MTN hit on all fronts
MTN Group has acknowledged that an increase in competition and the continued strength of the rand in the first half of the year, have impacted on its interim results report.
Despite this the mobile operator managed to post a 9.4% increase in revenue to R56.5m in its interim results to end June 2011- boasting a healthy dividend ratio that has increased by 65%.
The group says it’s impressed with the improvement in results, Group CFO Nazir Patel pointed out that due to the increased strength of the rand it’s had an R4.7bn write off from its revenue. Increased competition in all markets also rattled its performance slightly.
Sifiso Dabengwa, MTN Group President and CEO, says that maintaining and growing its market share has become harder, adding that “penetration levels still offer growth opportunities”.
Dabengwa stressed that the mobile operator will continue to seek other growth opportunities whilst at the same time impacting on customer experience. The group’s total subscriber base grew to 152m.
Growth on the local front increased by 5.1% to 19.8m, which has been attributed to the company’s prepaid segment boosted by MTN Zone Mahala offerings and strong promotional campaigns.
The group was not only hit by local competition, from the likes of Vodacom and Cell C and the new kid on the block , 8-ta, but also in Nigeria.
“Extensive pricing competition” rattled the Nigerian market which was once its cash cow, eating into the company’s market share and subsequent profit.
But Dabengwa remains confident that the group will find its way out of the tariff price war in the West African market.
“We are well on our way to securing our way back in terms of market share and gross adds (subscriber connections). Our goal is to increase traffic and decrease tariff prices and add on to the extensive competition in the market,” said Dabengwa.
MTN Group says the Nigerian market performance was “satisfactory …during the period under review”.
Nigeria much like South Africa has a SIM card registration Act in place similar to RICA.
The Nigerian deadline for all SIM card registrations falls on September 28 but will likely to be extended as MTN has only half of its subscribers registered to date.
The company’s performance in Syria was hit by political unrest.
Sifiso Dabengwa
Broadband
Data offerings have been highlighted as the latest revenue driver for mobile operators, and MTN says it remains committed to boosting its broadband offerings, by decreasing data costs on the consumer and offering more affordable smartphones that enable easier internet access.
It recently launched its trial LTE network that will provide faster and more reliable internet connections.
Dabengwa says whilst the network operator’s performance has been less impressive than some of its peers on the broadband front, he says that the recent broadband price war will enhance the competitiveness of the industry and work to the benefit of the consumer.
Source: Moneyweb
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