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Johannesburg - Updated statistics about MTN’s operations in key markets such as South Africa and Nigeria have been revealed by the network operator.
Currently, MTN [JSE:MTN] is battling a strike by call centre and franchise workers in South Africa, which, at the time of writing, has yet to be resolved.
Meanwhile, MTN is also struggling with fuel shortages in Nigeria - a country where mobile networks are heavily dependent on using diesel to power tower infrastructure.
Yet despite these challenges, MTN is upbeat about its African and Mideast operations, according to a business update released by the company on Wednesday to its shareholders on the Johannesburg Stock Exchange (JSE).
MTN operates in 22 countries across the region.
The following data has not yet been reviewed by external auditors but it has been provided in light of MTN's annual general meeting on Wednesday.
Subscribers
The company says that in April 2015, MTN South Africa recorded subscriber net additions of 168 000.
During the year leading up to April 30 2015, MTN says its Nigerian subscriber base grew by 1.5 million net additions.
In turn, the company says its entire group subscriber base across the Middle East and Africa increased to 229.2 million - a year-on-year (YoY) increase of approximately 8%.
Total minutes
Regardless of the ever-growing uptake of over-the-top (OTT) services such as instant messaging app WhatsApp, MTN says that total minutes across its African and Mideast operations increased by 14% YoY.
“Total minutes on the South African network are up 137% YoY following the reduction in tariffs over the past 18 months. The operation remains focused on the network roll-out to ensure the network is adequately positioned to sustain the growth in both voice and data traffic,” said MTN on Wednesday.
“Although Nigerian minutes were down 2% Year-to-date (YTD), the recently revised promotions are expected to drive incremental traffic volumes over the balance of the year,” noted the mobile network.
Revenue
MTN has said that while its organic revenue increased marginally over the year, its reported revenue has declined YoY as weaker exchange rates cause a drop of as much as 6%.
“This was predominantly driven by the Naira which has weakened by 9.0% against the rand over the same period in the prior year,” says MTN regarding the Nigerian currency.
MTN goes on to say that “while Nigeria has continued to see quarterly sequential improvements in local currency revenue, the revenue for the four months to 30 April 2015 is down approximately 1% YoY”.
Meanwhile, MTN says its service revenues in South Africa “continue to show positive momentum” as it was 3.3% higher YoY.
“The challenges experienced with handset distribution have, however, resulted in a 21% YoY decline in handset sales and negatively impacted total revenue growth,” said MTN in its business update.
Touching on its other operations in Africa and the Mideast, MTN said that Iran, Ghana, Uganda and Sudan “recorded healthy revenue growth for the period”.
However, MTN notes that revenue in Cameroon was negatively impacted by the introduction of a new competitor in that market.
Data
Data revenue across the MTN group operations increased by 18% YoY and that it now contributes 21% to total revenue at the company. This is compared to 17% for the same period last year.
Earnings
When it comes to disclosing its earnings at this stage, MTN is not revealing exact figures as yet.
But the company does say that the group’s earnings before interest, tax, depreciation and amortisation (Ebitda) has fallen when compared to the same period last year.
The company attributes this fall to weakness in Nigeria’s Naira relative to the South African Rand.
The company also says that its Ebitda margin in Nigeria was hit by mobile tower transactions and “increased dollar denominated costs related to the weaker exchange rate”.
The company’s Ebitda margins were also similarly hit in Ghana and Cameroon because of currency weakness and dollar denominated costs.
“The Ebitda margin in South Africa continues to benefit from the cost initiatives implemented in the second half of 2014,” says the company.
MTN has been undertaking cost cutting measures in South Africa such as retrenchments and cuts in bonus pay.
Capital expenditure
MTN says that total capital expenditure (capex) across its operations is flat over the year and that it expects its full year capex to be R30bn.
“Importantly, we expect a total capex investment of R10bn for MTN South Africa in the year,” says the network.
Looking forward
Finally, MTN is painting a picture of a challenging year ahead for its operations.
“While the operating environment remains challenging across all of our markets, with persistent price competition and regulatory challenges, we do anticipate some stability in operating trends over the balance of the year. In Nigeria in particular, but also in a number of other countries, there are concerns given the weak macro-economic situation and the impact this could have on customers through the balance of the year,” reads the MTN note.
“As traditional voice revenue remains under pressure, data, digital services and Mobile Money remain key areas of focus for the Group. In addition, improving customer experience in all of our operations, cost optimisation and the execution of our infrastructure sharing strategy remain central to our strategy,” says the company.
