Wrap Text
Quarterly update for the period ended 30 September 2017
(Incorporated in the Republic of South Africa)
Registration number: 1994/009584/06
ISIN: ZAE000042164
Share code: MTN
(“MTN” or “the Group”)
Quarterly update for the period ended 30 September 2017
MTN is a leading emerging markets mobile operator, connecting approximately 230 million people in 22
countries across Africa and the Middle East. We are at the forefront of global technological changes,
delivering a bold, new Digital World to our customers.
Salient features
- Group subscribers declined marginally by 0,7% quarter-on-quarter (QoQ) to 230,2 million, largely
driven by lower reported subscribers in Nigeria as we continue to refine our active subscriber
definitions as well as the disconnection of approximately 750 000 subscribers in Uganda as a result
of regulatory SIM registration requirements.
- Active MTN Mobile Money customers increased QoQ by 10,6% to 19,8 million.
- Voice traffic (billable minutes) increased by 9% and data traffic continued to grow strongly up by
some 125% year-on-year (YoY).
- On a reported basis Group total revenue and Group service revenue reduced by 13,4% and 14,0%
respectively largely due to exchange rate movements.
- On a constant currency basis Group total revenue increased by 6,9%, with Group service revenue up 7,4%.
Data revenue increased by 31,4% and digital revenue was up 19,6%.
- MTN South Africa's organic service revenue increased by 5,2%*.
- MTN Nigeria reported an 11,2% increase in total revenue supported by data revenue growth of 72,1%.
- MTN Irancell total revenue increased by 16,8% and;
- MTN Group year-to-date capital expenditure was R18 billion, up 1,1%.
Unless otherwise stated financial growth rates are presented on a constant currency basis. Financial
growth rates are year-on-year (the nine-month period ended 30 September 2017 versus the nine months ended
30 September 2016) unless otherwise stated. QoQ growth rates refer to 3Q17 vs 2Q17. Data revenue refers to
access data revenue only. Digital revenue refers to Mobile Money (MoMo) and value-added services (VAS)
revenue.
*Organic revenue adjusts for prior year disposals and alignment of post-paid carry over rules.
MTN Group president and chief executive officer, Rob Shuter comments:
"The Group continued to make steady progress in implementing our BRIGHT strategy with a strong focus on
operational execution across the Group. Our key growth drivers of data and digital services performed well
with revenue growth of 31,4% and 19,6% respectively. In the quarter, we have accelerated our network
investment programme, rolling out 1 641 3G and 2 102 4G sites (including co-located sites), supporting the
demand for data services. In South Africa and Nigeria the network investments are showing encouraging
improvements in network quality and NPS.
In South Africa the prepaid business performed well and progress is being made in the postpaid segment
particularly in consumer postpaid where we now have positive net-adds year to date. In Nigeria, our
month-on-month gross connections have increased, and we experienced stable subscriber market share over the
quarter while driving increased value share.
In line with our strategic initiative to drive a dual-data strategy, we are working on reducing the
out-of-bundle data pricing across our markets to stimulate usage from inactive and low usage customers. This
is expected to have a short-term impact on data revenue growth but we anticipate elasticity in the mass
and high-value segments will continue to drive data revenue growth in the medium term.
We further strengthened our management structure to support our BRIGHT strategy. The appointment of
Ebenezer Asante as vice-president (VP) of our new South and East Africa and Ghana Region, effective
1 October 2017 completes the Group executive structure. Ebenezer was previously the chief executive officer
of MTN Ghana, a position he held from July 2015 to September 2017.
Other Group senior appointments in the quarter included:
* Fred Scheppens as Group executive: MTN GlobalConnect, effective 15 October 2017;
* Dirk Karl as Group executive: Procurement and Supply Chain Management, effective 1 October 2017;
* Serigne Dioum as Group executive: Mobile Financial Services, effective 26 September 2017; and
* Ankur Bajpai as Group executive: Customer Value Management, effective 1 September 2017.
We continue to work on the modernisation of our subscriber definitions which we expect to complete by
year-end.
We remain on track to meet our financial year 2017 guidance despite continued challenging economic growth
across our markets."
MTN GlobalConnect is MTN's wholesale business.
SEA region comprises South Africa, Uganda, Zambia, Rwanda, Botswana (joint venture), Swaziland (joint
venture) and South Sudan.
WECA region comprises Nigeria, Ghana, Cameroon, Ivory Coast, Benin, Congo-Brazzaville, Liberia,
Guinea-Conakry and Guinea-Bissau.
MENA region was made up of Iran (joint venture), Syria, Sudan, Yemen, Afghanistan and Cyprus.
