MTN loses 300,000 South African subscribers in three months

MTN is having a tough time in South Africa, with local subscribers falling by 300,000 in the past quarter, declining to 28.9 million. 

Across all its 21 operations, however, service revenue rose 9.6% in the three months to end-September from the same period last year - thanks largely to strong growth in Nigeria and Ghana. In South Africa, revenue only rose by 0.4%.

It blamed the limp economy, the implementation of lower out-of-bundle data prices, new data usage rules and unpaid roaming revenue from Cell C for the weak revenue growth in South Africa.

In May last year, Cell C began using MTN’s network, especially in smaller cities and rural areas where it doesn’t have its own coverage – after previously roaming with Vodacom. In August, MTN said Cell C left it with unpaid bill of R393 million for these services. But on Wednesday, MTN said Cell C are paying back this money, and "that payments received since June 2019 have remained on schedule".

“We remain in discussion with Cell C regarding a revised roaming agreement.”

MTN saw a 4.6% decline in consumer prepaid service revenue for the nine months to September 2019. “This was impacted by out-of-bundle (OOB) data tariff reductions and ICASA's End User Subscriber Service Charter regulations (which came into effect on 1 March 2019) against the backdrop of a challenging economic environment.”

MTN stopped a 1GB prepaid promotion offer, which contributed to a fall of 400,000 in its number of prepaid subscribers to around 23 million. It added almost 81,000 post-paid (contract) clients, and saw service revenue growth of 5.8% in this business.

MTN said that it is implementing stricter vetting rules aimed at reducing credit risk of contract clients and “enhancing subscriber quality”. Data traffic from these clients rose by almost a third in the past nine months.

Its local enterprise business saw a 7% decline in service revenue for the nine months to September.

Across the group, its earnings before interest, tax, depreciation and amortisation (EBITDA) margin increased to 41.1% for the past quarter, from 35.1%. 

Compiled by Helena Wasserman