MTN's latest quarterly update shows a decrease in group revenue, largely due to unfavourable exchange rate movements.
The group's total revenue, for the three months ended 30 September, declined by 13.4% while overall service revenue fell 14% year-on-year.
However, on a constant currency basis, the group's total revenue for the third quarter of the year actually increased by 6.9%, and group service revenue was up 7.4%.
"Our key growth drivers of data and digital services performed well with revenue growth of 31.4% and 19.6% respectively," says MTN group president and CEO Rob Shuter.
Data revenue refers to access data revenue only and digital revenue comes from Mobile Money and value-added services.
Data traffic for the third quarter of 2017 continued to grow strongly and was up by 125% year-on-year, while voice traffic (billable minutes) also increased by 9%. Active MTN Mobile Money customers increased quarter-on-quarter by 10.6%, to 19.8 million across the group.
"In the quarter, we accelerated our network investment programme, rolling out 1 641 3G and 2 102 4G sites (including co-located sites), supporting the demand for data services. In SA and Nigeria, the network investments are showing encouraging improvements in network quality and NPS [Net Promoter Score]," adds Shuter.
This as the group says its year-to-date capital expenditure was R18 billion, up 1.1%.
Subscriber decline
The quarter, however, saw a decline in group subscribers, with a drop of 0.7% quarter-on-quarter and a decline of 1.9% year-on-year to 230.2 million at the end of September.
MTN says the subscriber decline was largely driven by lower reported subscribers in Nigeria, where the telco is continuing to refine its active subscriber definitions. There was also an impact from the disconnection of 750 000 subscribers in Uganda as a result of regulatory SIM registration requirements.
The telecoms operator, which operates in 22 countries across Africa and the Middle East, reported a 3.6% drop in group subscribers to 231.8 million during the six months to 30 June, also impacted by an initiative to modernise subscriber definitions. Shuter says this modernisation is expected to be complete by year-end.
On a constant currency basis, MTN Nigeria reported an 11.2% increase in total revenue supported by data revenue growth of 72.1%. MTN Irancell's total revenue grew by 16.8%.
"In Nigeria, our month-on-month gross connections have increased, and we experienced stable subscriber market share over the quarter while driving increased value share," says Shuter, despite a 5.2% drop quarter-on-quarter in subscribers in the West African nation, to around 50.3 million.
"We remain on track to meet our financial year 2017 guidance despite continued challenging economic growth across our markets," he adds.
SA in flux
The South African subscriber numbers were down by 1% to 30.9 million quarter-on-quarter but were actually up by 4% year-on-year when compared to the 29.7 million local subscribers it had in the third quarter of 2016.
MTN says local subscriber numbers in the third quarter of 2017 were impacted by a 1.3% decline in the prepaid segment, mainly due to higher churn following the withdrawal of a promotion from the second quarter. The postpaid segment, however, grew 0.6% quarter-on-quarter.
"In SA, the prepaid business performed well and progress is being made in the postpaid segment, particularly in consumer postpaid where we now have positive net-adds year to date," says Shuter.
In comparison, rival Vodacom added 2.3 million subscribers in SA in the quarter ended 30 June, growing its subscriber base to 39.4 million users in SA and almost 70 million across its five operations in Africa.
"In line with our strategic initiative to drive a dual-data strategy, we are working on reducing the out-of-bundle data pricing across our markets to stimulate data usage from inactive and low usage customers," adds Shuter. "This is expected to have a short-term impact on data revenue growth but we anticipate elasticity in the mass and high value segments will continue to drive data revenue growth in the medium-term."
MTN SA recorded organic service revenue growth of 5.2%. Data and digital services revenue, which increased by 21% and 27.7% respectively, were supported by a strong prepaid performance as well as the continued recovery of the postpaid consumer segment.
"MTN SA continued to make good progress in improving the quality and capacity of its 3G and 4G network in the quarter with leading network metrics in three of the four metros in the country," MTN says.
Appointments
Shuter says the group further strengthened its management structure with a number of appointments in the last quarter.
"The appointment of Ebenezer Asante as VP of our new South and East Africa and Ghana region, effective 1 October, completes the group executive structure," says Shuter.
Asante was previously CEO of MTN Ghana, a position he held from July 2015 to September 2017.
Other senior appointments in the quarter included Fred Scheppens, who joined as group executive for MTN GlobalConnect (MTN's wholesale business) on 15 October.
Dirk Karl was appointed as group executive for procurement and supply chain management as of 1 October; Serigne Dioum as group executive for mobile financial services effective 26 September, and Ankur Bajpai as group executive for customer value management on 1 September.
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