South African Base Declines, Hit by Subscriber Registration, Says MTN

Telecoms

MTN last week reported a modest 5% increase in subscriber numbers to 108,467-million boosted by growth in most of its key markets. But its customer base in South Africa, where the national mobile penetration rate now exceeds 100%, took a dip mainly due to a new regulation requiring pre paid users to register personal details.

It is believed the regulation, which came into effect in August, has proved too onerous for users, hence the reluctance by even existing users to comply. MTN admitted as much, and said in its update that customers in SA fell to 16,419- million down from 17,231-million as of June primarily as a result of the implementation of the new regulation.

MTN trails Vodacom in South Africa but dwarfs by far its rival on the African continent where it is the largest operator. Frost & Sullivan analyst Spiwe Chireka last week said the fall in numbers for South Africa was "a minor glitch not to be concerned about". She predicted other operators -- Vodacom, Cell-C and to an extent Virgin Mobile -- could also potentially report reduced numbers as a result of the new law. MTN is the first to report since the user-registration regulations were introduced.

"When prepaid subscriber registration was introduced in Senegal in 2007, Sonatel -- the market leader there -- lost 6% in subscriber growth numbers and in the Democratic Republic of the Congo the practice has been suspended following the negative effect it had on operators' net additions capabilities, among other things," she said.

In its update, MTN said that the total contribution by regions in Africa and the Middle East remained relatively unchanged. The south and e ast Africa region (which includes SA) provided 23% of the growth, down from 25% in June, while the w est and c entral Africa region and the Middle East and n orth Africa regions contributed 46% (46% as of June) and 31% (30% as of June), respectively. Total subscribers grew to 108,466,000 compared with 103,187,000 as of June, an increase of 5% or an annualised rise of 19,6%.

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