MTN sees steady subscriber growth

MTN SA saw 22% growth in subscriber numbers in the past year, from 10.2 million to 12.5 million.

This growth is in line with the company's half-year projections. CEO Phuthuma Nhleko previously said the company would add two million subscribers by December. MTN counts a subscriber as one who has made a revenue-generating call within the past 90 days.

MTN says in a SENS announcement the average revenue per user (ARPU) for SA increased 1% to R94 in the prepaid segment, compared to the prior period, due to new packages and competitive tariffs.

Postpaid ARPU continued its downward trend, at R487 for the year, due to increased connections of lower-end packages, the company says.

MTN says establishing customer-centric processes and a clear value proposition for each market that it serves was a major focus for its South African operations in the past year.

Internal campaigns to improve customer service across all levels of interaction show promising results and reflected in MTN securing a number of sizeable tenders in the corporate market, the company says. "MTN SA maintained its market share for the year at 36%."

Innovations during the year included MTN@Access, an entertainment portal focusing on music, games and World Cup soccer. Infrastructure enhancements also continued, with 263 new base stations built, boosting the company's base stations to 4 932.

MTN's banking product also made progress during the year, recording 83 000 subscribers, the company says.

Analysts say MTN has shown a good growth rate. However, the South African market is approaching saturation and subscriber growth is bound to slow down unless MTN can win clients from rivals Vodacom and Cell C, says Frost and Sullivan analyst Fisher Kamanga.

MTN previously said there were still ample opportunities for subscriber growth in SA, even at estimated saturation levels of 70%. International markets grew by about 120%-150%, said Ashraff Paruk, MTN SA's head of business strategy and product innovation.

Vodacom, Cell C, Virgin Mobile and several analysts support the view that mobile growth opportunities abound in SA.

Cell C's head of corporate affairs Zeona Motshabi previously said opportunities existed within the living standard measures three to seven.

However, BMI-TechKnowledge senior analyst Richard Hurst notes the possibility of reaching the penetration levels of around 120% enjoyed by the Scandinavian states seems to be ambitious in SA.

"Given the socio-economic conditions in SA, if we were to achieve these levels of penetration, network operators would have to develop some innovative products, in terms of pricing and access, in the near future," he says.

Earlier this year, Virgin Mobile CEO Peter Boyd said the company had reduced its subscriber targets for the year. Boyd would not reveal the company's revised subscriber targets, nor give specific reasons for the downward move. However, the company said, shortly after its July launch, that it hoped to have between 200 000 and 300 000 users in 18 months.

Vodacom, which says it has 59% of the local market, reported a 28.1 % increase in subscriber numbers in November, bringing its local customers to 20.2 million.

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