MTN SA muddles along in tough market

Duncan McLeod

MTN South Africa lost 300 000 customers in the quarter ended September 30, 2019, but still managed to eke out service revenue growth of 0.4%. It ended the period with 28.9 million subscribers.

In the first nine months of the year, MTN Group’s home market reported a 4.6% decline in consumer prepaid service revenue, impacted by communications regulator Icasa’s data expiry rules, out-ofbundle data tariff reductions and a tough economic environment.

However, it said the trend in consumer prepaid revenue in the September quarter was “encouraging”, with the decline moderating to 2.7% year-on-year compared to a 5.1% decline in the previous quarter, also year-on-year.

“We remain focused on returning to growth, supported by stabilising trends in voice and improvements in data,” MTN said.

“In the third quarter, data revenue showed encouraging year-onyear momentum with a return to positive growth recorded compared to a year-on-year decline in the second quarter ended June 2019.”

MTN blamed the fall in subscriber numbers on the discontinuation of a 1GB acquisition promotion in prepaid, which resulted in a 400 000 reduction in subscribers to a closing base at the end of the September quarter of about 23 million. “We anticipate a normalisation of the base and customer profile by the first half of 2020.”

By contrast, the consumer postpaid business delivered service revenue growth of 5.8% year-on-year “in a highly competitive market”.

Wholesale revenue grew by 59.4% year-on-year, and included Telkom roaming revenues for the first six months (this contract ended in June) as well as Cell C roaming revenues for the first four months of the year.

MTN said Cell C fulfi lled all its commitments in line with a revised payment plan. If an accrual basis of accounting was applied to Cell C roaming revenue, MTN South Africa would have recorded service revenue growth of 3.5%. This article is republished with permission from TechCentral