MTN nears 100m subscriber mark

Mobile network operator MTN Group is touching the magical 100 million subscriber mark, with 98 202 000 subscribers recorded for the quarter ended 31 March. This is an 8% rise from the previous three-month period.

Edging up to the 100 000 0000 subscriber level is considered important as it is a key factor in determining whether MTN will continue as a major player in the region and globally. The group is facing increased competition from companies such as Zain and the revamped Vodacom-Vodafone alliance that is seeking to enter its traditional markets.

IDC analyst Richard Hurst says the MTN numbers are interesting as they also show that, while emerging markets are key drivers for telecommunications companies as demand remains strong, there is some disappointment over the average revenue per user (ARPU) numbers that continue to decline.

“We would have expected the increased use of data over the mobile networks would have started to kick in by now and arrested the ARPU decline, but that has not happened yet.”

Hurst says reasons for the limited influence of data services include the lack of bandwidth, the mistrust of such services by consumers and content providers, and the fact that people are spending less during the economic downturn.

“During such times, people will want a lot more value for their money and these numbers prove they have not yet seen the value in the mobile data services space. The mobile operators will have to do a lot of education for both consumers and content providers about this.”

According to an MTN Group statement, strong subscriber growth continues to be a feature in almost all countries in which it operates. However, currency volatility has generally had a more negative impact on ARPU. Also, the various economies' responses to the global economic situation markedly affected spending patterns.

The proportional subscriber contribution between the regions remained relatively unchanged at 31 December 2008. The South and East Africa (SEA) region contributed 26% (December 2007: 27%) of the group's total subscribers, while West and Central Africa (WECA) and Middle East and North Africa (MENA) contributed 45% (December 2007: 44%) and 29% (December 2007: 29%), respectively.

The SEA region increased its subscriber base by 4% for the quarter. The South African operation contributes 69% to the region's subscribers, increasing 2% to 17 428 000 for the quarter ended 31 March 2009.

“The modest increase in subscribers was due to the mix of seasonal trends, weakening economic conditions and aggressive competition. Uganda increased its subscriber base by 13% due to the continued success of MTN Zone,” statement says.

The WECA region increased its subscriber base by 10% for the quarter. This was primarily due to growth in Nigeria, which contributes 59% to the region's subscribers and recorded a 12% increase in its subscriber base, to 25 908 000.

MTN says this was mainly due to continued improvements in network quality and capacity, with 173 base stations added in the quarter. Ghana increased its subscriber base by 5%, despite fierce competition. Both Cameroon and Cote d'Ivoire increased their subscriber bases by 7%, to 3 824 000 and 3 810 000, respectively.

The MENA region recorded a 9% increase for the quarter. This was due to continued growth from the Iran operation, which contributes 63% to the region's subscribers and increased its subscribers by 14%, to 18 252 000. The disappointing slowdown of subscriber acquisitions in Sudan and Syria is mainly attributed to the economic downturn in the respective countries. Sudan increased its subscriber base to 2 658 000, while Syria experienced negative growth of 3%, to 3 428 000 subscribers.

MTN SA's blended ARPU (which includes voice and data traffic) decreased by 6%. This is as a result of increased penetration into lower market segments, seasonal trends and a slowdown in consumer spending.

Iran's ARPU remain relatively stable, notwithstanding seasonal trends and increased penetration. The decline of many local currencies against the US dollar has negatively affected ARPU trends. Larger operations, including Nigeria, Cote d'Ivoire, Syria and Sudan, experienced significantly more resilience in local currency ARPU than reflected in the reported US dollar number.