Vodacom, MTN neck and neck

Mobile operators Vodacom and MTN are neck and neck in the subscriber race as both report strong growth in subscriber numbers to over 17 million each. The two released their subscriber figures for the quarter ending 30 June yesterday and today.

After briefly falling behind MTN in the subscriber stakes earlier this year, Vodacom again has a narrow lead - with 17.2 million overall and 14.3 million in South Africa. MTN Group says it recorded 17.039 capable subscribers overall and 8.407 million in South Africa.

Relative newcomer Cell C currently has 2.5 million active subscribers.

Vodacom and MTN now both use the same definition of an "active subscriber" - counting such a subscriber as someone who has made or received a revenue-generating call within a 90-day period.

In a statement issued late yesterday, Vodacom said that as of June 30 the Vodacom Group had 17.2 million customers on its networks operating in South Africa and other African countries.

The statement said: "Vodacom South Africa increased its customer base by a healthy 11.3% since 31 March 2005 to 14.3 million customers in an ever more competitive market."

MTN Group announce that as of 30 June it recorded 17.039 million "capable" subscribers on its six networks in South Africa, Nigeria, Cameroon, Rwanda, Swaziland and Uganda. This is a growth of 8.9% since 31 March.

Phuthuma Nhleko, MTN Group chief executive officer, said: "In addition to reporting steady subscriber growth for the quarter, the Group undertook a number of key operational and strategic decisions which are expected to accelerate growth and contribute to increased shareholder value."

These moves include MTN Group`s acquisition of a 51% interest in Loteny Telecom, a cellular operator in the Republic of Ivory Coast which has over 900 000 subscribers on its network.  The Group also entered into an agreement to acquire 100% of Telecel Zambia. These acquisitions will increase the MTN Group`s total subscriber base to over 18 million.

The Group also acquired the remaining 40% in MTN Network Solutions.

Vodacom reports that the Group`s international operations comprise 2.9 million customers, or 17.0% of the total customer base.

MTN`s international operations now account for 50.7% of the total subscriber base up from 48.8% in March. MTN`s international operations recorded a total of 8.632 million subscribers, an increase of 13.0% since 31 March. The statement noted that MTN Nigeria contributed 73.9% or 6.379 million to that subscriber base.

Vodacom South Africa`s customer base comprises 2 million contract customers and 12.3 million prepaid customers, increases of 5.8% and 12.3% since 31 March respectively.

MTN South Africa`s subscriber base consists of 1.457 million post-paid subscribers and 6.950 million pre-paid subscribers, with increases of 4.7% and 5.1% since 31 March respectively.

The rapid growth in the South African customer base is a result of high gross customer connections, combined with low churn for the quarter caused by a clean up of the customer base in March 2005.

Vodacom reports that its South African average revenue per user (ARPU) declined by 8.0% to R150 per month for the three months to 30 June.

It says: "The ARPU was negatively impacted by the increasing proportion of prepaid customers in the total base, as well as lower usage per average customer."

MTN`s blended average revenue per user per month reduced in line with expectations to R169. Pre-paid ARPU of R88 and post-paid ARPU of R555 were recorded.

Noting that it was the first operator to introduce a commercial 3G offering into the local market in December last year, Vodacom says initial uptake is "encouraging". Vodacom currently has 26 341 active 3G users on its network. This is a significant increase over 31 March this year, when it had 10 853.

The number of Vodacom 3G base stations has increased to 964 from 487 in March.

MTN launched its 3G offering this month.

Earlier this month, BMI-TechKnowledge said in a report on broadband and wireless in SA that up to 4.4 million subscribers would be using 3G cellular services by 2009.

Vodacom`s other African operations increased its total customer base by 10.7% since 31 March, to 2.9 million customers. The statement says: "Satisfactory customer growth was enjoyed in all Vodacom`s other African operations, most notably Tanzania with a 14.9% increase in its customer base. However, customer growth has also been negated by higher churn, with the exception of Tanzania.

Vodacom said that in real terms, ARPUs have declined in all the other African operations, offset by the depreciation in the rand. The decline in ARPUs is due to the penetration into the lower spending prepaid market, as well as continued high levels of competition in all of these markets.

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