MTN South Africa lost subscribers in the first half of the year and has admitted that it was “slow to respond to aggressive price competition” in both voice and data and that this was partially responsible for the company’s underperformance.

In the six months ended 30 June 2013, MTN’s South African unit had 25m subscribers, 400 000 fewer than at the end of December 2012.

“MTN South Africa felt the effects of weaker consumer demand and was slow to respond to aggressive price competition in both voice and data offerings,” it says in notes accompanying its interim financial results, published on Wednesday. The company chopped its call tariffs earlier this year.

“After a difficult start to 2013, which saw decreased subscriber net connections, the prepaid segment managed to regain some market share in the second quarter due to improved dormancy management and as customers responded positively to lower tariffs and increased promotional activity,” it says.

“The post-paid subscriber base performed well, increasing by 5,8% during the six-month period to 4,8m. This was driven by competitive data offerings and the success of hybrid and classic packages.”

Despite a “difficult operating environment”, it says the South African business maintained its relative value share among post-paid subscribers.

However, profit margin — measured using earnings before interest, tax, depreciation and amortisation — fell by 2,1 percentage points.

Revenue also fell, by 1,4%, to R20,1bn from R20,4bn in the first half of 2012. Airtime and subscription revenue declined by 4,4% to R9,4bn due to cuts in voice tariffs.

Average revenue per user (Arpu) in prepaid fell by 13,9% to R78,64 while post-paid Arpu decreased by 15,5% to R220,90.

However, data revenue, including MTN Business, increased by 14,7% to R4bn, contributing 19,9% to total revenue. Data pricing remained under pressure as the average effective price per megabyte decreased by 25% from 31 December 2012.

“Data revenue growth was supported by an increase in the number of mobile data users to 13,5m from 11,9m, attracted by a compelling value proposition and the efficient distribution of products,” MTN says. “Data revenue also benefited from the integration of MTN Business into the South African operation.”