third to MTN South Africa’s total revenue, supported by a 12% quarter-on-quarter increase in the value of data bundles sold as well as an increase in smartphones to 9,2m.

    “Improved 3G and LTE coverage supported a 29% increase in average revenue per user for those customers who moved from 2G to 3G and an increase of 19% for those customers who moved from 3G to LTE. Data usage increased by 58,5% year on year.”

    MTN Nigeria, meanwhile, reported a 6,9% quarter-on-quarter slide in subscribers to 57m due to disconnections of unregistered users.

    “We believe we have now dealt with all the subscribers who were considered to be noncompliant,” said Nhleko. “The operation continues to focus on reconnecting subscribers through proactive engagement and ‘win-back’ offers.”

    Worryingly, constant currency data revenue in Nigeria declined by 9,6%. This was mainly due to a change in regulatory requirements obliging operators to seek permission from customers to charge out-of-bundle rates upon the depletion of a data bundle, MTN said.

    MTN Irancell, meanwhile, increased its subscriber base by 1% from December to March to 46,6m. Constant currency data revenue increased by 70,9% quarter on quarter and contributed 39,3% to total revenue. Local currency average revenue per user decreased by 1,4% between end-December and end-March.  — © 2016 NewsCentral Media

    Irancell MTN MTN Irancell MTN Nigeria MTN South Africa Phuthuma Nhleko
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