Wrap Text
Quarterly update for the period ended 31 March 2014
MTN Group Limited
(“MTN” or “the Group”)
(Incorporated in the Republic of South Africa)
Registration number: 1994/009584/06
ISIN: ZAE000042164
Share code: MTN
Quarterly update for the period ended 31 March 2014
MTN Group records 210,1 million subscribers
MTN is a leading emerging market mobile operator, connecting approximately 210 million people
in 22 countries across Africa and the Middle East. MTN is at the forefront of global
technological changes, delivering a bold, new Digital World to our customers.
Highlights
* Subscriber of 1,1% quarter-on-quarter (QoQ) from December 2013
* Data revenues bolster performance increasing 43,3% year-on-year (YoY)
* Continued growth momentum in large opco cluster
* Encouraging progress in Mobile Money with total registered subscribers now 16,6 million
* Continued focus on network roll-out and data offerings in Nigeria
MTN Group president and CEO Sifiso Dabengwa comments:
“MTN delivered a satisfactory performance during the first quarter of 2014, underpinned by strong
data growth, competitive offerings and improved network quality and coverage. Our operating
environment remains tough with persistent price competition and regulatory challenges in key
markets. Subscriber numbers grew marginally by 1,1% quarter-on-quarter from December 2013.
This was mainly due to the ban on the sale of SIM cards in Nigeria during March, the disconnection
of non-revenue generating subscribers in South Africa and slower subscriber growth in Iran.
"Data and Mobile Money remain key areas of focus for the Group as traditional voice revenue remains
under pressure. We note encouraging growth in data revenues increasing 43,3% YoY and contributing
17,0% of total revenue and a 12,0% increase in Mobile Money subscribers. Cost containment and the
execution of our infrastructure sharing strategy, particularly in South Africa, continue to make
good progress.”
Operational review
MTN Group
This commentary includes an analysis of the performance of MTN South Africa, MTN Nigeria and the
Group’s large opco cluster. A detailed schedule of subscriber numbers and quarterly average revenue
per user (ARPU) data for all 22 operations is also included. ARPU is based on actual quarterly ARPU
and is disclosed in both US dollars and local currency.
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 our 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. Blended ARPU decreased 11,3% to R100,47.
MTN South Africa remains committed to seeking a permanent resolution to the recent MTR glide path
and asymmetry regulations announced by the Independent Communications Authority of South Africa,
which came into effect on 1 April for a period of six months.
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%. We continue to engage
constructively with the NCC on quality of service KPIs and regular market activities resumed from
1 April.
Encouragingly we have 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.
Other operations: Large opco cluster
MTN Irancell increased its subscriber base by 1,0% to 41,8 million. The slower than expected gross
connections were impacted by the weaker economy, a highly penetrated market and increased
promotional activities from GSM competitors. Innovative promotional offers have subsequently been
implemented to address subscriber acquisition and retention. Data revenue increased 79,0% YoY and
now contributes 10,4% to the operation’s total revenue. This was mainly driven by improved network
quality and attractive bundled data packages. Local currency ARPU increased 2,4% supported by
stronger data revenues.
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%.
MTN Syria continues to operate in an extremely challenging environment and subscriber numbers
decreased 1,8% to 5,7 million. Security, power outages and insufficient fuel supply remain some of
