Johannesburg — MTN yesterday reported a modest 5% increase in subscriber numbers to 108,467-million boosted by growth in most of its key markets.

But its customer base in SA, where the national mobile penetration rate now exceeds 100%, took a dip mainly due to a new regulation requiring pre paid users to register personal details.

It is believed the regulation, which came into effect in August, has proved too onerous for users, hence the reluctance by even existing users to comply.

MTN admitted as much, and said in its update that customers in SA fell to 16,419- million down from 17,231-million as of June primarily as a result of the implementation of the new regulation.

MTN trails Vodacom in SA but dwarfs by far its rival on the African continent where it is the largest operator.

Frost & Sullivan analyst Spiwe Chireka yesterday said the fall in numbers for SA was "a minor glitch not to be concerned about". She predicted other operators -- Vodacom, Cell-C and to an extent Virgin Mobile -- could also potentially report reduced numbers as a result of the new law. MTN is the first to report since the user-registration regulations were introduced.

"When prepaid subscriber registration was introduced in Senegal in 2007, Sonatel -- the market leader there -- lost 6% in subscriber growth numbers and in the Democratic Republic of the Congo the practice has been suspended following the negative effect it had on operators' net additions capabilities, among other things," she said.

In its update, MTN said that the total contribution by regions in Africa and the Middle East remained relatively unchanged. The south and e ast Africa region (which includes SA) provided 23% of the growth, down from 25% in June, while the w est and c entral Africa region and the Middle East and n orth Africa regions contributed 46% (46% as of June) and 31% (30% as of June), respectively.

Total subscribers grew to 108466000 compared with 103187000 as of June, an increase of 5% or an annualised rise of 19,6%.

Chireka said there was potential for further growth in all markets outside SA mainly because of the still untapped potential, particularly in many African markets where penetration rates were still low by global standards.

"Considering that these figures are just for the quarter period, if you compound these growth rates (over a longer period) it is looking relatively good for MTN," she said.

"The south and east Africa region increased its subscriber base by a very modest 0,5% for the quarter.

"This was primarily due to the disappointing negative movement of the SA subscriber base which contributes 64% to the region.

"SA's subscriber base declined from 17231000 at the end of June 2009 to 16419000 at 30 September 2009," MTN said.

It said the Middle East and n orth Africa region recorded a 9% increase in subscribers for the quarter largely due to continued growth from the Iran operation, which contributes 62% to the region's subscribers and increased its base 8% to 20702000.