MTN confident of Iranian growth

By Nicola Mawson, Contributing journalist

Johannesburg, 30 Mar 2007

MTN is hopeful it will reach 5.5 million people in Iran by the end of this year, despite not hitting its initial targets in the country.

CEO Phuthuma Nhleko says MTN was the first company to enter the country as it privatised the market. This factor, and a delayed launch, led to it missing its targets. However, Iran is expected to be a big contributor in future.

MTN now has 4.9 million subscribers in the Middle East and North Africa. The company has started two operations in the region, and acquired four geographical operations.

Nhleko says Iran will be a major driver going forward. MTN initially hoped to acquire a million subscribers by December. Iran had 154 000 subscribers to end-December. However, by March, it had 1.08 million subscribers. MTN is targeting 5.5 million by the end of this year.

The region has a population of 178 million and offers "high growth potential", due to low penetration rates, says Nhleko.

Key contributor

MTN says SA remains a key generator of income in South and East Africa. The region has 15.5 million subscribers, a 26% increase, with SA contributing 12.48 million.

Countries such as Uganda showed solid growth, says Nhleko, as it increased subscribers by 63%, despite being in operation for five years. The entire region has a population of 98.9 million and mobile penetration of 40%.

The operator increased its market share by 1%, to 36%, in SA, and saw an increase in prepaid average revenue per user (ARPU), while contract and blended ARPU was down.

More competition

Nhleko says the company is seeing rapid growth in West and Central Africa. MTN offers services to nine countries in the region, which has a population of 224 million. The firm has a subscriber base of 19.6 million, which is 80% up on the previous figures, due to acquisitive activity.

Nigeria, which contributes 12.3 million to MTN's subscriber base, saw a recovery in the second half of last year. Nhleko says the company lost some ground in the first half.

The country is becoming increasingly competitive, he says. MTN's tax holiday comes to an end at the beginning of next month and the fifth GSM licence was recently awarded. There is also uncertainty surrounding the outcome of the country's elections next month.