The number of subscribers on MTN South Africa’s network declined by almost 3% to 29,8m in the first half of 2016, parent MTN Group revealed in its interim financial results for the six months ended June 2016.
The prepaid and post-paid segments declined sequentially from the second half of 2015 by 2,7% and 2,1% to 24,7m and 5,1m respectively, MTN said in notes accompanying the results, which were published on Friday morning before markets opened.
Despite the decline, revenue increased by 5,1% as a result of higher device sales — which, in turn, depressed operating margins — as well as strong demand for data, where revenue climbed by 19,2% compared to the same six-month period a year ago.
MTN said the good data revenue performance was the result of continued investment in 3G and 4G/LTE network infrastructure, coupled with attractive data and digital value propositions.
South African service revenue increased by 0,7%, while margins — calculated using earnings before interest, tax, depreciation and amortisation — fell by 5,5 percentage points to 30,1%.
“Growth in outgoing voice revenue remained a challenge, impacted by a 48-hour network outage affecting approximately one million subscribers in February 2016 and higher churn in the post-paid segment,” MTN said.
MTN blamed the “lower than expected” performance from its South African operation on network outages, competition and economic pressure that impacted on consumer spending.
Total South African revenue increased by 5,1% to R19,8bn, mainly as a result of higher data and device revenue growth. This was partly offset by a 6,1% decline in outgoing voice revenue. Service revenue, which excludes device revenue, remained relatively flat.
Data revenue contributed 34,1% to total revenue.
The number of smartphones on the network increased by 18,4% to 9,3m, while megabytes per user increased by 53,8%.
Digital revenue gained momentum and contributed 13,5% to data revenue. This was attributable to additional services being offered, including international content, MTN said.
Capital expenditure in the six months was R4,8bn, much of which went into the roll-out of 369 co-located 3G sites and 284 LTE sites.
“The operation continued to improve quality and capacity of the network in key cities to cater for increased data traffic. In addition, 175 sites were connected to fibre.”
MTN said fibre-to-the-home connections remain a priority, with approximately 10 000 homes passed, of which 40% was rolled out in the past six months. — © 2016 NewsCentral Media