MTN Reaches 141.6 Mil. GSM Subscribers in December 2010

While the MTN Group's total subscriber base increased by 22% to reach 141.597 million by 31 December 2010, its subscriber base in Africa increased by 20.5% to reach 99.796 million (including Sudan) and also by 21.9% to 96.339 million in sub-Saharan Africa (excluding Sudan). In terms of future subscriber growth MTN is giving guidance of 16.925 million net new additions during 2011.

The MTN Group also reported a 3% increase in revenue to 114.7 billion South African rand (USD16.6 billion), 10% increase in EBITDA to ZAR50.5 billion (USD7.3 billion), and an 18% increase in attributable profit to ZAR17.3 billion (USD2.5 billion). The effect of the strengthening of the rand against other currencies has significantly dampened the reported results, with revenue (in constant currency) otherwise increasing by 14% to ZAR127.3 billion (USD18.5 billion), and EBITDA otherwise increasing by 23% to ZAR56.7 billion (USD8.2 billion).

In terms of subscriber growth, one of the challenges facing MTN has been mandatory SIM card registration in some countries, although the operator has reported a strong level of registration. In South Africa, the operator said that 81% of the pre-paid subscriber base had registered by 31 December 2010, ahead of the extended deadline of 30 June 2011. In Ghana, MTN said that 70% of the subscriber base is registered, with a deadline of June 2011, and in Nigeria some 34% of the subscriber base is now registered. Since 14 February 2011, all new SIM cards in Nigeria are being sold partially active in line with regulatory requirements, giving customers 30 days to register the SIM card during which time they can only receive calls. In terms of subscriber guidance, MTN estimates that there will be 2 million net new additions in South Africa during 2011, 4.2 million in Nigeria and 390,000 in Ghana.

Outlook and Implications

In terms of its future vision, MTN said in its year-end results that its "vision is to be the leader in telecommunications in emerging markets", adding that "the board will continue to evaluate and consider value accretive opportunities going forward. However, due to the limited number of such opportunities, the board is confident that growth aspirations can be accommodated within the imperative of improved short term returns to shareholders".

In its year-end results, the operator said that it recognises the importance of evolving its business as the industry matures and converges and as consumers demand broader product offerings. Even though MTN's 21 markets are at varying stages of development, a number of data and value-added service initiatives continued to gain momentum during 2010. These notably included the launch of Mobile Money, the investment and upgrade of network and IT infrastructure to support converged and IP-based services including 3G and WiMax, and investment in undersea cables and fibre transmission both on a national and international level. In order for MTN to continue to operate at historical levels of profitability and maintain its competitive edge, the group has embarked on structural cost efficiencies and savings initiatives, notably including the adoption of an infrastructure tower-sharing strategy to pursue more extensive sharing of passive infrastructure and fibre.

MTN has seen strong continued revenue growth from data services, which is offsetting revenue decreases from interconnection due to lower termination rates in some markets, with group revenue from data having grown by 48% compared to the previous year. The operator is continuing its roll out of 3G services and WiMAX in key markets. In South Africa, data revenue has grown to 19% of total revenue, up from 14.8% in 2009, 12.4% in 2008 and 11.0% in 2007. MTN South Africa reported 9.2 million packet data users, 1.6 million smartphones, and 946,000 modems (including USB dongles). In Ghana, data revenue increased by 87% compared to the previous year and MTN reported 166,000 3G subscribers by 31 December 2010 and 44,000 dongles. And in Nigeria, MTN reported that 40,000 3G handsets and 150,000 dongles and were sold during 2010. The operator has also seen success with its mobile money service, which MTN has now launched in 11 countries. By 31 December 2010, MTN reported a total of 4.3 million mobile money subscribers, split between 1.838 million in Ghana, 1.403 million in Uganda, 691,000 in Cote d'Ivoire, 231,000 in Rwanda, and 120,000 in Benin.