MTN South Africa shows margin improvement

MTN Group CEO Rob Shuter

Operational profit margins at MTN South Africa have shown good improvement in the first quarter of 2018, the emerging-markets telecommunications group said on Thursday.

In the three months to 31 March 2018, the South African operation lifted its margin, when measured using earnings before interest, tax, depreciation and amortisation (Ebitda, a measure of operational performance), by 150 basis points compared to a year ago.

In a quarterly update, MTN said group subscribers rose by 1.9% quarter of quarter, with net additions totalling 4.1m subscribers. Voice traffic increased by 24.2%, while data traffic rose by 56.7%. Group service revenue was up 9.1%, with group data revenue rising by 26.9% on a constant-currency basis.

The South African business recorded year-on-year service revenue growth of 2.5%, supported by data and digital revenue growth — up 12.1% and 17.7% respectively. Outgoing voice revenue fell by 9.2%, while data traffic jumped 49%, supported by a 14% increase in active data users.

MTN South Africa’s Ebitda margin expanded to 35% thanks to cost efficiency programmes and the increase in service revenue. The operation invested R1.7bn in the network in the first quarter, on top of already heavy spending in 2016 and 2017.

The local subsidiary reported 132 000 net post-paid subscriber additions, mainly in the consumer segment. The enterprise business segment “remains challenged”, MTN said, adding that it “now has the leadership team in place” that is “executing on a turnaround plan focused on improving customer retention and acquisition”.

Prepaid net additions in the quarter came in at 536 000.

In prepared remarks, group CEO Rob Shuter said MTN continued in the quarter to focus on “operational execution across our markets, leveraging off the strong network investment of the past few years”.

“This allowed us to deliver an acceleration in service revenue growth to 9.1% (constant currency), led by MTN Nigeria and MTN Ghana.”

He said digital service revenue is a “material opportunity for the group, led by MTN Mobile Money and rich-media services”. Mobile Money revenue increased 52.4% year on year. — © 2018 NewsCentral Media

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