MTN upbeat on partnership plans after setbacks

THE past year has not been smooth sailing for the MTN Group, with a continuing battle with the Nigerian Communications Commission and challenges in its home market.

But it’s not all bad news for MTN South Africa.

From January to March this year, data revenue was up 22.9%, contributing 32.8% of overall revenue.

This can be attributed to MTN’s push to increase handset sales by partnering with original equipment manufacturers such as Huawei and promoting low-cost smart devices to the lower-LSM market in order to increase data traffic while boosting sales of devices.

This strategy, as well as partnerships with retailers such as Pep, is a way for MTN South Africa to improve on the 18% decline in handset revenue that it experienced last year.

The group also plans to bolster its capital expenditure, from R8-billion to more than R11-billion in the next two years, on its fibre-optic line between Polokwane in Limpopo and Ladysmith in KwaZulu-Natal, and improving its service.

Alpheus Mangale, chief enterprise officer at MTN Business South Africa, said MTN was turning its growth strategy outwards, putting a strong focus on acquisitions through the MTN Business Partner Programme.

This unit will establish itself as a partner with global businesses looking to expand into Africa, such as Amadeus Capital Partners, a UKbased investment company that has invested in Travelstart, a Cape Townbased online travel agency.

The strategy is also to partner with small businesses, mobile virtual network operators and start-ups, among others.

MTN Business South Africa hopes to become a key player in providing fibre connections to homes and businesses. Its acquisition of Smart Village — bought from MultiChoice in September last year — will give it access to more than 30 000 premises, a big step in its bid to position itself as the leader in fibre to the home in South Africa.

“MTN Business will continue to pursue aggressive acquisition of territory through building its own fibre, acquisitions and partnerships. We will also provide wholesale access to our active fibre network customers,” said Mangale.

MTN’s growth plans come after it announced weak results in the past financial year. In 2015, revenue increased 2.9%, a modest improvement on the 3.9% fall in revenue in the previous financial year. MTN was not particularly proud of the results, although they were a step in the right direction, said CEO Mteto Nyati on Thursday.

Competitor Vodacom, on the other hand, reported on Monday a 5.2% increase in revenue in the year to end-March. This stemmed from a prudent move to direct capital expenditure towards creating a “reliable network, which made them maintain their market leadership

A big step in its bid to position itself as the leader in fibre to the home in South Africa

position in South Africa”, said Sibonginkosi Nyanga, an equity research analyst at Momentum SP Reid Stockbrokers.

MTN attributed its lacklustre performance to a strike, which affected operations last year, as well as several network disruptions because of its roll-out process. The company had committed itself to interacting in a more dynamic way with employees and unions, Nyati said.

MTN’s lack of competitive pricing has also been highlighted. Nyati said the company was working to lower its price points, to compete effectively.

MTN South Africa is to step up its customer satisfaction drive. Part of this involves restructuring traditional cellphone contracts so that customers can structure their call, data and repayment terms to suit their needs. Customers will have the option of taking out a contract over one month, six, 12 , 18, 24 or 36 months.