SEA REGION
SOUTH AFRICA
MTN South Africa recorded organic service revenue growth of 5,2%*. Data and digital services revenue which
increased by 21,0% and 27,7% respectively, were supported by a strong prepaid performance as well as the
continued recovery of the postpaid consumer segment. NPS continued to improve driven mainly by network NPS.
Subscriber numbers decreased by 1,0% to 30,9 million, impacted by a 1,3% decline in the prepaid segment
(mainly the result of higher churn following the withdrawal of a Q2 2017 promotion). Postpaid subscriber
numbers were stable.
The postpaid consumer segment recorded positive net additions in quarter, demonstrating a continued
encouraging recovery in this segment. This was supported by improvements made in customer value management
(CVM), increased channel footprint and enhanced churn management. The growth in consumer net additions was
partly offset by the disconnection of subscribers through certain on-biller partnerships and churn in the
enterprise segment.
MTN South Africa continued to make good progress in improving the quality and capacity of its 3G and 4G
network in the quarter with leading network metrics in three of the four metros in the country.
UGANDA
MTN Uganda delivered encouraging revenue trends, underpinned by strong growth in data and MoMo revenue. Data
revenue increased by 29,8%, supported by improved 3G coverage, implementing new CVM including contextualised
pricing, and increased smartphone penetration. MoMo contributed 23% to total revenue. On-net voice revenue
continued to show positive growth following the launch of personalised voice bundles earlier in the year.
The operation’s NPS improved further in the quarter, supported by stronger value and billing NPS (QoQ).
At the end of August 2017, MTN Uganda disconnected approximately 750 000 subscribers as a result of
regulatory SIM registration requirements. As a result, the subscriber base declined by 3,2% to 10,8 million.
SEA EXCLUDING SOUTH AFRICA - across the rest of the SEA region the subscriber base declined by 0,7% QoQ.
Rwanda, Zambia, Swaziland and South Sudan contributed positively, however the growth was offset by the
disconnections in Uganda.
WECA REGION
NIGERIA
MTN Nigeria continued to deliver healthy revenue growth of 11,2%, supported by 5,4% growth in voice revenue
and 72,1% growth in data revenue. Voice revenue growth was driven by effective price optimisation, increased
minutes of use and higher interconnect revenue. Data revenue benefited from investments made on expanding
and improving the 3G and 4G network quality, and increased 4G device penetration. Digital revenue growth,
however, continued to be negatively impacted by the ongoing optimisation of VAS services. NPS showed
incremental improvements, driven by network NPS (QoQ).
MTN Nigeria decreased its subscriber base by 5,2% to 50,3 million impacted by the modernisation of
subscriber definitions. On a like-for-like basis MTN Nigeria reported positive net additions and continued
to gain value share in the quarter. To further drive subscriber growth increasing the SIM registration
footprint remains a priority.
MTN Nigeria made good progress in the quarter in executing on network investment, improving network quality
and capacity in key cities.
GHANA
MTN Ghana delivered strong growth of 51,1% and 39,7% respectively in data and digital revenue. This was
supported by an increase in the number of data users following the introduction of new data bundles. MoMo
continued to make sound progress and contributed 13% to total revenue.
MTN Ghana increased its subscriber base by 1,6% to 17,6 million. The operation showed some improvements in
overall NPS, supported by an increase in network NPS (QoQ).
IVORY COAST
MTN Ivory Coast recorded good growth in revenue, led by an acceleration of both data and MoMo revenue. Data
revenue increased by 70,1%, benefiting from the expansion of the operation’s 3G network. Digital revenue
continued to gain traction and increased by 33,5%.
MTN Ivory Coast increased its subscriber base by 5,5% to 11,6 million in the quarter, underpinned by the
introduction of attractive data value propositions. NPS, however, was negatively impacted by higher on-net
voice pricing as a result of regulatory requirements disallowing differential pricing for on-net and
off-net tariffs. This adversely affected value NPS in the quarter (QoQ).
CAMEROON
MTN Cameroon continued to operate in a challenging economic environment which negatively impacted on
consumer spending. Despite this, data and digital revenue increased by 18,2% and 13,2% respectively. Data
revenue was supported by strong growth in data users and smartphone penetration while digital revenue was
underpinned by significant growth in MoMo revenue in the quarter.
The operation’s subscriber base declined by 1,0% in the quarter due to lower gross connections as a result
of continued implementation of the subscriber registration rules. MTN Cameroon recorded continued
improvements in NPS in the quarter, supported by network NPS (QoQ).
MTN Cameroon, together with other industry operators, received a sanction from the Republic of Cameroon
Telecommunications Regulatory Board for allegedly not complying with spectrum and subscriber registration
regulations. The penalty was equivalent to approximately US$6,6 million and a one-year reduction in its
licence term (which extends to 2030). MTN is engaging with the regulator and the highest authorities of
Cameroon on this matter.
