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MTN SA makes progress on profitability

 

Mobile phone operator MTN’s efforts to boost profitability in its troubled South African operation are starting to pay off even sales rose slightly in the 2015 financial year. By Gugu Lourie


MTN South Africa, the country’s second biggest mobile phone operator, on Thursday reported a 2.9% rise in revenue to R40 billion for the year to end-December 2015, driven main by healthy growth in data revenue.

The local telco, which was last year faced by strikes and saw resignation of CEO for its South Africa operation, also delivered good customer growth on the back of  attractive voice and data packages.

MTN South Africa’s total subscribers increased by 9.3% to surpass  30 million customers. The prepaid segment experienced the biggest gain, with a 12.3% hike to 25.3 million subscriber for the 2015 financial year.

The appointment of Mteto Nyathi as the CEO of MTN South Africa seems to have paid off for the mobile phone operator.

Competition in the mobile phone space has been hotting up as many more new players are entering the saturated market, since they see potential for more growth especially in the provision of mobile data.

Last year, FNB, the oldest bank in South Africa, started offering its own SIM cards to its customers, setting its sights on growing market for users to take all telecoms service from it and becoming the first South African bank to offer mobile services.

In May 2015, a mobile virtual network operator (MVNO) Me&You Mobile entered the market and promised to shake up the South African mobile market. While MTN South Africa has been hard hit by an industrial action and has appointed a new CEO Mteto Nyati to turnaround the business.

Despite stiff competition, MTN South Africa continued to deliver stellar growth in its data segment. The firms’ data revenue rose 37.2% and contributed 31.7% to total revenue.

“This was supported by strong 3G and LTE network rollout as well as increased 3G and LTE device penetration,” the company informed investors on Thursday.

It added that the number of smartphone on its network was up 10.6% to 7.6 million.

During the period, MTN South Africa added 966 new 2G sites and 1 593 largely co-located 3G sites and 3 148 LTE sites as part of its strategy to improve the network quality in order to deliver good services to its data hungry subscribers.

The telco also spent R11 billion on capex in the 2015 financial year, which was 93% higher than 2014.

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