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MTN aims to add 8m subscribers this year

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 08 Aug 2016
Since October 2015, MTN has lost 18 million subscribers across its 22 operations due to subscriber registration processes.
Since October 2015, MTN has lost 18 million subscribers across its 22 operations due to subscriber registration processes.

The MTN group plans to add eight million new subscribers by the end of its financial year, with 1.1 million of those coming from SA.

This after a tough year for the telecoms giant, which was forced to disconnect 18 million customers across the group, in the past nine months, as part of new regulations in a number of its operations.

MTN struggled to add many new subscribers during the six months to 30 June 2016, reporting a fairly flat 232.6 million total subscribers compared to 232.5 million in December 2015. This as subscriber registration processes in a number of its territories put pressure on customer numbers by forcing non-complying subscribers to be dropped.

The group was forced to disconnect 6.6 million subscribers over the six-month period in Nigeria, Uganda and Cameroon. Since October 2015, approximately 18 million subscribers across the group's 22 operations were disconnected to ensure compliance with various subscriber registration processes.

Executive chairman Phuthuma Nhleko says that as far as customer disconnections are concerned, he believes the group "broke the back of this last year" to become as compliant as possible.

"In past years, we have sometimes added 20 million subscribers, but of course because of all of these very significant disconnections, we have had to start from a very low base and reconnect those subscribers, so we are hoping to add eight million subscribers by the end of the year," he said at the group's interim results presentation on Friday.

Compliance review

Compliance issues burned the mobile operator in its biggest market, Nigeria, last year. After not meeting a regulatory deadline to disconnect 5.1 million subscribers, MTN was hit with a massive N1.04 trillion (R71 billion at the time) fine from the Nigerian Communication Commission, in October last year. After months of discussions, in June the group managed to negotiate the fine down to N330 billion (R25 billion at the time), which it will pay over the next three years. N80 billion has already been paid.

Group CFO Brett Goschen believes the resolution of the Nigerian fine closes a "tough chapter in MTN's history".

"The past six months have clearly been very difficult. On the positive side, however, a number of challenges we faced in the first half are now behind us," he notes.

MTN group COO Jyoti Desai says "on the back of the Nigeria incident" the group has undertaken a compliance review of subscriber registrations across its operations.

"[Across MTN's operations] we have aligned the management of subscriber registrations to the regulatory requirements. We are ensuring that as the operations come towards compliance, there is an engagement with the regulators on issues that require clarity and that those that should be disconnected are disconnected," she says.

Customer cuts

MTN Nigeria disconnected its last batch of 4.5 million subscribers in February, while MTN Uganda and MTN Cameroon were also impacted by subscriber registration requirements during the last six months.

"If you look at Cameroon, learning from what we did in Nigeria, we had an almost 98% successful registration rate in Cameroon," says Desai.

MTN now has 58.9 million subscribers in Nigeria and hopes to boost that by at least another 800 000 by the end of the year. MTN aims to add 1.8 million customers in Ghana, one million in Cameroon and 475 000 in the Ivory Coast during the second half of 2016.

MTN Uganda increased its subscriber base by almost 11% for the six months to June, to 9.9 million, boosting its numbers back up after it was forced to disconnect 3.7 million subscribers in the second half of 2015. MTN Uganda aims to add 950 000 more in the second half of 2016.

MTN South Africa's subscriber numbers dropped 2.6%, to 29.8 million ? mainly as a result of strong competition and economic pressure in a highly penetrated market. The prepaid and postpaid segments declined by 2.7% to 24.7 million and 2.1% to 5.1 million, respectively.

In SA, MTN remains in second place in terms of subscriber numbers behind Vodacom's 35.1 million customers. Cell C has around 24 million subscribers, while Telkom trails the pack with 2.7 million mobile customers.

In general, MTN SA reported "a lower-than-expected performance" in the first half of the year, which the group says was negatively impacted by network outages in some areas, competition and economic pressure on consumer spending.

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