MTN has reported a 27,3% rise in headline earnings per share and a 12% increase in revenue for the year.
The company announced its financial results for the year ended 31 December 2013, reporting that group earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 13% to R58 820-million.
JSE listed MTN South Africa is part of MTN Group Limited, a multi-national company with a presence in 21 countries across Africa and the Middle East. It is a leading mobile operator in emerging markets.
The MTN Group posted a solid performance, mostly driven by its international operations, while MTN South Africa’s results were disappointing. MTN South Africa comprises approximately 37% of the South African market share and its core business is the provision of voice, data and telemetry offerings and solutions.
During the past year, aggressive price competition and regulatory pressure placed a lot of strain on its voice revenues, which declined by 8,3%. As a result, the local operation experienced a 6,1% decline in revenue.
However, during the second half of 2013, MTN South Africa started to show some progress and the majority of the prepaid subscriber loss of 1,1% was recovered.
There was a 5,7% revenue growth in MTN Nigeria and the subscriber base grew by 19,7% in 2013.
“The improved segmented offerings, better quality network and seasonal promotions supported the growth in the challenging market,” says Frost & Sullivan ICT research analyst, Joanita Roos.
Pleasing growth results were also experienced in other African operations including Uganda, Ghana, Cameroon, Sudan and Zambia.
MTN Mobile Money and financial services are particularly relevant to the growing African markets. The number of registered MTN Mobile Money subscribers grew by 57,3% to 14,8-million. Innovative financial products including short-term insurance offerings, ATM withdrawals and remote payments for airline tickets, were introduced in 2013.
Roos expects this to be an important driver for growth in its international operations in the long-term, as mobile money solutions become increasingly popular in other parts of Africa.
Overall, the group subscribers increased by 9,8% to 207,8-million.
“The positive results are primarily due to MTN’s strategy to remain competitive and relevant,” adds Roos.
MTN drives the improvement of network quality and capacity which ultimately ensures higher voice and data traffic. MTN continuously invests in building its own backbone and transmission infrastructure which enables them to improve scalability and deliver quality service.
The group’s capital expenditure over the past five years was over R100-billion in the countries where it operates and the capital expenditure for 2013 was over R30-billion.
MTN’s solid investments in infrastructure ensure network quality and capacity which are key factors that will ensure continued growth and sustained market position. The group will continue to focus on delivering product offerings beyond voice. The group is also specifically focused on growing its internet business in Africa and expanding its 3G coverage to drive data revenue growth in emerging markets.
“MTN South Africa is likely to face continued competition in the local market from the smaller operators. The asymmetric mobile termination rates are also expected to put increasing pressure on MTN’s margins in 2014,” Roos adds.
