Regulatory pressure impacts MTN Nigeria’s subscriber growth - CNBC Africa

Regulatory pressure impacts MTN Nigeria’s subscriber growth

Earnings

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MTN has operations in several African countries including Nigeria, South Africa and Ghana. PHOTO: Reuters

“MTN reported encouraging results for the third quarter, delivering subscriber growth of two per cent quarter-on-quarter, however, performance was impacted by continued aggressive competition and stringent regulatory requirements,” said [DATA MTN:MTN Group] president and chief executive, Sifiso Dabengwa.

“The South African operation delivered an improved performance in the prepaid segment supported by competitive offers while the Nigerian operation faced a challenging regulatory environment resulting in lower-than-expected growth.”

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According to MTN, subscribers in Nigeria declined to 58.4 million, largely impacted by regulatory restrictions relating to the “dominant operator” ruling and continued unrest in the northern region during the quarter.

“While this muted subscriber performance is expected to impact revenue growth for the second half of the year, by mid-September the operation had resolved a number of issues with the regulator resulting in an improvement in subscriber growth,” MTN said.

Dabengwa added that group net addition subscriber guidance for the full year increased marginally to 17.5 million.

“The group continued to benefit from good growth in non-voice revenue driven by data and Mobile Money across key markets. Data revenue increased by 34.4 per cent year-on-year and now contributes 17.8 per cent of total revenue,” he said.

“Good progress was also achieved in the optimisation of our operating model, particularly in reducing costs and the monetisation of assets with the announcement of the tower transaction in Nigeria during the quarter.”

MTN further stated that its South African operations showed good progress from the first half of the year.

“The operation increased its subscriber base by 5.7 per cent to 26.7 million, adding 1.4 million net additions for the quarter, mainly attributable to competitive offers such as “rush hour” and “talk free” in the prepaid segment,” it said.

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“As a result, the prepaid subscriber base increased by 7.1 per cent to 21.2 million, with encouraging growth in minutes of use during the quarter.”

MTN added that the performance of it Ghanaian operation was satisfactory despite a weak macro-economic environment while MTN Cameroon delivered a solid performance, increasing its subscribers by 9.7 per cent to 11.2 million.

MTN Ivory Coast maintained market share notwithstanding a marginal decline in its subscriber base to 7.7 million and MTN Uganda surpassed 10 million subscribers, increasing its base by 2.6 per cent to 10.1 million in a competitive market.

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