Could MTN South Africa be falling victim to the fierce price competition in the mobile industry? Its latest subscriber numbers suggest this might be the case.

In the first quarter of 2013, the operator shed 1,9% of its customer base, dropping from 25,4m subscribers at the end of December 2012 to 24,9m at the end of March 2013. Subscribers are defined as Sim cards in active use.

The business recorded 470 000 net disconnections in the first quarter in what it describes as a “traditionally weak period”. Year-on-year, however, subscriber growth was 9,7%.

“After a strong 2012, the past quarter was characterised by a weaker consumer environment as well as increasing pricing competition,” MTN Group says in a statement to shareholders about its latest customer numbers. It says the decline in the number of subscribers in South Africa was “further exacerbated by the strong subscriber growth recorded in the last quarter of 2012”.

The group says that over the past year, the average price per minute declined by 5,5%, placing pressure on revenue growth at its South African business.

Average revenue per user (Arpu) declined by 8,1% to R110,62/month due to promotional activities and the decline in effective tariffs. Prepaid Arpu fell by 9,6% and contract Arpu by 6,3%.

There was “some sign of an improvement” in subscriber numbers and revenue at the end of the first quarter.

Despite the weak numbers, MTN claims it has maintained its market share.

Meanwhile, MTN’s biggest market, Nigeria, performed better, recording an 8,1% quarter-on-quarter improvement in subscriber numbers to 51,3m. Arpu fell by 1,8% in Nigerian currency.