MTN’s share price falls 2.5% after sharp dip in subscribers

MTN’s share price fell 2.51% yesterday to close at R123.62 after the group reported a drop in subscriber numbers for the first quarter of 2017.

The group said its total subscriber base shrank 1.5% to 237 million because of the restatement to subscriber numbers in Ghana, Rwanda as well as in Zambia.

But revenue rose 7.1% in line with expectations of an acceleration to high single digits, compared with low single digits during last year’s matching period, Mergence Investments portfolio manager Peter Takaendesa said.

“There was no material impact on revenue growth, so the subscriber ‘rest must have been mostly low revenue customers,” he said.

MTN Ghana’s customers declined by 2.5 million to 16.7 million as a result of the review of subscriber definitions, while in Zambia, it was down 5.1% to 5.5-million during the period.

MTN Nigeria’s customer base was down 2.3% to 60.5 million because of new regulations that require all subscriber connections and registrations to take place in permanent brick-andmortar structures.

This led to a marked reduction in gross connections across the industry, MTN Group chief executive Rob Shuter said.

“MTN Nigeria has also continued with the process of excluding subscribers whose only activity is receiving incoming SMSes,” Shuter said.

The South African operations lost about 533 000 customers to 30.2 million. However, it is still aiming to add 630 000 new customers by the end of the year.

Shuter said the subscriber numbers were lower than expected and that the group was planning to “further modernise our internal subscriber definitions to more closely align with the changing mix of revenue streams”.

MTN was making progress on “tackling our underperformance” in the postpaid or contract segment in SA, “although it will take time for this to reflect in our financial performance”.

MTN’s contract subscribers declined to 5.16 million from 5.185 million in the fourth quarter of last year.

“The priorities for the South Africa business remain driving network quality, offering attractive value propositions and improving the customer experience,” he said.

MTN Nigeria had a strong start to the year, with an 11.6% increase in total revenue supported by a 71.3% increase in data revenue.

Data growth continues to boost MTN’s performance across its operations. Total data revenue was up 29.4% year-on-year and contributed 20% to total revenue. The group continues to invest in its network in all its operations. So far this year it has invested R4.6-billion. — TMG