MTN Group has on Wednesday (14 August) reported that its total subscriber base for South Africa declined by 420,000 to 25 million in interim results for the six months ended June 2013.
In April, the group reported a net loss of 470,000 customers in the first quarter (from January 1 and March 31).
“MTN South Africa felt the effects of weaker consumer demand and was slow to respond to aggressive price competition in both voice and data offerings,” MTN said.
Overall group subscribers, however, increased 6.5% in the interim period, to 201.5 million, supported by competitive offerings and increased network capacity, MTN said.
The group said that revenue increased 9.8% to R65.248 billion, while operating profit grew marginally, to R19.596 billion, from R19.184 billion before.
Headline earnings per share increased 22% to 654 cents, and group ebitda increased by 6,4% to R27.743 billion.
MTN declared an interim dividend per share of 370 cents, up 15.3%.
MTN said its results reflect a challenging operating environment given the sustained global economic slowdown, highly competitive mobile markets and regulatory pressures, which have seen average voice tariffs across its markets fall 29.5% year-on-year (YoY) in US dollar terms.
MTN South Africa
“MTN South Africa felt the effects of weaker consumer demand and was slow to respond to aggressive price competition in both voice and data offerings,” the group said.
Total revenue for its SA operation declined by 1.4% to R20.146 billion, however, data revenue, including MTN Business, increased by 14.7% to R4.016 billion and contributed 19,9% to total revenue.
Handsets and accessories revenue grew by 16.0% to R3.023 billion. During the six-month
period, MTN South Africa sold 2.4 million pre-paid phones and 699,000 post-paid handsets.
Blended ARPU declined by 13.3% to R105.40 from R121.52 in June 2012.
Capex for the period in SA amounted to R2.151 billion with a focus on 2G and 3G coverage, quality and capacity. The 3G population coverage is now 67.7%, MTN said.
MTN said group data revenue increased by 36.9% as the number of data subscribers reached 65.4 million, an increase of 29.5% on the prior year.
Data contribution to total revenue was 13.9%, (18.0% including SMS) and the upward trend is expected to continue, it said.
Data subscriber numbers increased by 29.5% to 65.4 million and data traffic grew by 55.7%. “This was achieved through extending our 3G coverage as well as through the increased number of data-enabled devices, which have reached 122.2 million.
“Our network has 31.6 million smartphones in use and increasing smartphone penetration remains an important objective,” MTN said.
MTN said invested R12.792 billion into its network, an increase of 32.7%, bringing 2,130 2G and 1,800 3G sites on air.
Capex already committed for the second half of the year stands at R8.119 billion, the group said.
Over the first six months of 2013, voice traffic volumes increased 26.2% YoY and voice revenue grew 7.9%. Voice revenue now accounts for 63.7% of total revenue, down from 64.8% in 2012, MTN said.
On a YoY basis, the average price per minute (APPM) declined by 29.5% in US dollar terms.
The group said its MTN Mobile Money and financial services offering continues to gain traction in existing and new markets and had almost 12.1 million users at the end of June 2013, a YoY increase of 64.5%.
Looking ahead, MTN said it expects to deliver improved YoY organic growth in both revenue and ebitda.
“The recovery in our Nigerian operation is expected to continue over the second half, supported by a strong capital expenditure programme. We expect the group to add a total of 21.1 million subscribers for the full 2013 year.”
In the medium term, the group said it will also continue to leverage its inherent strength in adjacent industries and explore value accretive M&A activities.
[Edit: The original article said that MTN’s South African customers had declined by 600,000 – this was inaccurate and has been corrected to a decline of 420,000 customers as per MTN’s report.]