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Political instability shakes MTN Middle East business

August 18, 2011 • Mobile and Telecoms, Top Stories

MTN Group is facing a challenging business environment in the middle east due to the political instability in Yemen and Syria.

Sifiso Dabengwa, MTN Group Chief Executive Officer

In Syria, MTN airtime and subscription revenue as well as interconnect revenue showed negative growth as a result of lower subscriber growth and network service interruptions. Reported ARPU declined by 13.9% to $14.1 and local currency ARPU decreased by 12.5%.

This was revealed during the company’s mid-term financial results announcement held today in Johannesburg, South Africa.

MTN Group Chief Executive Officer, Sifiso Dabengwa says despite these business challenges, group revenue increased by 1.0% to R56, 542 million (about US$8,8 million).

Dabengwa said MTN Group is set to spend R22,2 billion (about US$3,18 billion) in order to increase its data and voice capacity.

MTN Group proved its market strength by recording 152 million mobile subscribers in Africa.

Data growth, excluding SMS, increased by 24.1% to R3, 558 million as most of the larger operations enhanced their propositions both from a network and product perspective. Data growth was still primarily driven by South Africa.

African Performance

According to MTN, there was strong subscriber growth in most of the group’s operations including an encouraging performance in Sudan. Below is a breakdown of the company’s performance in key African markets:

South Africa

MTN South Africa delivered a sound performance for the period increasing its subscriber base by 5.1% to 19.8 million for the six months to 30 June 2011. This was mainly due to growth in the prepaid segment, which increased its subscriber base by 5.0% to 16.2 million subscribers. The post-paid segment subscriber base grew by 5.7% to 3.6 million subscribers.

MTN suspended 340,842 subscribers who had not been registered for the RICA 30 June 2011 deadline,  of which 115,879 were reconnected by 31 July 2011.

Total revenue grew by 5.9% mainly due to the growth in airtime, subscription and data revenue. Data increased by 17.9%, excluding SMS. At 30 June 2011, there were 4.6 million 3G devices on the network of which 2.6million include smartphones.

Nigeria

MTN Nigeria grew its subscriber base by 4.8% to 40.5 million. At 30 June 2011 MTN Nigeria had registered 50% of its subscriber base. The deadline for existing SIM registration remains 28 September 2011.

Total revenue in Naira grew by 13.1% driven mainly by airtime and subscription revenue growth as well as an increase in interconnect revenue. This was driven by an increase in traffic from other networks.

Ghana

MTN Ghana’s performance was sound for the period. Subscribers increased by 9.6% to 9.6 million from December 2010 and market share remained stable at 53%.

As at 30 June 2011, MTN Ghana had registered 90% of its subscriber base.

Mobile Money

Mobile Money has been implemented in 12 countries. Nigeria is expected to introduce this utilising a partnership model. At 30 June 2011, there were 5.1 million registered mobile money subscribers, with Uganda and Ghana, each accounting for 37% of the total.

Savious Kwinika

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