MTN has published its quarterly trading update for the period ended 31 March 2019, which shows a drop in subscriber numbers for South Africa.
The results reflected a net loss in subscribers and prepaid service revenue in South Africa, although the number of postpaid subscribers increased by 1.2% in the quarter.
MTN South Africa attributed its 5.1% decrease in prepaid service revenue to recent out-of-bundle price reductions and a challenging economic environment.
“We expect that prepaid service revenue will remain under pressure for a few quarters, before we see recharge resilience and changes in customer behaviour drive up in-bundle service revenue,” MTN said.
“Consumer postpaid service revenue increased by an encouraging 11,5%.”
MTN South Africa said it had 24.1 million prepaid users, down 4,9% quarter-on-quarter, and 5.9 million postpaid subscribers, up 1,2% quarter-on-quarter.
Revenue growth and ARPU
MTN said it recorded an overall service revenue growth of 4.6% year-on-year, with data revenue increasing by 3.1%.
Digital and outgoing voice revenue declined by 35.7% and 4.4% respectively, while fintech revenue grew by 21.1%.
Average revenue per user (ARPU) in South Africa decreased from R101.32 in the fourth quarter of 2018 to R93.04 in the first quarter of 2019.
Postpaid ARPU decreased from R281.10 to R278.50, while prepaid ARPU dropped from R80.50 to R71.72 during the period.
MTN South Africa’s margin on EBITDA for the first quarter of 2019 was 38,8%.
The company said its enterprise business continued to stabilise and its wholesale business recorded excellent growth with contribution from Telkom and Cell C roaming traffic.