In its first quarter update. MTN Group said its revenue from its Nigerian unit, MTN Nigeria delivered an 11.6% year over year growth in revenue.
The company attributed the uptake in revenue to a 71.3% increase year over year growth in data revenue.
However, the following quarters will remain very tough as the company disclosed that its subscriber base declined by 2.3% in the quarter in comparison to last year’s milestone.
With this MTN would have lost about 1.4 million of its subscribers in the first quarter. However, MTN is not the only one hurting in the market. Etisalat, the smallest carrier has also seen much pressure with its inability to pay its debt and declare profit since it started in 2008.
No doubt that MTN Nigeria is still the biggest mobile carrier in the country that accounts for over 60% of its revenue; but a continuous decline in its customer base will mean its revenue will continue to face serious pressures.
Giving guidance to the numbers, the company noted that the company’s overall quarterly performance was “impacted by new regulations that require all subscriber connections to take place in permanent brick and mortar structures. This led to a marked reduction in gross connections across the industry. MTN Nigeria has also continued with the process of excluding subscribers whose only activity is receiving incoming SMS”.
What this tells anyone is that MTN is still hurting from the NGN330 billion fine it is paying to the Nigerian government. Late last week, MTN was reported to have cut over 200 jobs in permanent positions and another 80 contract/third party positions. The company will be cutting more costs in the following months to gain more revenue despite competitive pressures.
But MTN has more worries outside of Nigeria. Performance in South Africa, its country of origin has seen a more disappointing performance. Within the quarter, revenue was up by 4.1%. This milestone was scored by data and ‘digital revenue which increased by 17,8% and 20,3% respectively’. Comparing such growth with Nigeria’s numbers shows the company will not be expecting much from its home turf.
The company’s Ghana, Uganda and Iran units are not doing bad, but a 1,5% quarter-on-quarter decline in subscribers shows that competition, regulation and shrinking innovation will continue to dictate what the company will post in the coming quarters.
On its recent job cuts in Nigeria. MTN Group did not comment on the matter.
MTN Group is quoted on the Johannesburg Stock Exchange.
