SA: MTN Group Driven by Strong Subscriber Acquisition and Data Take-up

CAPE TOWN, South Africa, March 8, 2012 /PRNewswire/ — Despite the implementation of compulsory SIM card-registration in most of its operations, and intense competition, MTN Group has experienced an impressive increase in subscriber numbers; this has offset the detrimental effects of the social unrest in the Middle East and African regions.

MTN Group released results for the year-ended 31 December 2011, reporting a 16.2% growth in group subscriber numbers to 164.5 million, and a 6.3% increase in revenues to R121.884 billion. The group’s adjusted headline earnings per share increased 43.2% to 1,070 cents.

“MTN South Africa (SA) has recorded 22 million subscribers, representing a growth rate of 16.9%,” states Frost & Sullivan’s Information and Communication Technologies Research Analyst Mervin Miemoukanda. “This is impressive in a saturated market, and can be attributed to the company’s many promotional campaigns.”

However, the company has a lot of work ahead because most of these new subscribers are multiple SIM card holders. They are, therefore, more likely to become inactive subscribers in the following months.

MTN SA has witnessed a dramatic growth rate in terms of data revenues, which increased up to 27.7%. Their 3G network expansion, across the country, is a positive indication that the company has shifted their focus to data services, as voice service revenues have been declining year-on-year.

However, with the current price wars on data services in the country, MTN SA’s data revenue is likely to grow at a slower rate in the short term, if no strategies are put in place to boost broadband subscriptions.

MTN’s mobile money service will drive the uptake of mobile money services in Nigeria, believes Miemoukanda. “This service is expected to boost revenues in MTN Nigeria’s revenues, as the company has a strong customer base and extensive distribution channels in the country.”

With the establishment of MTN Business in Ghana, MTN Ghana is likely to increase its data revenues, despite the company being a late comer in this sector.

Possible restraints to the future growth of MTN Group will most likely take place in Iran, which accounts for approximately 20% of its overall subscriber base. With the recent economic sanctions imposed on Iran by the European Union and the United States of America, MTN Group is likely to freeze its expansion investment plans, which may hamper its growth.

With uncertain prospects in the Middle East, particularly in Iran, Syria, Afghanistan and Yemen, MTN Group should invest in network expansion in the remaining countries to boost subscriber acquisitions.

MTN Group is likely to enjoy healthy growth rates in terms of subscribers and revenues in 2012 because the SIM card-registrations in key markets such as Nigeria and Ghana will no longer have a detrimental effect on its subscriber growth. In addition, the increased uptake of data services across its operations as well as the launch of mobile money in the remaining operations will help increase its revenues.

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Samantha James
Corporate Communications – Africa
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Source: Frost & Sullivan – Press Release – 9 March 2012