Cellular chase
MTN argues that the financial effect of the Investcom buyout cannot be assessed just by combining their last results and saying, “One plus one is two”. Quite right too, which makes it almost pointless to issue those figures.
The cellular industry can move with breathtaking speed in countries with a pent-up demand, which is the case in pretty much all the areas where MTN and Investcom operate.
The more cash an operator throws at its infrastructure and marketing, the more money it reaps. It’s capital intensive and it has to be done correctly, but MTN has yet to put a foot wrong.
The main concern in its subscriber figures is a decline in the average revenue per user. Nigeria showed a year-on-year dive from $40 a month to $19. But over the same period it signed up 3,4-million new users, from 5,5-million to about 9-million.
True, it fared better when fewer users spent way, way more, but its margins could afford a cut and $19 still works wonders on the bottom line. Of Africa’s 900 million people, only 113,5- million are cellphone users. Not all will be easy to reach and most will not spend heavily. But there is phenomenal growth ahead, which MTN is right to chase.
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