Wrap Text
Quarterly update for the period ended 30 September 2012
MTN Group Limited
(Incorporated in the Republic of South Africa)
Registration Number 1994/009584/06
Share code: MTN
ISIN: ZAE000042164
('MTN Group')
Quarterly update for the period ended 30 September 2012
MTN Group recorded 182,7 million subscribers
- Satisfactory subscriber growth despite strong competition
- Subscriber stimulating activities showing positive results
- Capital expenditure programme on track
MTN Group President and CEO, Sifiso Dabengwa commented:
MTN delivered a satisfactory set of results for the quarter ended 30 September 2012, increasing subscriber numbers by 3.8% to 182,7 million. The
Group's performance was underpinned by solid operational management and the rollout of appealing value propositions despite aggressive pricing
competition, regulations and economic challenges across the different markets in which the Group operates. This solid operational performance over
the past quarter has enabled MTN to increase guidance for net additions for 2012 from 21.25 million to 23.70 million.
MTN has continued to implement on its strategic pillars of improving shareholder returns, developing existing and new revenue streams, optimising
costs and improving customer experience. Most relevant during the quarter was the execution of competitive products and services in response to
aggressive price declines in the market, a continued focus on data growth and improved network rollout. Looking forward to the balance of the year,
acceleration of our network expansion will be a key priority across the majority of our operations as network quality remains a key enabler for our
business.
Operational review
MTN Group
This commentary includes an analysis of MTN South Africa, MTN Nigeria and the Large Opco Cluster. Detailed schedules of subscriber numbers,
quarterly ARPU and net additions guidance for all 21 operations are also included. With this update we have revised our disclosure to show actual quarterly
ARPU as opposed to year-to-date ARPU. We have furthermore disclosed ARPU in both USD as well as local currency.
MTN South Africa
MTN South Africa has continued the strong momentum as reported at the interim (1H12) period. The subscriber base increased by 4.1% for the quarter,
mainly attributable to a strong performance in the pre-paid segment, which maintained market share and increased subscribers by 4.2%. The post-paid
segment grew its subscriber base by 3.6% for the quarter increasing its market share marginally. Post-paid growth continues to be driven by hybrid
offerings, which contributed 44% to the post-paid subscriber base. Data delivered a satisfactory performance despite strong competition which has seen
tariffs come down across the market. Local currency blended ARPU remained stable at R121.25. Prepaid ARPU showed an upward trend as minutes of use
improved from lower tariffs and positive elasticity while postpaid ARPU continued to decline due to lower 'out of bundle' spend and a high volume of
telemetry SIMS.
MTN Nigeria
Although MTN Nigeria has continued to face a number of challenges subscriber growth showed a healthy improvement during the quarter, increasing 5.7%
and maintaining market share. This was largely due to successful competitive offerings, which saw significant price declines driven by promotional
activities. Elasticity has steadily improved during the quarter and billable minutes of use increased by 24% MoM in September with an effective
elasticity of 1.0x. Including promotional traffic we have seen Busy Hour Erlang almost double over the quarter and this has placed significant
pressure on the network. Parts of the network have experienced some deterioration in congestion levels. Data continued to gain momentum, although
growth in 2G data users was impacted by network congestion. Local currency ARPUs declined by 9.3% for the quarter mainly due to lower tariffs. Network
quality and capacity remains a priority and are being addressed through a comprehensive network rollout programme. This will be a key focus over the
next six to 12 months.
Other operations
Large Opco Cluster
MTN Irancell continued to deliver a sound operational performance despite an increasingly challenging economic and political environment. The
company increased its subscriber base by 2.8% largely due to its attractive value propositions and network quality. However, growing competition and
a high inflationary environment affected gross activations during the quarter. At the end of September 2012, MTN Irancell recorded 230 000 Wimax users.
Network rollout has been impacted slightly by delayed equipment delivery. Towards the end of the quarter the local currency depreciated substantially
against the dollar and this will impact the translation of fourth quarter earnings. Furthermore full-year earnings will be impacted by the translation of
the balance sheet at the closing rate.
MTN Ghana increased its subscribers by 4.8% for the quarter, a strong result in a highly competitive market. This was supported by attractive
acquisition and usage based promotions as well as effective management of sales and marketing. The company showed a marginal decline in market share
following the launch of a new entrant at the end of the second quarter. Data continued to show good growth due to an increased focus on distribution and
coverage. Local currency ARPU increased by 2.6% due to attractive promotions stimulating improved usage on the network. Network quality and capacity are
being addressed through the ongoing network rollout.
