IHS Global Insight Perspective | |
Significance | MTN has operations in 21 countries across Africa and the Middle East. The South and East Africa region reported a modest 8.8% increase to 26.152 million subscribers, the West and Central Africa region reported a 31.2% increase to 52.859 million, and the Middle East and North Africa region reported a 40.5% increase to 37.014 million. |
Implications | MTN remains well ahead of rival pan-African operators in terms of its total subscriber base and continues to report strong organic growth in most its African operations, although it faces the introduction of mandatory SIM registration in 6 of the 15 countries in sub-Saharan Africa in which it is active. |
Outlook | The operator improved its market share in most of its operations, said outgoing CEO Phuthuma Nhleko. It sees a continuing demand for mobile services in countries where mobile penetration is still relatively low. |
Although the MTN Group's total subscriber base increased by 28.0% to reach 116.025 million by 31 December 2009, its subscriber base in Africa increased by 23.6% to reach 82.784 million (including Sudan) and in sub-Saharan Africa by 22.9% to reach 79.011 million (excluding Sudan). MTN reached the milestone of 100 million subscribers during April (see sub-Saharan Africa: 5 May 2009: MTN Reaches 100 mil. Subscribers).
The MTN Group also reported a 9.2% increase in revenues to 111.9 billion rand (US$15.07 billion), and an increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) of 6.7% to 46.1 billion rand. "The solid performance of MTN operations in most of the countries in which the Group has a presence was achieved despite economic challenges, increased regulatory changes and growing competition,” said outgoing CEO Phuthuma Nhleko in a company press release.
MTN Group Subscriber Base – Q4 2009 ('000) | |||||
Dec 2009 | Jun 2009 | Dec 2008 | Dec 2007 | Annual Growth Rate | |
South and East Africa | 26,152 | 25,460 | 24,032 | 19,329 | 8.8% |
South Africa | 16,067 | 17,231 | 17,169 | 14,781 | -6.4% |
Swaziland | 642 | 556 | 519 | 380 | 23.7% |
Botswana | 1,202 | 1,053 | 969 | 874 | 24.0% |
Zambia | 1,165 | 857 | 693 | 262 | 68.1% |
Uganda | 5,222 | 4,382 | 3,523 | 2,362 | 48.2% |
Rwanda | 1,854 | 1,381 | 1,159 | 652 | 60.0% |
West and Central Africa | 52,859 | 47,052 | 40,274 | 27,999 | 31.2% |
Nigeria | 30,827 | 27,338 | 23,077 | 16,511 | 33.6% |
Ghana | 8,001 | 7,219 | 6,428 | 4,016 | 24.5% |
Cameroon | 4,364 | 4,013 | 3,574 | 2,559 | 22.1% |
Côte d'Ivoire | 4,424 | 4,013 | 3,562 | 2,679 | 24.2% |
Congo-Brazzaville | 1,274 | 1,084 | 823 | 316 | 54.8% |
Liberia | 719 | 567 | 486 | 304 | 47.9% |
Benin | 1,564 | 1,291 | 1,010 | 652 | 54.9% |
Guinea | 1,273 | 1,132 | 970 | 727 | 31.2% |
Guinea-Bissau | 413 | 395 | 343 | 235 | 20.4% |
Middle East and North Africa | 37,014 | 36,675 | 26,346 | 14,025 | 40.5% |
Sudan | 3,773 | 3,025 | 2,647 | 2,090 | 42.5% |
Iran | 23,260 | 19,187 | 16,039 | 6,006 | 45.0% |
Afghanistan | 3,186 | 2,598 | 2,104 | 1,200 | 51.4% |
Syria | 4,249 | 3,550 | 3,539 | 3,109 | 20.1% |
Yemen | 2,343 | 2,131 | 1,859 | 1,507 | 26.0% |
Cyprus | 205 | 184 | 158 | 113 | 29.7% |
Total | 116,025 | 103,187 | 90,652 | 61,353 | 28.0% |
Total Africa | 82,784 | 75,537 | 66,953 | 49,418 | 23.6% |
Total sub-Saharan Africa | 79,011 | 72,512 | 64,306 | 47,328 | 22.9% |
Source: MTN, IHS Global Insight | |||||
RICA Impact: Mandatory SIM Registration Cuts Subscriber Base By 1.164 mil. in Six Months
The key point in the year-end report has been the results of MTN's domestic operation in South Africa, which saw a net decrease of 1.164 million subscribers from 17.231 million in June 2009 to 16.067 million by December 2009 (a 6.8% decrease). This was principally due to the implementation of the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA) during the second half of the year. RICA requires the mandatory registration of SIM cards. The deadline to complete registration is December 2010, but all new subscribers are now required by law to register their personal details when buying SIM cards.
For the first time in the operator's history, the implementation of RICA has resulted in MTN's prepaid subscriber base decreasing. During the year, the total number of prepaid subscribers dropped from 14.415 million in December 2008 to 13.044 million in December 2009. Meanwhile, post-paid subscribers increased from 2.754 million to 3.023 million over the same period. "In line with RICA," said MTN in its year-end statement, "mobile operators have to register subscribers' personal details and to date MTN has collected the details of 5.5 million prepaid customers [nearly a third]. The post-paid segment was not affected to the same degree by the RICA requirements, and showed subscriber growth of 9.8%."
Rival operator Vodacom reported a similar pattern. The operator reported a modest annual increase of 2.5% to reach 27.102 million subscribers by 31 December 2009, but this was a decrease of 1.102 million compared with the 28.204 million reported in September 2009. During the last quarter, post-paid subscribers increased by 12.5% to reach 4.349 million, but following the implementation RICA prepaid subscribers dropped by 1.3 million to 22.636 million (see sub-Saharan Africa: 2 February 2010: Vodacom Reports 40.5 mil. African Mobile Subscribers).
Outlook and Implications
At least 10 African countries are currently also implementing mandatory SIM card registration, and this will also affect MTN's operations in Botswana, Cameroon, Côte d'Ivoire, Ghana, and Nigeria during 2010. In terms of subscriber guidance for 2010, MTN estimated a net increase of 800,000 subscribers in South Africa (compared with a decrease of 1.1 million during 2009), 6.0 million in Nigeria (compared with 7.75 million during 2009), and 800,000 in Ghana (compared with 1.573 million in 2009).
In terms of the impact of RICA on revenue, MTN South Africa's revenue increased modestly by 3.1% to 33.1 billion rand for the year to 31 December 2009, which the operator says "indicates that those pre-paid subscribers lost during the RICA process were not as meaningful to revenue". As a consequence of the disconnection of 1.4 million subscribers, prepaid ARPU increased slightly as those customers who remained on the network continued to spend.
Otherwise, MTN said that in terms of its future outlook competition across its footprint is likely to continue to increase and although economies remain fragile, there are tentative signs of a recovery in economic activity.
The operator said it remains focused on:
- Actively seeking value-accretive expansion opportunities in emerging markets to reduce concentration risk and leverage economies of scale;
- Monitoring infrastructure investments to ensure appropriate levels of capacity and quality of service. The continued investment in fibre and cable requirements to service evolving voice and data requirements;
- Optimising efficiencies including infrastructure sharing, standardisation of systems and processes, rationalisation of suppliers, cost management, and cash optimisation;
- Continued engagement with regulatory authorities in the development and refinement of the telecommunications sector; and
- The implementation of MTN's BEE [Black Economic Empowerment] transaction.