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MTN group lists 200m subscribers, loses 3.2m

By Prince Osuagwu

MTN Group, yesterday, announced that it had attained 200 million subscribers milestone across its 22 operations in Africa and the Middle East.

This is even after cutting off about 3.2 million Nigerian subscribers from its network.

In celebration of the feat, the company announced a R200 million initiative to improve the quality of education across its markets in Africa and the Middle East in the next two years.

The cut off of Nigerian subscribers was notwithstanding the impressive impact the region made in the overall revenue standing in its half year report.

The company posted a 22 percent rise in first-half earnings as foreign exchange gains from international operations.

Nigeria was the biggest revenue earner in the six-month period, although earnings from the country and other international operations were boosted by a 16 percent decline in the South African rand.

However, MTN said it had to cut off 3.2 million users out of its 55.2 million customers in Nigeria in July due to regulations demanding that all subscribers be registered

Group President and CEO of the company, Mr. Sifiso Dabengwa, while announcing the development said that as a multinational telecommunications company operating in emerging markets, MTN had been exposed to a particular opportunity of making meaningful contribution to social development.

Dabengwa also added that “due to the lack of access to quality education and infrastructure, and low literacy rates in most of these countries, MTN has chosen to direct a significant amount of its corporate social (CSI) spend towards education over the next two year. This will provide people with the skills, knowledge and confidence they need to make positive decisions about their lives.

“As seen in MTN’s 2013 interim results released today, (yesterday) MTN is a growth company with a solid performance record and an inspirational vision to lead the delivery of a bold new digital world to its customers.

It will continue to share the fruits of its success with customers and communities through, among others, offering affordable and innovative services, as well as investing in social upliftment and network infrastructure to improve the quality of its services” he added.

Meanwhile, stiff price competition between the four telecoms providers in its home turf, including the  Vodacom, Cell C and Telkom, hit MTN’s margins. MTN said its South African EBITDA margin fell by 2.1 percentage points in the first half, from 35.4 percent a year ago. “The focus on costs for South Africa is going to be important as we deal with this kind of structural pricing situation that we have seen during the first half of the year,” Chief Executive Sifiso Dabengwa said in a presentation.

MTN’s South African subscribers shrank by 1.5 percent to 25 million in the first six months, while revenue declined by 1.4 percent from the previous year. The numbers were worse than expected. They have clearly not kept up with the market,” said an analyst who asked not to be identified because he is not allowed to give named quotes to media.

The company added 12.2 million new users in the first six months, in line with a 21.1 million subscribers target for the year. Dabengwa said MTN was still in talks regarding repatriation of a $400 million loan from Iran and a further $50-$200 million in .

He said last month’s resignation of chief financial officer Nazir Patel was not related to its operations in Iran, as some media reports have speculated.

MTN, which failed to clinch a much coveted licence in Myanmar earlier this year, said it had dropped talks to acquire Neotel, the South African unit of India’s Tata Communications. MTN’s diluted headline earnings per share totaled 649 cents for the six months to end-June, compared with 532 cents last year. Headline EPS, the main profit gauge in South Africa, excludes certain one-time items.

It had flagged earlier this month its results would likely rise by as much as 25 percent.

Group revenue rose nearly 10 percent to 65.2 billion rand ($6.53 billion), and subscribers totalled 201.5 million, a 6.5 percent increase. MTM shares closed 1.6 percent higher, ahead of the benchmark Top-40 index which was up 0.9 percent.


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