If there were any doubts that MTN South Africa is under severe pressure, the latest quarterly numbers from the mobile group will put them to rest.
The South African mobile business shed 825 000 customers between the end of December and the end of March, while average revenue per user slumped by 11,4% over the same three-month period.
The numbers help explain MTN’s recent move to slash prepaid rates — on a promotional basis for three months — from R1,20 to just 79c/minute. MTN has said it intends making the 79c rate permanent.
“MTN South Africa continued to focus on regaining relevance in the prepaid segment and maintaining its post-paid market share,” MTN told investors in an update on its performance for the first three months of 2014. “Overall subscriber numbers reduced by 824 768 bringing total subscribers to 24,9m at the end of the quarter.”
The group blamed the decline in subscriber numbers in South Africa on the disconnection of 973 064 customers who had been showing activity but not generating revenue.
“The post-paid segment delivered a satisfactory performance, growing subscribers by 3,7% to 5,2m. This was supported by continued growth in telemetry Sims, segmented marketing campaigns and attractive converged offers,” it said.
“While the prepaid segment remained challenging, the introduction of MTN Sky (an unlimited prepaid bundled price plan) and the launch of a new prepaid voice promotion of 79c/minute for both on-net and off-net calls in the second quarter, are expected to deliver improved subscriber performance.”
MTN said data continues to support revenue growth, increasing by 13,3% year on year and now contributing 22,8% to the top line.
Data subscribers increased to 14,5m, largely due to competitive data packages and the launch of the low-cost Steppa smartphone.
Average revenue fell to R100,47/user.
The MTN group had 210,1m subscribers on its books at the end of March, an increase of 1,1% from 31 December. — (c) 2014 NewsCentral Media
