MTN reports strong subscriber growth
For the year ended 31 December 2008 MTN Group reports that revenue increased by 40% to ZAR102.5 billion (USD10.02 billion) from ZAR73.1 billion in 2007. The increase was driven by strong growth in subscribers, and was further enhanced by the relative appreciation of operating currencies to the Rand. The group’s earnings before interest, tax, depreciation and amortisation (EBITDA) was up 36% to ZAR43.2 billion, although EBITDA margin declined by 1.4 percentage points to 42.1% due to increased network maintenance costs, higher fuel costs and regulatory levies. Net profit rose 43.8% to ZAR17.1 billion.
MTN reported customer additions of 48% year-on-year, equating to almost 30 million subscribers to end 2008 with a total of 90.7 million customers. The majority of additions came from MTN Irancell with an increase of 10 million, and MTN Nigeria which added 6.6 million customers to raise its total from 16.5 million at 31 December 2007 to 23.1 million a year later. MTN Irancell’s market share increased to 37% from 23% as it increased its subscriber base to 16 million.
In its home market of South Africa, subscribers increased by 16% year-on-year to 17.2 million. Post-paid subscribers grew by 10% to 2.8 million, mainly driven by the launch of the MTN Anytime package in September 2008, which attracted more than 259,000 subscribers. Pre-paid subscribers increased by 17% to 14.4 million thanks to the success of MTN Zone, which attracted 6.6 million subscribers in the eleven months after launch in February 2008. Pre-paid average revenue per user (ARPU) increased by 5% to ZAR97 a month, while post-paid ARPU increased by 2%. However, the blended ARPU was negatively impacted by the changing mix between post-paid and pre-paid subscribers.
Looking forward, MTN says it is ‘cautiously optimistic about its prospects for 2009.’ The operator said it will look to maximise ‘infrastructure sharing,’ having already embarked on a long-distance fibre network rollout, together with Neotel and Vodacom in South Africa. MTN Group incurred expenditure of ZAR28.3 billion on CAPEX in 2008, an 84% increase over 2007. MTN also invested approximately ZAR250 million in 2008 to gain access to significant submarine cable capacity through the SAT-3, WASC, EASSy and EIG initiatives. The company also said it will continue to seek out acquisition and consolidation opportunities.
2009 to date, MTN says its South Africa operation has added 80,000 net new subscribers, Nigeria 2.2 million, Iran 1.5 million, Ghana 300,000, Cameroon, 200,000, Cote d`Ivoire 200,000 and Uganda 300,000.