MTN Sees Subscriber Numbers Up Throughout Africa

M-Cell, the listed telecommunications group that owns South Africa's MTN, has announced that turnover for the last 12 months has risen by 49% to US$1.18 billion. Contributions from operations outside of South Africa have risen to 19% of group revenue. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 35% to US$359 million, despite the impact of the Nigerian start-up. The EBITDA margin declined from 33.5% to 30.3%, due mainly to start-up costs of MTN Nigeria.

Group CEO, Paul Edwards, said that the Nigeria operation had performed beyond expectations. Having paid US$285 million for one of four GSM licences in February 2001, the company was able to launch services in Lagos, Port Harcourt and Abuja by August/September of the same year. "As of the end of March, MTN Nigeria had signed up 327 000 active subscribers, almost doubling business plan estimates of 174 000. Since March the number of subscribers had continued to grow rapidly to close on 420 000," said Lazarus Zim, Managing Director of MTN International.

MTN Nigeria's total revenue of US$126 million was driven by higher than expected ARPU levels, which were around US$60 per subscriber per month, excluding connection fees. Zim pointed out that ARPUs would inevitably decline as the company penetrated deeper into the market.

After a bumpy start, MTN Cameroon has seen its subscribers in this mainly French-speaking country increase by 234% to 224,000. Currently, MTN is running neck and neck with its competitor, Orange, in numbers of subscribers.

In the local market, MTN South Africa was faced with the entry of the third cellular operator, as well as a tight economic environment resulting from the decline in the value of the Rand. "Post-paid subscribers increased by 12%, from 760 000 to 852 000 subscribers. Average revenue per subscriber remained around the US$53.51 mark. Pre-paid subscribers increased by 23% to 3,025,000," said Sifiso Dabengwa, MD of MTN South Africa. The company has also said that about 10% of their GPRS handset owners are trialing their GPRS service. The service is currently being offered completely free of charge while MTN prepares it for a formal launch.

On prospects for the M-Cell Group, Edwards said that MTN had embarked on an expansion drive into Africa. "This strategy is now paying dividends," said Edwards. "It was pleasing to note that at the EBITDA line our International division was positive. Africa's EBITDA contribution to group EBITDA will be significant in the coming year, thereby ensuring that M-Cell will continue to deliver on its record of strong earnings growth. It is particularly pleasing to see the degree to which MTN is diversifying its revenue streams. Last year, we had 4% generated off-shore - this year it has risen to 19% and is expected to exceed 35% within the next two years," he said.

Edwards, who moved from his position as CEO of the Johnnic Group to CEO of M-Cell for the last year, is handing over to Phuthuma Nhleko on 1 July this year.'"

Posted to the site on 17th June 2002