MTN Syria increased its subscriber base by 2.0% despite the ongoing civil unrest. Local currency ARPU declined by 12.2% mainly due to network
outages, particularly in the Aleppo area which is a key revenue generating region for the business. In the light of this ongoing unrest, pressure on ARPU and revenue is
expected to continue for the balance of the year. Security of staff and assets remains a key priority for the business.
MTN Cameroon grew its subscribers by 1.6% in the quarter. The slow growth was mainly due to a shortage in the number range, which has also resulted
in a loss of market share. This has subsequently been addressed. Local currency ARPU declined by 3.9% in the quarter due to challenges on the EVD
system impacting revenues in September.
MTN Côte d'Ivoire increased its subscribers by less than 1%. This was mainly due to a challenging economic environment, with a delay in the seasonal
cocoa harvest and political unrest in some parts of the country. Competition also intensified resulting in a loss of market share. Local currency
ARPU declined by 7.4% as a result.
MTN Uganda's performance was impacted by increased competition during the quarter and the business increased subscribers only marginally. Although
market share was negatively impacted, value share was maintained. This was attributable to the continued success of the MTN Zone offering. Local
currency ARPU increased by 4.6%.
MTN Sudan delivered a satisfactory performance despite the slow growth of the GSM market. During the quarter, the company increased market share and
marginally increased its subscriber base. The more than 80% devaluation in the Sudanese pound has resulted in a marked increase in inflation and led
to further challenges in the business. Delays in equipment delivery have impacted network rollout.
Subscribers
('000)
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 QoQ
Country Mar Jun Sept Dec Mar Jun Sept % Change
South Africa 19 197 19 799 20 968 22 033 22 735 23 533 24 498 4.1%
Post-paid 3 434 3 555 3 688 3 834 4 004 4 195 4 346 3.6%
Pre-paid 15 763 16 244 17 280 18 199 18 731 19 338 20 152 4.2%
Nigeria 40 211 40 540 41 107 41 641 42 899 43 184 45 640 5.7%
Other 87 857 91 933 96 515 100 827 104 939 108 783 112 042 3.5%
Large Opco Cluster 66 300 69 225 72 926 76 300 79 681 82 557 84 451 2.3%
Iran 31 391 32 182 33 314 34 681 36 831 38 296 39 382 2.8%
Ghana 9 070 9 562 9 894 10 156 10 394 10 758 11 270 4.8%
Syria 4 920 5 123 5 428 5 716 5 693 5 906 6 021 2.0%
Côte d'Ivoire 5 406 5 644 5 944 6 305 6 337 6 466 6 489 0.3%
Cameroon 4 589 4 879 5 464 5 800 6 367 6 952 7 067 1.6%
Uganda 6 908 7 241 7 508 7 629 7 725 7 228 7 239 0.2%
Sudan 4 016 4 594 5 374 6 013 6 334 6 951 6 982 0.4%
Small Opco Cluster 21 557 22 708 23 589 24 527 25 258 26 226 27 591 5.2%
Yemen 2 977 3 344 3 693 3 880 4 035 4 215 4 445 5.4%
Afghanistan 4 189 4 338 4 412 4 768 4 952 5 173 5 326 3.0%
Benin 2 245 2 305 2 300 2 399 2 488 2 519 2 602 3.3%
Congo - Brazzaville 1 725 1 731 1 729 1 672 1 634 1 653 1 748 5.8%
Zambia 2 043 2 173 2 383 2 704 2 946 3 156 3 470 10.1%
Guinea-Conakry 2 002 2 110 2 183 1 987 1 977 2 099 2 340 11.5%
Rwanda 2 638 2 794 2 864 2 889 2 899 3 033 3 229 6.5%
Cyprus 250 263 280 280 283 302 316 4.6%
Liberia 795 852 939 1 006 1 045 1 060 1 102 3.9%
Botswana 1 445 1 481 1 509 1 584 1 603 1 596 1 600 0.3%
Guinea-Bissau 570 599 587 591 608 638 622 -2.5%
Swaziland 678 718 710 767 788 782 791 1.1%
Total subscribers* 147 265 152 272 158 590 164 501 170 573 175 995 182 704 3.8%
*Includes South Sudan.
