MTN Nigeria records further revenue decline in Q3 of 2016

MTN Nigeria reported a smaller revenue decline in the quarter ended 30 September, as subscriber numbers continued to recover in the West African country.

After reporting a year-on-year decline in revenue in the first and second quarters of 2016 of 6.2% and 3.3% respectively, in the third quarter MTN Nigeria’s revenue decline was limited to 1.2% year-on-year.

The group says it is confident MTN Nigeria will deliver positive year-on-year revenue metrics in the fourth quarter. In Nigeria, constant currency data revenue increased by 6.7% and contributed 20.4% to total revenue.

“Despite a tough operating environment as a result of weaker macro-economic conditions, particularly in oil-dependent economies, as well as the regulatory challenges experienced, we are confident the fundamental changes implemented over the past year position the group well to participate efficiently and effectively in the data evolution and ensure sound stakeholder relationships and governance processes,” Phuthuma Nhleko, MTN Group executive chairman says in a statement.

“This is largely the result of a weaker macro-economic environment negatively impacting consumers, a decline in the effective data tariff because of competition and regulatory requirements impacting out-of-bundle billing.”

In SA, data revenue increased by 15.1% year-on-year and contributed 34.4% to total revenue.

The number of smartphones on the SA network also increased by 9.3% year-on-year, to 9.2 million. Average revenue per user increased by 10.4% quarter-on-quarter.

Nigerian data traffic increased by almost 44% year-on-year and the MTN Nigeria network saw the number of smartphones on the network increase by over 59% to 19.2 million year-on-year.

Nhleko says MTN is pleased to report it has commenced the repatriation of cash from MTN Irancell to the group and expects to conclude the process over the next six months.

MTN Irancell’s constant currency data revenue increased by over 61% quarter-on-quarter and contributed 41.5% to total revenue despite a decrease in data tariffs. The number of smartphones on the Iranian network increased by 35% to over 29 million.

MTN says it also embarked on a material transformation project during the third quarter, focusing initially on its key operations of Nigeria and SA.

“A dedicated transformation office was established to drive this transformation to maximise revenue growth, enable a distinct customer experience and ensure operational efficiencies, including concerted initiatives to drive optimal return on investment, with hard targets set for the next 12, 18 and 24 months.”

Nhleko says the operations are expected to deliver the first results on clearly defined targets in the first half of 2017.

MTN grew its group subscribers by 0.9% quarter-on-quarter to a total of 234.7 million, as Nigeria’s numbers recovered slightly despite a small drop in subscribers in SA.

MTN South Africa reported a marginal decline in subscribers of 0.5% quarter-on-quarter to 29.7 million. This was as a result of a 0.7% decline in the prepaid subscriber base to 24.5 million, largely due to churn from low revenue-generating customers. The postpaid subscriber base, however, increased by 0.7% to 5.2 million.

The rest of the SEA region – which includes Uganda, Zambia, Rwanda, Botswana (joint venture), Swaziland (joint venture) and South Sudan – saw the number of subscribers increased by 1% to 23.3 million. This was mainly driven by growth of almost 3% in Uganda, which now has 10.2 million customers.

MTN Nigeria reported a 2.5% quarter-on-quarter increase in its subscriber base to 60.5 million. The rest of the WECA region – Ghana, Cameroon, Ivory Coast, Benin, Congo Brazzaville, Liberia, Guinea Conakry and Guinea Bissau – saw overall subscriber numbers grow by 2.3% to 47.6 million. This was driven by 2.7% subscriber growth in Ghana to 18 million, and 3.7% growth in the Ivory Coast to over 8.5 million subscribers.

MTN Irancell increased its subscriber base by 1.1% quarter-on-quarter to 47.8 million “in a highly penetrated market”. However, the rest of the MENA region – made up of Syria, Sudan, Yemen, Afghanistan and Cyprus – saw subscriber numbers drop by almost 4%, to 25.8 million, owing to a 13% decline in Sudan due to the subscriber registration process.

SEA has 52.9 million subscribers; WECA remains the largest contributor with over 108 million subscribers while MENA has 73.6 million customers.