Global Insight Perspective | |
Significance | With 40.051 million subscribers, this is equivalent to a 73% increase in MTN’s subscriber base after the acquisition of Investcom during the year, a 42.8% increase when Investcom’s operations are consolidated, and a 36% increase if Investcom’s operations are excluded. |
Implications | The MTN Group also recorded a 49% increase in revenue to 52 billion rand and a 53% increase in EBITDA to 22 billion rand. MTN says that its revenue increase was driven mainly by the acquisition of Investcom and increase in subscriber numbers. |
Outlook | The operator says it will continue to focus on rolling out its networks and, after acquiring Investcom, VGC Communications and Arobase will continue pursuing strategic expansion opportunities to diversify earnings. |
The MTN Group’s profile has changed significantly following a series of acquisitions in the last year (see Sub-Saharan Africa: 2 May 2006: MTN Agrees to Acquire Investcom LLC for US$5.53 bil.). Investcom is now fully consolidated into the group, which is now organised into three operating regions: South and East Africa, West and Central Africa and the Middle East and North Africa. In addition to the acquisition of Investcom in May 2006, so far this year MTN has also announced the acquisition of Arobase Telecom in Côte d’Ivoire (see Côte d’Ivoire: 5 February 2007: MTN Looks to Acquire Arobase Telecom) and Victoria Garden City Communications Ltd in Nigeria (see Nigeria: 23 January 2007: MTN Nigeria Acquires VGC Communications Ltd).
The group’s subscriber base of 40.051 million has increased by 73% if the acquisition of Investcom and its operations in nine countries is not included. If these are included, its subscriber base has grown by 42.8% from 28.05 million in December, and 34.8 million subscribers as of 31 September 2006 (see Sub-Saharan Africa: 2 November 2006: MTN Reaches 34.8 mil. Subscribers). Investcom operations have increased by 38% in the six months since July 2006 to reach 8.4 million subscribers and if these are excluded from the group totals then year-on-year growth was 36%. MTN says that its strong organic growth in South Africa and Nigeria has underpinned growth.
MTN Group Subscriber Base, 2005 – 2006 (Thousands) | |||
Dec 2006 | Dec 2005 | Year-on-year growth | |
South and East Africa | 15,517 | 12,281 | 26.4 |
South Africa | 12,483 | 10,235 | 22.0 |
Swaziland | 268 | 213 | 25.8 |
Botswana | 600 | 479 | 25.3 |
Zambia | 187 | 97 | 92.8 |
Uganda | 1,595 | 982 | 62.4 |
Rwanda | 384 | 275 | 39.6 |
West and Central Africa | 19,622 | 13,149 | 49.2 |
Nigeria | 12,281 | 8,370 | 46.7 |
Ghana | 2,585 | 1,820 | 42.0 |
Cameroon | 1,783 | 1,248 | 42.9 |
Cote d'Ivoire | 1,625 | 1,080 | 50.5 |
CongoBrazzaville | 280 | 210 | 33.3 |
Liberia | 218 | 109 | 100.0 |
Benin | 476 | 268 | 77.6 |
GuineaConakry | 276 | - | - |
GuineaBissau | 98 | 44 | 122.7 |
Middle East and North Africa | 4,912 | 2,624 | 87.2 |
Sudan | 1,066 | 269 | 296.3 |
Iran | 154 | - | - |
Afghanistan | 218 | - | - |
Syria | 2,237 | 1,465 | 52.7 |
Yemen | 1,161 | 825 | 40.7 |
Cyprus | 76 | 65 | 16.9 |
Total | 40,051 | 28,054 | 42.8 |
Source: MTN | |||
Outlook and Implications
MTN says that the focus for 2007 is on continuing to drive regional synergies, taking advantage of opportunities within the value chain and improving operational efficiency. The operator says it will continue to focus on rolling out its networks and pursuing strategic expansion opportunities to diversify earnings.
A key area for MTN is that it will focus on implementing money/payment solutions in its key markets to facilitate the transfer of funds in under-serviced markets. In Nigeria, MTN launched a new service called X-Change, which it describes as an electronic wallet through which subscribers purchase airtime and make payments from ATMs (automated teller machines), ConnectStore outlets and selected external ATMs. The service has helped MTN to retain subscribers and reduce its churn level, and has also increased minutes of use.