MTN revises new clients estimate
MTN’s operations in SA and Nigeria aim to add 1-million and 630,000 new subscribers, respectively, by the end of 2017 — far less than 2016’s projections. This is attributable to maturing markets, in which many people have multiple SIM cards, and to negative macroeconomic conditions in the countries in which it operates.
MTN’s operations in SA and Nigeria aim to add 1-million and 630,000 new subscribers, respectively, by the end of 2017 — far less than 2016’s projections. This is attributable to maturing markets, in which many people have multiple SIM cards, and to negative macroeconomic conditions in the countries in which it operates.
In Nigeria, the onerous requirements for customer registration are also taking a toll on the company.
But the group hopes it can still attract new clients from rivals through improving network coverage and capacity as well as competitive products and services.
Following its toughest year in 22 years, MTN is implementing a strategy that it hopes will grow earnings before interest, tax, depreciation and amortisation in Nigeria and SA by as much as 20% in the next two years. Apart from a focus on data, the group is looking to retain subscribers and to understand their needs, especially in countries in which the cellphone market has reached saturation.
The group will spend R34.7bn in 2017, with R11.5bn and R9.5bn of that going to SA and Nigeria, respectively.
MTN SA CEO Mteto Nyati says the game has changed in SA. “It is all about retaining existing customers and getting more out of them,” he said.
Competition in SA has always been fierce but now that there are few people without cellphones, mobile network operators have become innovative with their products and services.
They are using data analytics to understand usage patterns of customers so that they can tailor suitable products. The focus is also more on retaining customers, specifically high spenders. MTN will revamp its website so that customers are able to do everything online that they would have done at MTN stores.
“We are driving overall customer experience,” said Nyati.
By the end of 2016, MTN SA managed to add 175,00 subscribers, taking the total to 30.8-million. Its network failures contributed to this subdued growth.
In Nigeria, despite the effect of regulatory challenges and a disadvantaged competitive position, which was the result of subscriber disconnections and the withdrawal of regulatory services in the first half of the year, the company increased its subscriber base 1.2% to 61.9-million.
MTN Nigeria CEO Ferdi Moolman says the net subscriber guidance for 2017 was lower because the registration of customers is cumbersome. For example, the government wants a permanent and branded structure for registration rather than a temporary and informal one, such as a tent. This has slowed the registration process.
Moreover, the market is saturated, as in SA. But Moolman says it is not about the number of customers any more but the quality. “There is still a lot of space for growth but we are focusing on quality of customers,” he said.
The focus on digital services across the group remains key.
MTN executive chairman Phuthuma Nhleko sees network operators increasingly becoming data companies rather than voice providers.
Asset management Vestact believes MTN will be key in the data revolution across the
THE MARKET IS SATURATED, AS IN SA. BUT IT IS NOT ABOUT THE NUMBER OF CUSTOMERS ANY MORE, BUT QUALITY
continent, being able to deliver content to “hungry customers with hungrier handsets”.
“Music, movies, gaming and other sorts of entertainment, as we have seen in China and other countries and territories that have emerged from ‘developing’ status, take on higher consumption,” it says.
It says that while the numbers have been disappointing, the new management team “inherit a structurally wobbly house in a good location”. But the next year is going to be one of rebuilding and continued infrastructure spend.