the key challenges. Data revenue increased 133,0% YoY, while local currency ARPU increased 6,1%
supported by increased tariffs.
Subscribers
(‘000)
Country 1Q13 2Q13 3Q13 4Q13 1Q14 QoQ %
South Africa 24 950 25 001 25 235 25 700 24 875 (3,2)
Post-paid 4 636 4 759 4 875 5 005 5 192 3,7
Pre-paid 20 314 20 242 20 360 20 695 19 683 (4,9)
Nigeria 51 295 55 238 55 596 56 766 57 224 0,8
Large opco cluster 89 318 90 805 91 499 93 454 95 540 2,2
Iran 41 542 42 025 41 295 41 374 41 783 1,0
Ghana 12 024 12 588 12 765 12 930 13 055 1,0
Syria 5 665 5 507 5 787 5 829 5 723 (1,8)
Ivory Coast 6 433 6 572 6 683 7 078 7 521 6,3
Cameroon 7 499 7 623 8 160 8 711 9 236 6,0
Uganda 7 950 8 041 8 386 8 808 9 549 8,4
Sudan 8 206 8 448 8 423 8 724 8 672 (0,6)
Small opco cluster 29 825 30 490 31 432 31 882 32 426 1,7
Yemen 4 691 4 789 5 010 5 055 5 185 2,6
Afghanistan 5 376 5 460 5 650 5 890 6 058 2,9
Benin 2 739 2 838 2 976 3 130 3 259 4,1
Congo B 1 720 1 731 1 757 1 764 1 865 5,7
Zambia 4 200 4 234 4 471 4 410 4 161 (5,6)
Conakry 2 353 2 450 2 524 2 723 2 885 5,9
Rwanda 3 451 3 600 3 637 3 556 3 525 (0,9)
Cyprus 312 324 328 331 399 20,8
Liberia 1 231 1 258 1 278 1 317 1 355 2,9
Botswana 1 623 1 636 1 691 1 712 1 700 (0,7)
Bissau 727 727 603 463 490 6,0
Swaziland 817 829 852 811 813 0,2
South Sudan 585 614 654 720 732 1,7
Total subscribers 195 388 201 534 203 762 207 801 210 065 1,1
ARPU
(Local currency)
1Q13 2Q13 3Q13 4Q13 1Q14 QoQ %
South Africa 110,62 105,40 106,06 113,36 100,47 (11,4)
Post-paid 222,34 220,90 215,55 225,23 214,58 (4,7)
Pre-paid 86,05 78,64 80,17 86,21 72,04 (16,5)
Nigeria 1 245,64 1 150,39 1 148,78 1 217,14 1 177,82 (3,2)
Large opco cluster
Iran 92 298,84 96 426,65 100 548,63 100 380,99 102 834,76 2,4
Ghana 11,32 11,45 11,16 11,54 11,73 1,7
Syria 504,88 610,52 639,84 676,78 718,37 6,1
Ivory Coast 3 183,33 3 251,97 3 115,99 3 237,58 3 095,89 (4,4)
Cameroon 2 685,36 2 641,64 2 715,32 2 715,03 2 469,15 (9,1)
Uganda 9 368,65 10 425,73 9 761,85 10 379,00 8 974,72 (13,5)
Sudan 11,19 11,50 11,09 11,13 12,36 11,1
Small opco cluster
Yemen 1 294,57 1 296,52 1 302,91 1 232,02 1 182,54 (4,0)
Afghanistan 206,21 220,89 204,79 197,23 180,62 (8,4)
Benin 3 862,85 3 772,26 3 678,13 4 169,04 3 764,70 (9,7)
Congo B 5 252,34 5 192,13 5 979,58 5 669,93 5 494,05 (3,1)
Zambia 22,51 23,18 27,22 29,31 28,58 (2,5)
Conakry 37 914,82 36 603,70 33 273,31 32 156,58 29 163,91 (9,3)
Rwanda 1 888,47 1 790,45 1 728,22 1 853,42 1 655,75 (10,7)
Cyprus 18,30 19,86 18,58 15,01 18,20 21,3
Liberia 8,63 8,61 7,92 9,92 6,98 (29,7)
Botswana 61,84 67,60 67,25 66,16 65 (1,8)
Bissau 1 968,81 1 769,86 1 540,66 1 878,41 2 315,70 23,3
Swaziland 92,10 87,95 96,00 100,36 100,88 0,5
South Sudan 26,00 27,55 28,26 27,72 24,82 (10,5)
ARPU
(US dollar)
1Q13 2Q13 3Q13 4Q13 1Q14 QoQ %
South Africa 12,38 11,06 10,55 11,16 9,32 (16,5)
Nigeria 7,89 7,23 7,11 7,63 7,21 (5,5)
Large opco cluster
Iran 3,76 3,90 4,06 4,04 4,13 2,2
Ghana 5,92 5,78 5,40 5,17 4,70 (9,0)
Syria 5,54 5,45 3,70 4,31 4,81 11,7
Ivory Coast 6,42 6,46 6,30 6,72 6,46 (3,9)
Cameroon 5,41 5,25 5,49 5,63 5,15 (8,5)
Uganda 3,56 4,03 3,79 4,13 3,58 (13,3)
Sudan 2,54 2,61 2,40 1,96 2,17 11,1
Small opco cluster
Yemen 6,02 6,03 6,06 5,73 5,50 (4,0)
Afghanistan 3,92 4,00 3,64 3,42 3,16 (7,7)
Benin 7,79 7,49 7,43 8,65 7,86 (9,2)
Congo B 10,59 10,31 12,08 11,77 11,46 (2,6)
Zambia 4,22 4,34 5,03 5,36 4,97 (7,2)
Conakry 5,56 5,43 4,93 4,72 4,23 (10,4)
Rwanda 3,01 2,83 2,66 2,78 2,46 (11,6)
Cyprus 24,18 25,87 24,62 20,43 24,91 21,9
Liberia 8,63 8,61 7,92 9,92 6,98 (29,7)
Botswana 7,68 8,05 7,80 7,67 7,28 (5,1)
Bissau 3,97 3,51 3,11 3,90 4,83 24,0
Swaziland 10,32 9,23 9,55 9,88 9,35 (5,3)
South Sudan 8,22 8,71 8,94 8,76 7,85 (10,4)
The financial information on which this quarterly update is based has not been reviewed or
reported on by MTN’s external auditors.
Fairland
24 April 2014
Sponsor
Deutsche Securities (SA) Proprietary Limited
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