MTN fends off competition

Johannesburg, 24 Apr 2008

Locally-listed cellular operator MTN continues to deliver double-digit subscriber growth in spite of an "increasingly competitive environment".

In a formal release yesterday, MTN group president and CEO Phuthuma Nhleko said he was pleased with the "steady subscriber growth" which saw customer numbers grow by 11% in the quarter ended 31 March.

Despite the company`s continued delivery of subscriber growth, MTN`s share price took a dip in mid-afternoon trade. At one point, MTN`s share price had lost 2.5% in value; however, it recovered to end 8c up on Tuesday`s close of R135.90.

At home

The breakdown of subscriber numbers reveals the South and East Africa (SEA) region delivered 4% growth to 20 million; West and Central Africa (WECA) region increased by 9% to 30.5 million; and the Middle East and North Africa (MENA) area boosted numbers by 26% to 17.7 million subscribers.

SEA numbers continue to be dominated by SA, with 15 million customers; however, growth has slowed to a rate of 3%. The increase, says MTN, is largely attributable to variable price offering, MTN Zone. By the end of March, this product already had 3.8 million subscribers.

Commenting on the 3% decrease in SA`s blended average revenue per user (ARPU), MTN said indications were that rising inflation had not "meaningfully affected ARPU to date". However, it warned this could potentially have an impact in the future.

Into Africa

Nigeria continues to be MTN`s highest subscriber producer, with 17.8 million customers. Contributing 58% to the WECA numbers, the country delivered an 8% increase.

Said MTN: "There was increased focus on network roll-out in Nigeria and Ghana, with 285 and 182 base stations rolled out in these countries, respectively. The aggressive network roll-out has resulted in meaningful progress in addressing the quality and capacity challenges."

Ghana`s subscriber base increased 9%, to 4.4 million customers.

The company noted that ARPUs in Nigeria, Ghana and Cameroon "remained robust" despite decreasing in line with seasonal trends and increased penetration.

Tackling Iran

The significant growth in MENA`s subscriber numbers was predominantly driven by its performance in start-up operation Iran. Here customers grew by 50% to nine million.

At first glance, this number appears lower than the 9.4 million declared last month; however, MTN revealed the March numbers "incorrectly included unactivated SIM cards given away as part of the buy one get one free promotion".

Strong subscriber growth was achieved in Sudan and Afghanistan with 13% and 22%, but this was driven off a low base. However, ARPUs were negatively affected by 37% and 40%, respectively, due to competition and tariff reductions.