CIO East Africa (Nairobi)

25 April 2014

Kenya: MTN Group Reaches 210 Million Subscribers

MTN has passed the 210 million subscriber mark and recorded a significant data revenue increase, according to the group's latest quarterly report.

Among the highlights for the March 2014 quarter, MTN Group reported subscriber growth of 1.1% quarter-on-quarter (QoQ) from December 2013, data revenues bolstering performance increasing 43.3% year-on-year (YoY) and encouraging progress in Mobile Money, with total registered subscribers now 16,6 millio]

According to Biztech Africa, MTN South Africa continued to focus on regaining relevance in the pre-paid segment and maintaining its post-paid market share. Overall subscriber numbers reduced by 824 768 bringing total subscribers to 24,9 million at the end of the quarter. This was largely due to the disconnection of 973 064 subscribers who had been showing activity but not generating revenue as per 90 day RGS requirement. The post-paid segment delivered a satisfactory performance, growing subscribers by 3.7% to 5.2 million. This was supported by continued growth in telemetry SIMs, segmented marketing campaigns as well as attractive converged offers.

While the pre-paid segment remained challenging, the introduction of MTN Sky (unlimited pre-paid bundled price plan) and the launch of a new pre-paid voice promotion of 79 cents per minute for both on-net and off-net calls in the second quarter, are expected to deliver improved subscriber performance going forward. Data continues to bolster revenue growth, increasing by 13.3% YoY and now contributes 22.8% of the operation's revenue. Data subscribers increased to 14.5 million largely due to competitive data packages and the launch of the low-cost Steppa smartphone.

MTN Nigeria delivered a satisfactory performance during the quarter and increased its subscriber base despite the one-month ban on the sale of SIMs imposed by the Nigerian Communications Commission (NCC) for three of the four GSM operators. MTN Nigeria grew its subscribers marginally to 57.2 million and the operation's market share declined marginally to 49.3%. MTN continues to engage constructively with the NCC on quality of service KPIs and regular market activities resumed from 1 April. Encouragingly MTN has seen strong subscriber growth post the lifting of the ban.

There has been a significant improvement in network quality and capacity with 483 2G and 597 3G sites added during the quarter. Effective data pricing and locally relevant product offerings also remain key focus areas. Local currency data revenue continued to grow strongly increasing by 21.1% YoY with the average data usage per customer at 41MB per month. This was mainly attributable to the growth in 3G enabled devices on the network, which increased to 7.1million and improved 3G network quality and capacity. Local currency ARPU was 3,2% lower due to lower effective tariffs.

MTN Ghana increased subscribers by 1.0% to 13.1 million. This was a satisfactory performance despite a highly penetrated market, currency and inflationary pressures, and increased competition. The investment in Mobile Money awareness together with new and innovative products resulted in higher activations and transaction volumes. This positively impacted local currency data revenue, which increased by 99.8% YoY and now contributes 7.0% to the operation's total revenue. MTN Ghana will continue to focus on managing overall costs as the currency remains under pressure. Local currency ARPU increased 1.7% for the quarter.

MTN Cameroon performed well, delivering a 6.0% increase in its subscriber base to 9.2 million. The operation increased its value share while maintaining its market share despite strong competition and a relatively weak economic environment. This was attributable to a wide range of bonus offers and an increased focus on competitive data offerings, Mobile Money and effective distribution. Subscriber growth was further supported by effective dormancy management and lower churn levels. Local currency data revenue increased 60.6% YoY, contributing 7.4% to the operation's total revenue, and Mobile Money continued to increase active subscribers and transaction volumes. Local currency ARPU decreased 9.1% largely due to lower data tariffs.

MTN Ivory Coast increased its subscribers by 6.3% to 7.5 million, maintaining its market share and increasing value share in a highly competitive market. This was mainly due to attractive "bonus top-up" and data promotions. Local currency data revenue increased 29.6% YoY, while Mobile Money gained momentum and increased subscribers by 10.4% to 1.6 million. During the quarter, the operation continued to accelerate 3G coverage in the main business centres. Local currency ARPU declined 4.4% due to increased promotional activity.

MTN Uganda reported a good performance increasing its subscriber base by 8.4% to 9.5 million. This was mainly attributable to attractive bundled offers aimed at both acquisition and retention. Regionally focused sales and distribution campaigns also supported this performance. Local currency data revenue increased 67.7% YoY and now contributes 23.5% to revenue. Mobile Money is now the largest contributor to the operation's data revenue with nearly 50% of subscribers actively utilising the service. Local currency ARPU declined 13,5% for the quarter due to lower effective tariffs.

MTN Sudan experienced a net reduction of 52 000 subscribers with the overall base remaining at 8.7 million subscribers. This was largely attributable to increased competition and a spike in unrest in the southern region of the country. Subscriber retention and segmented offerings remain key focus areas. Data revenue increased 127.2%, contributing 11.3% to revenue. Local currency ARPU increased 11.1%.

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