MTN South Africa is losing customers

MTN Group’s financial update for the quarter ending 30 September 2018 shows that its South African operation is losing clients.

MTN South Africa ended the third quarter with 29.5 million customers, down from 30.2 million at the end of June and 30.9 million at the end of September 2017. The losses came on the prepaid side, not from more lucrative contract clients.

At the end of the third quarter, MTN South Africa had 23.7 million prepaid users, down 3.4% quarter on quarter, while post-paid subscribers rose by 2.1%. It had 2.8 million telemetry subscribers.

The South African operation turned in year-on-year service revenue growth of 3%, “edging closer” to a medium-term target closer to 5%.

Data and digital revenue increased by 12.5% and 9.9% respectively, while outgoing voice revenue declined by 8.4%.

“In a weak economy, consumers felt the pressure of a higher VAT rate, becoming increasingly price sensitive,” MTN said in notes alongside the quarterly update. “Prepaid service revenue increased 0.5% and post-paid service revenue increased by 1.9%.”

It said the South African business “took steps to transform data prices”, introducing “attracting social media bundles and “customer value management offerings”.

‘Optimised’

“As a result, customers optimised their data and voice spend and the number of active data subscribers increased by 6.7% quarter on quarter to 13.5 million,” it said. “The consumer post-paid business maintained its positive momentum, the stabilisation of the enterprise business continued and the wholesale business gained traction.”

Ebitda margin — a measure of operational profitability — fell slightly to 34.5%, from 34.8% previously. “The lower sequential Ebitda margin was largely impacted by higher device prices following the weakness in the rand exchange rate and increased device sales in the quarter.”

For the group, MTN increased its subscriber base by 2.5 million to 225.4 million. Active data subscribers were 74.2 million, up by five million from the June quarter. Group service revenue grew by 10% year on year, ahead of its medium-term target of upper-single-digit growth.  — © 2018 NewsCentral Media