Africa's largest cellular operator, MTN, has revised is predictions of local subscriber growth for 2010 upwards.
The company had initially expected to add a net 800 000 subscribers to its South African base because of the effects of the SIM card registration Act. However, it has now added a further million new users to this figure, saying it has found its registration “rhythm”.
South African cellular companies were hard hit by the implementation of the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA). The Act requires operators to register every subscriber by the end of the year, or it will shut them off from the network.
Initially, operators struggled with implementing the new law, which came into effect about a year ago, and saw net subscriber additions decline as a result. Vodacom, MTN and Cell C are lobbying government for an extension of the deadline.
Vodacom still has to register about half of its customer base, according to figures the company presented in July. MTN did not provide an update as to how far the company is in registering its subscribers.
Speaking at what is likely to be his last interim results presentation for the group, outgoing CEO Phuthuma Nhleko said the group now has 129.2 million subscribers for the six months to June, an improvement on the full-year to December's 116 million subscribers.
Subscriber growth
MTN expects to add a total of 21.15 million new subscribers to its network during the 2010 financial year, a revision from its previous prediction of 20 million new users. So far, it has gained 13.2 million additions.
In SA, the company has a 36% market share, which is slightly off the 38% it had targeted. Much of the subscriber growth came from the prepaid segment, he says. MTN added a net one million new subscribers in the half-year compared with a one million decline for the last financial year to December.
The bulk of its subscriber growth is expected to come from Nigeria, where it expects to gain 6.35 million new users. This figure has increased from its previous prediction during its year-end results of six million.
MTN's guidance for the rest of the countries it operates in is mostly flat. It still expects to add 400 000 users in Syria, five million in Iran and seven million from the rest of the countries in which it operates. However, the company has revised its Ghana expectations down to 600 000 from 800 000 due to increased competition.
The company reported revenue 2.2%, down to R56 billion, during the half-year, while earnings before interest, tax, depreciation and amortisation declined 1.1%, to R24.2 billion. However, a continued focus on costs aided the company in growing adjusted headline earnings per share 20.6%, to 438.6c.
Nhleko says revenue growth was flat across the company due to the effects of the stronger rand, which all but negated gains made in local currency in its operating countries. However, a good performance in SA and Iran aided margin gain, which improved to 43.3% from 42.8% at the earnings before interest, tax, depreciation and amortisation level.
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