Nigeria: MTN Group's Revenue Increased 15 Percent, Subscriber Base 1 Percent in Q1 2016

Telecoms

The MTN Group, Wednesday announced a slight increase in its revenue and subscriber base for the first quarter of 2016, attributing the slow rise to the decline in the number of subscribers from its Nigeria and Uganda markets.

The MTN Executive Chairman, Phuthuma Nhleko, who made the disclosure during the group's annual general meeting held yesterday in South Africa, said in a statement that "As at 30 April 2016, the company increased its subscriber base by approximately one per cent to 230.3 million year-on-year (YoY). This was largely impacted by the seven per cent decline in subscribers in MTN Nigeria and the 11 per cent decline in MTN Uganda, mainly as a result of the non-compliant subscriber deregistration process in these countries which was only completed in quarter one of 2016."

MTN South Africa however reported a seven per cent increase YoY in subscribers supported by improvements in the prepaid distribution channel while MTN Ghana showed a healthy subscriber growth increasing its subscriber base by 20 per cent.

According to the statement, which was made available to THISDAY, the Group revenue increased by 15 per cent YoY, supported by a 21 per cent decline in the average rand exchange rate against the naira together with a 23 per cent decline in the average rand exchange rate against the US dollar compared with the previous period.

It said organic revenue increased marginally by 1 per cent, impacted by lower revenue growth in MTN Nigeria, MTN Uganda and MTN Cameroun.

The statement further explained that organic data revenue across the group continued to deliver satisfactory growth in most of its markets, increasing by 19 per cent YoY. Data now contributes 24 per cent to total revenue compared with 21 per cent for the same period last year. Data revenue was supported by healthy growth in MTN South Africa and MTN Ghana. MTN Nigeria's data revenue declined 12 per cent mainly due to the withdrawing of regulatory services by the Nigerian Communications Commission (NCC).

The statement said MTN Nigeria's organic revenue was down six per cent, mainly due to uncompetitive pricing arising from the suspension of regulatory services and regulatory restrictions that obliged operators to seek permission from customers to charge out-of-bundle rates upon the depletion of data bundles.

In all, MTN South Africa continued to show positive momentum and increased revenue four per cent on a yearly basis.

The rise is attributed to the 17 per cent increase in handset revenue and 23 per cent growth in data revenue driven by a 59 per cent yearly increase in data traffic as well as a 55 per cent increase in digital revenue.

The Group's earnings before interest, tax, depreciation and amortisation (EBITDA) margin remains under pressure. MTN Nigeria's EBITDA margin was negatively impacted by dollar denominated costs related to the weaker exchange rate, costs associated with the second tranche of the tower transaction, increased use of build-to-suit sites and costs associated with the subscriber registration process.
Source: This Day 26 May 2016