MTN CEO Rob Shuter believes the group can grow its customer base to 300 million customers by 2020, adding around 68 million customers over the next three-and-a-half years.
Shuter, who joined MTN as group CEO and president on 13 March, revealed the goal at the group's interim results presentation in Johannesburg last week.
Currently MTN operates in 22 countries in Africa and the Middle East, and at the end of June, had a total of 231.8 million subscribers across its footprint. The telecoms operator saw group subscribers drop 3.6% over the first six months of the currently financial year ? partially impacted by MTN's new initiative to modernise its subscriber definitions to better reflect truly active customers.
As part of a long-term vision for the business, Shuter explained his targets for subscriber growth under what he calls the "100, 200, 300 strategy".
"[By 2020] can we have 300 million customers as opposed to the around 230 [million] now? That means population growth but also market share gains, so we need to outcompete the competition. Of the 300 million can we have 200 million active data customers? That's two-thirds of the base; today we have around 72 million of 230 million. And finally, of the 200 million can we have 100 million actively using an MTN digital service?
"So we are basically going from an 18, 72, 230 world to a 100, 200, 300 world. We know that if we execute that deliberately, if we keep an eye on the opex and capex and manage the business well ? I think we can really generate a very good performance out of the company. Exactly how we model that out over the next three years, we will have to see how we tackle that," he said.
Shuter explained the target is based on demographic trend predictions which underpin growth across MTN's markets. This includes general population growth in these countries, with particular focus on the potential rise in both data and digital subscribers for all mobile operators that operate in those geographies.
MTN estimates that by 2020, the population size in the 22 countries it operates in will grow by 45 million people to around 700 million in total.
"The second thing we are forecasting is actually that the consumption power of consumers in our geographies is going to improve as we move through the recessionary patterns, the poor macro [environment], the low oil prices and pressure on commodity prices. In general, we would like to see that lifting up over the next few years and that is obviously a very key metric when we are thinking about appetite for new services and for data affordability," he said.
The consumption per capita across its footprint is forecast to rise by $40 (R536) to $1 243 (R16 670), which means citizens will be consuming and spending more. Another key trend will be the accelerated adoption of data and digital services across the 22 markets. By 2020, overall data subscribers are predicted to grow by 200 million, to around 500 million across the footprint, and digital customers will rise by 150 million to a total of 250 million.
"If you look at these big growth engines of data and digital, MTN has already made a very good start with already 72 million active data customers across the portfolio. What is also really encouraging is the progress in MTN Mobile Money, where we now have 18 million 30-day active customers," he said.
Revenue pools
Shuter says the consumer market will likely remain a big part of MTN's revenue pools across its markets, and is estimated to still be around 70% of revenue up until 2020.
MTN predicts that across its 22 markets by 2020, there will be a total revenue pool for telecoms operators of R575 billion in the consumer market, R210 billion in the enterprise market and around R30 billion in the wholesale market.
"So how is the group placed in a future that looks like this? Of course, we would say we are well placed, what else would you expect us to say? But I think it is true that the 22 markets we are in, are in general the right markets for us to be in. We are in the big markets for our geographies of Africa and the Middle East. I also think it's true that we have a good position in these markets. We are the number one operator in 14 of the 22 markets we operate in," said Shuter.
MTN's group revenue for the six months to June decreased by 18.5% to R64.3 billion. In constant currency terms, however, revenue grew by 6.7%, underpinned by 10.8% growth in revenue in Nigeria and a 5.2% organic growth in service revenue in SA. The group, however, saw headline earnings per share swing to a profit of 217c compared to a 271c headline loss per share reported in the previous comparable period.
MTN's 22 operations are in SA, Uganda, Zambia, Rwanda, South Sudan, Botswana (joint venture), Swaziland (joint venture), Nigeria, Ghana, Cameroon, Ivory Coast, Benin, Congo-Brazzaville, Liberia, Guinea-Conakry, Guinea-Bissau, Iran (joint venture), Syria, Sudan, Yemen, Afghanistan and Cyprus.
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