MTN Group shares fell in Johannesburg on Wednesday after it said subscribers in its key Nigerian unit grew by only 0.1% in the quarter ended 30 September and capital expenditure rose.
Quarter on quarter, MTN Nigeria added only 100 000 subscribers, bringing the total to 61.6 million. The unit’s CEO, Ferdi Moolman, blamed a Sim re-registration exercise for the slow growth as it was forced to disconnect about 600 000 active subscribers.
Capex also rose sharply, up almost 40% year on year to 154.1-billion naira, as the company expanded its 4G/LTE network.
Group shares were changing hands at R92.16 apiece at 11.30am, down 2.8% on the session.
Highlights for the nine-month period to end-September include:
- Active data users increased by 1.6 million to 22.3 million;
- Service revenue increased by 12.1% to N854.9-billion;
- Earnings before interest, tax, depreciation and amortisation grew by an impressive 39.3% to N460.1-billion, which was ahead of revenue and inflation; and
- Ebitda margin increased by 10.5 percentage points to 53.7%.
“Our performance was very encouraging, demonstrating the resilience of our business despite a challenging operating environment. We sustained double-digit growth in service revenue led by growth in voice and data revenue,” said Moolman in a statement to group shareholders.
“During the quarter, we focused on the end-to-end optimisation and re-positioning of our data offerings. We made significant investments in accelerating 4G network expansion; and, leveraging 800MHz spectrum activated in the second quarter of 2019, we launched enhanced 4G+ services in Lagos, Abuja and Port Harcourt.”
The company also changed its pricing strategy, “placing us in an even stronger competitive position going forward”.
“As a result, we have begun to see promising results with active data subscriber net additions of 1.6 million and 4G population coverage at over 35% in 64 cities. Data traffic volume also increased by over 68%, while data revenue rose by 34.9% year on year.”
Voice, however, remains a key contributor to service revenue at 73.5% (down marginally from 74.8% in the same period 2018), with its growth supported by an increase in subscribers, relatively stable tariffs and targeted offerings.
“In the remaining quarter of the year, we will continue to prioritise the expansion of our 4G network coverage and drive active data subscriber growth. We expect voice and data revenue to continue to grow on the back of subscriber growth and increasing demand for data services.” — (c) 2019 NewsCentral Media
