Africa's largest cellular operator, MTN, has lost almost 5% of its South African subscribers in the last three months, as group subscriber growth slowed to 5% in the third quarter.
It says the decline is a result of the SIM card registration Act - the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA). As a result, it does not anticipate any subscriber growth from the local operation for the year, expecting previous gains to be offset by losses.
The cellular company's breakdown of subscribers shows it lost 4.7% of its subscribers in SA, which accounts for 20% of its revenue. Local subscriber numbers went from 17.2 million at the end of June - the company's half-year mark - to 16.4 million just three months later.
Most of its loss was in the prepaid segment, where 6.2% of its subscribers migrated away from the company, negating the 3% gain it made in contract subscribers.
The decline in subscriber numbers resulted in regional growth for South and East Africa being a “modest” 5%. This, says MTN, is due to the “disappointing negative movement of the South African subscriber base, which contributes 64% of the total subscriber base in the region”.
The main reason for the disconnection of over 800 000 subscribers in SA was the “the significantly lower number of gross connections, following the implementation of RICA”, MTN says.
Economic pressure
In June, MTN blamed poor growth of 62 000 in its local subscriber base on “a combination of factors, including challenges on the network and supporting systems, slowing GDP growth, pressure on consumer spend, and competitor activity in the first half of the year”.
Contract subscribers grew 4%, to 2.9 million in the first half of the year, but the market was under pressure due to the economic crisis that limited credit spending. The prepaid subscriber base declined 52 000 during the first six months of the year.
At group level, MTN says it added just over five million subscribers in the three months to September. So far, for the year, the company's subscriber numbers have grown 19.6%.
At the end of June, MTN passed the 100 million milestone, and said it had 103.2 million subscribers. This was a 14% increase in the six months from the end of December, and a year-on-year increase of 39%.
Imara SP Reid analyst Stephen Meintjes says it is too early to say if MTN has lost market share, as the company's figures will need to be contrasted with those of Vodacom's, which should report its half-year results on 9 November.
Share