MTN Group Q3 Revenue Fell By 0.9%, Nigerian Subscribers Up By 2.5%

MTN Group

The moment of waiting is over! MTN Group, Africa’s largest mobile carrier by revenue has reported that its net revenue for the third quarter of the year was down by 0.9% year on year.

Last year, same quarter, the company recorded a gross revenue of ZAR53 billion. In the third quarter of this year revenue went down slightly to ZAR52 billion. Revenue from Nigeria fell by 3.3% to ZAR60 billion compared to ZAR62 billion last year.

This is still an impressive result given the harsh conditions the company is facing at home, in South Africa and particularly Nigeria where its revenue has been impacted by mega fines and regulatory infractions. On the top line, Nigerian data revenue increased by 6,7% and contributed 20,4% to total revenue.

However, the company could have earned more if not for the effect of a weaker macroeconomic environment negatively impacting consumers, and also decline in the effective data tariff because of competition and regulatory requirements impacting out-of-bundle billing.

MTN Group reported that data traffic in Nigeria increased by 43,8% year on year, benefiting from an improved data network and increased smartphone penetration. The number of smartphones on the network increased by 59,4% to 19,2 million year on year. Local currency ARPU (average revenue per user) decreased by 1,4% quarter on quarter. See highlights of the result:

  • New Group President and CEO, Rob Shuter to join MTN on 13 March 2017
  • Group transformational project commenced during the quarter under review
  • MTN has commenced the repatriation of funds from MTN Irancell to MTN Group
  • Group subscribers increased 0,9% quarter-on-quarter (QoQ)
  • MTN South Africa delivered encouraging improvement in EBITDA margin (+200bp QoQ)
  • MTN Nigeria reported a 1,2% decline in revenue Q3 2016 year-on-year (YoY) compared to a 6,2% decline in Q1 2016 (YoY) as the operation continued to deliver incremental improvements in revenue
  • Significant network improvement across the Group, particularly in the Nigerian and South African operations
  • Group capex increased 10,5% YoY to R21 230 million with 2 669 3G and 1 995 4G sites added
  • Constant currency data revenue increased 21,0% YoY, to contribute 26,4% to total revenue
  • Voice and data traffic increased 1,8% and 142% respectively YoY

On the competitive side of things MTN’s data business has come under serious competition from Glo, a local carrier that slashed data prices by more 200% to gain serious market share.

As opposed to what was expected, MTN’s market leadership position received a marginal boost as its subscriber base grew by 2.5% in the third quarter of the year. Perhaps MTN was expecting a higher growth, the company added that its subscriber base was “was negatively impacted by the exclusion from our active base of approximately 3.1 million subscribers relating to a change in subscriber accounting rules where we no longer account for subscribers whose activity was based on the receipt of a bulk SMS”.

As to how it achieved the subscriber growth, it noted that “subscriber numbers were supported mainly by reconnection through proactive engagement following their disconnection in line with regulatory requirements earlier this year.

Across other West African markets, the company reported that its subscriber base grew by,3% to 47,6 million, “driven by growth in MTN Ghana and MTN Ivory Coast”.

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