MTN continues work to improve its performance in SA’s competitive prepaid mobile market.
In recent years, SA’s largest mobile operators have seen pressure on their prepaid efforts as consumers have come under strain in an economic downturn, while facing increasing competition from players like Telkom, the country’s fastest growing mobile business.
Where in the past cellphone providers could rely on postpaid or contract customers to give them a constant and predictable stream of income, the shift towards having a great proportion of prepaid customers means companies have to bear the effects of economic shifts that affect consumer spending, more.
On Monday, the group reported that the consumer prepaid segment in its SA unit “continued to face increased competitive intensity”.
This drove a 1.7% decline in prepaid service revenue for the nine months to September, “largely due to pressure on data monetisation”.
“Encouragingly,the overall trend has improved sequentially despite the headwinds,” with a decline of 1.8% in the third quarter, compared to a 2.3% decline in the second.
This comes as MTN Group reported a strong broad-based performance across its markets in the third quarter, led by MTN Nigeria and MTN Ghana.
Highlights of the period included the growth in subscribers to beyond the 300-million mark and MTN Nigeria restoring positive retained income and net equity positions and resuming the payment of dividends, the group said on Monday.
The value of fintech transactions increased by 38% to $342.3bn (R5.84-trillion).
Group service revenue increased by 25.9% in the quarter to end-September and was up 22.6% in constant currency.
In the larger markets, MTN Nigeria (up 57.1%) and MTN Ghana (up 35.9%) spearheaded the service revenue performance.
MTN SA reported growth of 2%, with solid performances in postpaid and enterprise offset by continued pressure in a highly competitive prepaid market.
Last week, rival Vodacom reported that its interim performance in SA had been buoyed by its postpaid business.
The company saw a 1.6% decline in prepaid mobile customer revenue to R13.2bn for the half year to September. Prepaid customers were down 7.4%.
Data revenue grew 40.3% and by 35.4% in constant currency, while fintech revenue increased by 35.7% and was up 23.1% in constant currency.
Total subscribers increased by 5.8% to 301.3-million, with active data subscribers up 9.1% at 165.8-million.
Active Mobile Money (MoMo) subscribers increased by 5.3% to 64.3-million.
Data traffic increased by 26.6%.
The group said the macroeconomic environment in the geographies in which it operated showed relative stability and improvement in the period, which supported its performance in key markets, with more benign and abating inflation and greater stability in local exchange rates.
Group earnings before interest, tax, depreciation and amortisation (ebitda) were 41.1% higher, underpinned by strong topline growth and the group-wide expense efficiency programme.
The group said the focus at MTN SA was to recover the performance of the prepaid segment, while continuing the work to sustain the strong momentum in MTN Nigeria and MTN Ghana, and the turnarounds in other markets within its footprint.
“For fintech, we remain committed to our priorities of accelerating the performance of MoMo PSB in Nigeria and continuing to scale the overall ecosystem across our markets.
“We are also focused on progressing the work on structurally separating our fintech business,” the group said.
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