MTN lost 1.2-million subscribers in SA in the first quarter

MTN lost 1.2-million subscribers in its home market in the three months to end-March as prepaid customers left the network, the mobile operator said in a quarterly report on Thursday.

The group had 30-million subscribers in SA at the end of March, from 31.2-million at the end of December. While the postpaid subscriber base grew, the prepaid base shrank by 5%, weighing on revenues.

Prepaid service revenues fell 5% because of out-of-bundle price reductions “and a challenging economic environment”, MTN said.

“We expect that prepaid service revenue will remain under pressure for a few quarters, before we see recharge resilience and changes in customer behaviour drive up in-bundle service revenue.”

MTN’s service revenues from SA grew 4.6% year on year, within the group’s medium-term target of mid-single-digit growth. This was thanks to “a strong performance” from the wholesale business, which leases network capacity to Telkom and Cell C.

MTN said group service revenue rose 10% year on year, meeting its medium-term guidance of double-digit growth.

“MTN’s positive commercial momentum continued in the first quarter with a pleasing operational performance across the markets, led by SA, Nigeria and Ghana,” group CEO Rob Shuter said.

Total subscriber numbers rose 2% in the quarter to 236.6-million.

In Nigeria, MTN’s biggest but most troublesome market of late, the operator said it “reported a solid quarter” with service revenues up 13.4% compared to a year before and profit after tax up 50%.

MTN plans to list its Nigerian business in May as part of a settlement with regulators in that market. The operator said it would redeem preference shares in MTN Nigeria, of which MTN Group’s share is about $315m (R4.5bn).

In April, MTN’s e-commerce joint venture, Jumia Technologies, listed in New York, resulting in a dilution of its shareholding from 29.7% to 18.9%. That stake was worth $560m on Monday, or about 4% of MTN’s market capitalisation of R195bn.

Meanwhile, MTN said it would raise $61m by selling its shareholder loan in American Tower Corporation (ATC) Ghana to the company.

MTN also said it had launched Africa’s first instant-messaging platform, “Ayoba”, in Ivory Coast and Cameroon, and it planned further rollouts in other markets in the second half of the year.

It would integrate payments into the Ayoba service, it said.

hedleyn@businesslive.co.za