MTN closed 0.95% higher on Tuesday, despite releasing what some analysts called a "pedestrian" update in which total revenue grew 6.9% for the third quarter ended-September.
Despite reporting a slight dip in subscriber numbers, to 230.1-million, MTN has grown voice traffic 9% and data revenue 31.4%, as data traffic more than doubled.
But this comes from a "rebased base", said GT247 senior trader Paul Chakaduka.
MTN was forced to disconnect more than 5-million subscribers in Nigeria in 2015, "so you need to have those numbers look significantly better".
MTN was still "just catching up" and should be reporting revenue growth in the 20% to 30% range, he said. "On a readjusted number, in my opinion, it doesn’t look great," Chakaduka said.
MTN is still wrestling with subscriber losses in its key geographies. In Nigeria, the subscriber base declined 5.2% to 50.3-million, which it blames on "the modernisation of subscriber definitions".
MTN has to expand its SIM registration footprint as a "priority" if it is to increase subscriber numbers, according to the firm.
In Uganda, it disconnected about 750,000 subscribers as a result of SIM registration rules and in SA MTN lost 1% of its users, mainly in the prepaid segment after it had withdrawn a second-quarter promotion. Postpaid subscribers were flat.
In Cameroon, MTN’s subscriber base fell 1% and it was fined $6.6m by the Telecommunications Regulatory Board for allegedly not complying with spectrum and subscriber registration laws. However, data growth across the group is strong.
Among its strongest regions were Nigeria, where data usage rose 72.1%; Iran, which grew 64.5%; Ghana, up 39.7%; and SA, which gained 21%.
Sentio Capital portfolio manager Imtiaz Suliman attributed the share price gain to the fact that there were "no accidents" in the update — something shareholders have been primed for since MTN dropped its Nigerian subscriber bombshell in 2015 and for which it agreed to pay R25.1bn in penalties.
MTN said it was on track to meet its financial 2017 targets: in SA that is "mid-single digit service revenue" and a rise of between 0.5% and 1% in margins. In Nigeria, the company is pressing for upper single-digit sales growth.
Chakaduka is also concerned that MTN’s balance sheet will not be able to sustain the sort of dividends it has paid in the past, although Suliman said the "sustainability of MTN’s cash flow seems intact".
MTN had cut its capex budget for 2017 to R30bn at the time of its interim results and said in the update that it had so far spent R18bn of that amount.
Of the 17 analysts surveyed by Bloomberg, only six have "buy" recommendations on the share. Four regard it as a "hold" and seven reckon it is a "sell".
The shares have struggled to make headway in 2017 and are 1.5% down year to date.
That comes despite an almost complete overhaul of its executive under new CEO Rob Shuter.
During the quarter, the firm made four senior appointments across the business. It also named former MTN Ghana CEO Ebenezer Asante vice-president of its South and East Africa and Ghana region.