WECA EXCLUDING NIGERIA - across the rest of the region, subscribers increased by 2,6% in the quarter. Ghana,
Ivory Coast, Guinea-Conakry, Congo-Brazzaville, Guinea-Bissau and Liberia contributed positively to the
region’s subscriber base. This was partly offset by a decline in subscriber growth in Cameroon and a
relatively flat performance in Benin.
MENA REGION
IRAN
MTN Irancell delivered robust revenue growth in the period. This was supported by 64,5% growth in data
revenue. The operation’s subscriber base expanded by 1,0% in the quarter. Improving NPS in MTN Irancell
remains a priority.
OTHER MENA - across the rest of the region, subscribers decreased by 0,4% in the quarter, led down by
declines in Syria, Yemen and Afghanistan. Sudan and Cyprus contributed positively to the region’s
subscriber base.
The financial information on which this quarterly update is based has not been reviewed and reported on by
MTN’s external auditors.
Constant currency information has been presented to illustrate the impact of changes in currency rates on
the Group’s results. In determining the change in constant currency terms, the current financial reporting
year’s results have been adjusted to the prior year’s average exchange rates, determined as the average of
the monthly exchange rates. The measurement has been performed for each of the Group’s currencies,
materially being that of the US dollar and Nigerian naira. The constant currency growth percentage has been
calculated based on the current year constant currency results compared to the prior year results. In
addition, in respect of MTN Sudan, MTN South Sudan and MTN Syria, the constant currency information has been
prepared excluding the impact of hyperinflation.
Fairland
24 October 2017
Sponsor
Deutsche Securities (SA) Proprietary Limited
Quarterly update for the period ended 30 September 2017
Subscribers
(‘000)
Country 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 QoQ %
SEA 52 796 52 872 52 975 54 738 54 279 54 893 54 420 (0,9)
South Africa 30 077 29 805 29 668 30 764 30 231 31 216 30 908 (1,0)
Postpaid 5 198 5 132 5 166 5 185 5 161 5 194 5 227 0,6
Prepaid 24 879 24 673 24 502 25 579 25 070 26 022 25 681 (1,3)
Uganda 9 624 9 891 10 180 10 549 10 861 11 158 10 806 (3,2)
Rwanda 4 015 3 989 4 094 4 062 4 210 3 510 3 575 1,9
Zambia 5 197 5 417 5 392 5 802 5 505 5 575 5 695 2,2
South Sudan 1 126 1 055 892 771 708 685 691 0,9
Botswana (joint venture) 1 826 1 798 1 805 1 821 1 784 1 763 1 746 (0,9)
Swaziland (joint venture) 931 919 945 970 981 987 999 1,2
WECA 102 952 105 560 108 110 111 902 108 665 102 328 100 851 (1,4)
Nigeria 57 045 58 978 60 462 61 970 60 523 53 094 50 308# (5,2)
Ghana 17 004 17 579 18 050 19 296 16 789 17 304 17 590 1,6
Cameroon 9 477 9 648 9 521 9 870 9 749 9 541 9 447 (1,0)
Ivory Coast 8 140 8 236 8 542 9 484 10 399 11 018 11 619 5,5
Benin 3 923 3 962 3 988 4 053 4 162 4 273 4 280 0,2
Conakry 3 075 2 748 2 941 2 563 2 493 2 550 2 696 5,7
Congo B 2 175 2 270 2 333 2 404 2 355 2 345 2 481 5,8
Liberia 1 409 1 443 1 574 1 577 1 495 1 412 1 635 15,8
Bissau 704 696 699 685 700 789 795 0,7
MENA 73 855 74 145 73 613 73 738 73 868 74 547 74 957 0,5
Iran (joint venture) 46 852 47 316 47 837 47 625 48 118 49 041 49 539 1,0
Syria 5 802 5 837 5 899 6 067 5 915 5 915 5 915 -
Sudan 8 800 8 814 7 668 7 490 7 604 7 576 7 450 (1,7)
Yemen 5 335 5 310 5 322 5 252 5 221 5 110 5 089 (0,4)
Afghanistan 6 702 6 482 6 480 6 895 6 597 6 469 6 516 0,7
Cyprus 363 386 407 409 414 436 447 2,5
Total subscribers 229 603 232 577 234 698 240 378 236 813 231 768 230 228 (0,7)