ARPU
(US$)
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Mar Jun Sept Dec Mar Jun Sept
South Africa 19,70 19,20 19,43 18,86 16,02 15,41 15,11
Nigeria 9,93 9,75 9,69 9,42 9,30 9,23 8,30
Large Opco Cluster
Iran 7,58 8,11 8,09 7,96 7,48 7,44 7,44
Ghana 6,91 7,01 6,84 7,10 6,57 6,03 6,02
Syria 14,48 13,78 14,54 13,04 10,36 9,90 8,85
Côte d'Ivoire 6,29 5,28 5,82 6,51 6,10 6,06 5,51
Cameroon 7,28 7,98 7,41 6,49 6,42 5,31 5,00
Uganda 3,92 3,00 3,16 3,92 3,99 3,71 3,86
Sudan 4,46 4,65 3,98 3,80 3,72 3,88 2,51
Small Opco Cluster
Yemen 5,65 5,75 6,07 6,88 6,24 5,98 6,06
Afghanistan 4,55 4,98 4,97 4,26 4,48 4,83 4,52
Benin 8,54 8,92 9,01 8,84 8,02 7,77 7,81
Congo B 9,22 9,65 10,51 9,74 10,26 10,19 11,15
Zambia 5,06 4,26 5,68 5,62 4,44 5,19 5,07
Conakry 4,52 4,83 4,81 4,90 5,61 5,55 5,24
Rwanda 3,63 3,54 4,21 3,76 3,81 3,52 3,89
Cyprus 31,59 34,39 29,11 34,18 27,01 30,33 25,05
Liberia 10,25 10,56 9,64 9,47 9,18 9,52 9,45
Botswana 9,99 10,24 10,30 9,91 8,53 8,54 8,69
Bissau 6,18 8,07 6,41 5,53 5,43 5,40 4,15
Swaziland 13,92 13,82 13,98 14,29 10,83 10,42 10,76
Subscribers are customers who have participated in a revenue-generating activity in the last 90 days,
ARPU is the monthly weighted average revenue per subscriber. Revenue includes interconnect fees and
excludes connection fees and visitor roaming revenue, and this is divided by the weighted average
subscriber base over the period.
South Africa subscribers and ARPUs include community service payphones into pre-paid and application
providers into post-paid.
ARPU
(local currency)
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Mar Jun Sept Dec Mar Jun Sept
South Africa 136,7 131,1 134,0 135,3 123,5 121,5 121,2
Post-paid 299,4 282,0 293,6 273,2 267,2 261,3 241,6
Pre-paid 101,5 98,1 99,8 105,9 93,2 91,3 95,2
Nigeria 1 520,2 1 511,5 1 499,0 1 511,7 1 493,3 1 462,0 1 326,1
Large Opco Cluster
Iran 78 353,6 86 249,9 86 120,1 85 968,9 87 378,7 91 155,0 91 196,5
Ghana 10,5 10,6 10,4 11,6 11,1 11,3 11,6
Syria 682,6 656,9 693,7 661,2 616,2 688,9 605,1
Côte d'Ivoire 3 015,0 2 387,9 2 673,2 3 160,8 3 032,0 3 098,8 2 870,2
Cameroon 3 469,9 3 611,7 3 410,9 3 235,8 3 192,7 2 708,0 2 602,4
Uganda 9 161,9 7 207,1 8 568,1 10 173,9 9 537,3 9 228,3 9 653,4
Sudan 12,1 12,5 10,7 10,2 9,9 11,0 11,6
Small Opco Cluster
Yemen 1 212,5 1 273,9 1 443,5 1 573,8 1 353,1 1 286,3 1 303,5
Afghanistan 206,6 228,8 235,1 206,4 221,7 243,3 234,1
Benin 4 071,3 4 031,4 4 148,2 4 295,6 3 991,9 3 961,5 4 086,8
Congo B 4 395,4 4 365,3 4 838,4 4 730,0 5 101,2 5 203,0 5 808,3
Zambia 24 132,3 20 162,6 27 527,5 27 998,1 23 045,3 27 318,0 25 445,5
Conakry 33 225,1 31 670,6 32 537,9 33 908,4 38 819,4 38 199,9 35 867,4
Rwanda 2 148,0 2 113,8 2 513,0 2 251,9 2 300,9 2 131,7 2 374,1
Cyprus 22,9 23,6 20,5 25,2 20,5 23,0 20,5
Liberia 10,3 10,6 9,6 9,5 9,2 9,5 9,5
Botswana 66,4 66,6 70,1 73,7 61,7 65,1 67,0
Bissau 2 956,5 3 647,4 2 949,7 2 680,3 2 698,2 2 757,4 2 170,0
Swaziland 96,5 96,1 97,3 99,5 83,5 83,9 89,1
Revised net additions guidance
Jun 12 Sep 12
Country ('000) ('000)
South Africa 3 000 3 500
Nigeria 4 000 5 300
Other 14 250 14 900
Large Opco Cluster - 11 150
Iran 5 500 5 500
Ghana 950 1 400
Syria 400 500
Côte d'Ivoire - 250
Cameroon - 1 500
Uganda - 0
Sudan - 2 000
Small Opco Cluster - 3 750
Total 21 250 23 700
Fairland
25 October 2012
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 25/10/2012 09:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
