All of MTN's global operations, except those in Iran and Syria, have seen margins decrease by a total of 1.8%, during the six months to June 2008.
SA's margins are down 2.2%, of which MTN chief financial director Rob Nisbet attributes 1.7% to sales and distribution.
Group president and CEO Phuthuma Nhleko, speaking at the group's interim results presentation today, said the squeeze on EBITDA margins was caused by inflationary pressure in most emerging markets. Factors such as adverse economic climates, the cost of fuel, specifically in Nigeria, and the competitive increase in salaries also caused margins to slide.
"We are always trying to find new ways of being innovative and keeping operational expenditures down."
However, the Iranian operations have shown a boost in EBITDA margins by 71.4%, while the Syrian operation was also up by 0.4%.
People onboard
The MTN Group highlighted an increase of 53% in subscriber numbers, to 74.1 million from June last year.
The highest percentage increase was seen in the West African and Central African markets, with 44%. The subscriber base of the Middle East and North African markets shot up 28%, and the South and East African markets showed the same growth. Total subscribers in SA are now at 15.5 million, an increase of 16%.
Iran, for a single operation, again showed the highest increase of 485%, rising to a total of 11.5 million subscribers.
"I'm pleased with the strong growth in subscriber numbers across all our operations. As the market becomes more competitive, we continue to explore ways of maximising our revenue and continue to provide reliable network services to consumers," says Nhleko.
Regulatory pressures
The group's revenue is up 35%, to R46.1 billion, compared to the six-month period last year. The adjusted headline earnings per share also increased by 26%, to 408.5c, compared to the same period last year.
The SA and East African market has shown year-on-year revenue growth of 18%.
Nhleko noted that SA's primary obstacle is the regulatory environment, as MTN is still awaiting a mobile licence conversion from the Independent Communications Authority of SA (ICASA).
"We have trouble with certain provisions on the draft licence ICASA has presented. We have not signed off on this yet."
According to Nhleko, the company also has trouble with ICASA's newly-introduced handset subsidy regulations. "The shorter period for handset subsidies will have an impact on our business, as well as the consumer."
Nhleko did not elaborate on what that impact would be.
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