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 South African MTN Group is well placed to benefit from a rapidly converging telecommunications market. The group is focused on enhancing network quality and ensuring that it delivers top level services competitively. MTN has and is continuing to change the fortunes of economies and people across Africa and the Middle East through the quality of its established operations. In line with its vision of being a leader in the field of telecommunications in developing markets MTN continues to explore opportunities on the continent of Africa and beyond.
MTN Group subscribers now total in excess of 48m. Subscriber growth reflects the strong opportunities in an expanded footprint. MTN Group’s leadership position in high growth markets provides a solid platform to grow the subscriber base further. The provision of appropriate products and excellent service to customers is a priority.
According to MTN Group President and CEO, Mr Phuthuma Nhleko "The group intends to continue driving operational synergies, improving the cost base and pursuing strategic expansion opportunities."
Regional Review
Nigeria and South Africa were the key contributors to the company’s success, recording increases of 51% and 15% in revenue respectively for the six-month period to 30 June 2006. Nigeria’s growth in local currency was 33%, and the strengthening of the Naira against the Rand contributed 18%. Nigeria reported high revenue growth due to increased subscriber numbers and newly introduced competitive offers in the last quarter of 2006.
South Africa
MTN South Africa delivered a stable performance in a very competitive market, increasing its total subscriber base by 7% from December 2006 to 13,4 million at June 2007. The postpaid subscriber base grew by 3% to 2,4 million subscribers and the prepaid base increased by a healthy 7% to 11,0 million over the six-month period. Low-denomination vouchers have been a key driver in stimulating usage.
Average revenue per user (ARPU) in the postpaid segment decreased to R435 from R487 in December 2006 and prepaid ARPU decreased to R87 from R94, both decreases owing to continued penetration into lower-usage segments. As expected, blended ARPU decreased 9% to R149 from R164 at December 2006.
The MTN data proposition is gaining momentum with a 58% increase in data revenue to R1,2 billion. This was due to competitive pricing and an increased 3G rollout. Excluding the positive effect of foreign currencies strengthening against the Rand, Group EBITDA would have been 64%.
Nigeria
MTN Nigeria increased its subscriber base by 14% to 14 million since 31 December 2006. Subscriber growth slowed in the second quarter due to capacity and quality constraints. The capacity and quality are being addressed with an accelerated infrastructure rollout. By the end of June 2007, 84 BTSs were rolled out and 111 BTSs were integrated during the month of July. The installation of the Lagos Metro and Niger Delta’s fibre optic cabling is nearing completion and will be commissioned in the second half of the year.
During the period, ARPU declined from US$18 to US$16, which is consistent with increased penetration into the lower segment of the market.
Iran
The period under review is the first full six months of MTN Irancell, which had a soft commercial launch on 21 October 2006. Prepaid services were launched in January 2007. During the period, MTN Irancell recorded net additions of 1,8 million subscribers to 1,98 million subscribers at 30 June 2007. Growth in subscriber numbers is stabilising with 3,2 million active subscribers recorded at 20 August 2007. The network has been significantly enhanced and now has sufficient capacity to service 6,5 million subscribers.
ARPU increased from US$9 in December 2006 to US$10 as a result of improvements in the quality and capacity of the network, thereby stimulating usage.
Ghana
Ghana recorded an exceptional increase of 31% in subscriber numbers for the period from 2,6 million in December 2006 to 3,4 million. This was underpinned by strong operational execution on the network rollout, distribution, promotional campaigns and new product offerings. This has resulted in market share increasing from 52% in December 2006 to 54% in June 2007.
ARPU decreased from US$17 for the six months to 31 December 2006 to US$16 for the six months to 30 June 2007, primarily due to the acquisition of lower-end customers.
Sudan
The Sudan operation, which successfully re-branded to MTN Sudan in June 2007, increased its subscriber base by 43% from December 2006, recording 457 000 net connections to 1,5 million subscribers at 30 June 2007. ARPU decreased from US$16 for the six months to December 2006 to US$15 for the six months to June 2007.
Syria
MTN Syria delivered a stable performance in this high growth market, recording a 16% increase in subscriber numbers to 2,6 million from 2,2 million in December 2006.
ARPU declined from US$22 for the six months to December 2006 to US$20 in the period under review. This was due to an increase in mobile penetration from 26% at 31 December 2006 to 30% at 30 June 2007.
Everywhere you go
MTN’s brand promise is 'everywhere you go'. To deliver on this promise, the Group aims to create the infrastructure required to ensure continuous reliable mobile communication access to our customers 'wherever they go'.
MTN recognises that the essential infrastructure and related mobile telephony services it provides in the course of its business operations generates broad commercial and socio-economic development opportunities for the communities in which it operates.
While the company’s long-term goal remains value generation for our share holders, it continuously aspires to balance this commercial focus with the responsibility towards all stakeholders to create and sustain long-term mutual value. MTN believes there are two main components to creating this value: firstly, the quality of our network infrastructure and services we provide to our customers; and secondly, the social and commercial development of communities in our operational territories.
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Date: 3 - 5 March 2009