# New definition.
ARPU
(Local currency)
Country 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 QoQ %
SEA
South Africa 82,59* 81,42* 89,95* 92,11* 84,79* 85,24 88,12 3,4
Postpaid 152,19* 149,73* 175,23* 162,14* 147,05* 148,97 149,70 0,5
Postpaid (excluding
telemetry) 265,57* 263,97* 312,01* 290,88* 264,52* 268,57 272,40 1,4
Prepaid 68,30* 67,15* 72,00* 77,54* 72,06* 72,32 75,87 4,9
Uganda 8 462,00 7 528,18 7 526,96 8 114,82 7 635,00 7 399,00 7 699,00 4,1
Rwanda 1 487,72 1 486,82 1 544,73 1 507,62 1 413,31 1 696,89 2 061,66 21,5
Zambia 27,47 26,89 28,09 25,38 21,80 24,54 27,82 13,4
South Sudan 55,11 55,05 70,22 145,63 198,44 257,39 267,73 4,0
Botswana 61,00 63,00 67,00 71,31 64,65 69,00 69,00 -
Swaziland 88,00 91,00 105,54 106,95 102,69 101,16 95,89 (5,2)
WECA
Nigeria 1 078,00 1 086,00 1 047,63 1 100,02 1 131,00 1 171,00 1 407,73# 20,2
Ghana 12,17 12,28 12,73 13,66 12,90 15,92 16,45 3,3
Cameroon 2 052,45 1 952,75 1 981,00 2 046,88 1 844,00 1 850,00 1 884,00 1,8
Ivory Coast 2 771,75 2 705,14 2 802,82 2 738,18 2 683,85 2 530,85 2 236,02 (11,6)
Benin 3 616,00 3 506,59 3 458,95 3 595,94 3 283,25 2 962,55 2 793,69 (5,7)
Conakry 14 791,78 16 409,98 18 657,08 18 393,40 19 926,34 20 093,59 19 890,34 (1,0)
Congo B 4 926,03 5 054,11 4 714,69 4 455,24 4 031,72 4 328,90 3 788,47 (12,5)
Liberia 3,73 3,51 3,34 3,45 2,44 2,59 2,44 (5,8)
Bissau 1 978,20 2 403,63 2 321,77 2 136,85 2 157,54 2 691,26 2 182,31 (18,9)
MENA
Iran (joint venture) 112 513,01 121 147,23 126 364,00 125 604,00 128 907,00 134 721,00 143 178 0,7
Syria 767,08 865,87 1 083,20 1 045,44 1 013,91 1 024,15 1 111,89 8,6
Sudan 17,23 17,69 19,05 22,04 24,00 25,13 26,18 4,2
Yemen 880,20 904,79 921,50 810,82 793,79 824,79 843,85 2,3
Afghanistan 131,93 126,34 135,98 128,59 102,76 117,50 126,09 7,3
Cyprus 16,93 17,15 17,41 16,20 16,08 16,03 15,83 (1,2)
* Restated.
# New definition
ARPU
(US dollar)
Country 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 QoQ %
SEA
South Africa 5,29* 5,47* 6,31* 6,69* 6,34* 6,51 6,69 2,8
Uganda 2,49 2,25 2,23 2,30 2,11 2,06 2,14 3,9
Rwanda 2,01 1,93 1,95 1,87 1,74 2,03 2,45 20,7
Zambia 2,45 2,63 2,82 2,60 2,27 2,68 3,05 13,8
South Sudan 2,06 1,50 1,24 1,95 1,84 2,19 2,27 3,7
Botswana 5,45 5,67 6,33 6,74 6,17 6,70 6,50 (3,0)
Swaziland 5,60 6,11 7,41 7,77 7,75 7,72 7,28 (5,7)
WECA
Nigeria 5,40 5,09 3,38 3,52 3,60 3,61 4,31# 19,4
Ghana 3,13 3,19 3,23 3,27 2,87 3,67 3,73 1,6
Cameroon 3,37 3,29 3,36 3,38 2,98 3,17 3,40 7,1
Ivory Coast 4,55 4,63 4,76 4,51 4,33 4,35 3,99 (8,3)
Benin 5,94 5,95 5,87 5,92 5,30 5,09 4,99 (2,0)
Conakry 1,70 1,83 2,06 2,02 2,16 2,24 2,21 (1,3)
Congo B 8,22 8,66 8,01 7,35 6,51 7,43 6,78 (8,7)
Liberia 3,73 3,51 3,34 3,45 2,44 2,59 2,44 (5,8)
Bissau 3,24 4,11 3,94 3,52 3,48 4,62 3,90 (15,6)
MENA
Iran 3,73 3,99 4,02 3,94 3,86 3,84 4,35 7,3
Syria 2,09 1,80 2,16 2,02 1,96 1,98 2,15 8,6
Sudan 2,83 2,90 3,12 3,41 3,59 3,76 3,92 4,3
Yemen 4,10 3,71 3,69 3,24 3,17 3,29 3,11 (5,5)
Afghanistan 1,92 1,84 2,01 1,92 1,52 1,72 1,84 7,0
Cyprus 18,51 19,33 19,68 17,53 17,10 20,07 18,62 (7,2)
* Restated.
# New definition
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