STIFF COMPETITION
MTN local operations lag ventures in the rest of Africa and the Middle East
MTN GROUP’S local operation is lagging behind its other ventures in the rest of Africa and the Middle East with the company reporting a fall in annual revenue in South Africa.
The cellular operator yesterday registered a 3.9 percent fall in revenue to R38.9 billion for the year to December.
“This was mainly a result of a 36 percent decline in interconnect revenue due to lower mobile termination rates,” MTN said.
It also conceded that it was facing stiff competition from its home rival Vodacom.
“While data revenue only increased 7 percent there was a meaningful improvement in the fourth quarter with mobile data revenue growth of 17 percent when compared to the same period last year (2013),” MTN said, referring to its South Africa venture.
In comparison, the company’s revenue elsewhere climbed sharply.
In Iran, MTN’s revenue shot up by 22 percent last year, in Cameroon it climbed 19 percent, in Uganda revenue improved by 18 percent, in Ivory Coast it added 17 percent, in Nigeria revenue rose by 12 percent and in Syria it gained 7 percent.
It reported that its number of local subscribers increased by 8.9 percent to 28 million.
MTN SA also reported 2.7 million in net additions in the second half versus the 430 496 net disconnections that were recorded in the first half of the year.
MTN explained this reversal as being due to its move to change its prepaid offerings.
The group’s local revenue growth between the third quarter of 2014 and the fourth quarter stood at 42.3 percent.
MTN’s total worldwide subscribers grew by 7.5 percent to 223.4 million, while revenue increased by 6.4 percent to R146.2bn.
MTN said its 2014 results reflected a challenging year, affected by aggressive price competition, increased regulatory requirements and pressure on consumer expenditure.
“The sharp decline in the oil price in the second half of the year had a marked impact on the economies and exchange rates of a number of African and Middle Eastern countries.
“Notwithstanding these conditions, most of MTN’s large and small operating companies showed promising improvements in operational performance,” MTN added.
Commenting on the government’s decision to task Telkom with the national broadband roll-out project, MTN chief executive Sifiso Dabengwa, said that there was no basis for the group to challenge the decision.
“The government is a significant Telkom shareholder and decided to use that as the main agency, it boils (down) to a question of what is the commercial arrangements they have,” he said.
“I don’t think we have basis of challenging that,” he added.
Ahmad Farroukh, MTN SA chief executive, said the group was looking at outsourcing some of its business non-core operations to local firms.
MTN declared a final dividend of R8 a share, making the total annual dividend R12.45 a share, up from R10.35 last year.
MTN shares closed up 0.87 percent at R210.28 – With additional reporting by Reuters