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MTN investors not
impressed
ADSL
South Africa (Broadband South Africa), 10 May
2007
MTN investors
are not impressed with MTN’s performance the past three
months.
‘AN 11% growth
in subscriber numbers by cellular operator MTN has done nothing
to impress investors…’ ‘The cellular giant added 4,25 million
customers in the quarter to March to reach a total of
44,3-million, up from 40-million at the end of December’ (MTN
subscribers soar, share unmoved, Stones, Business Day, 5 May
2007).
In other words, the addition of
4,25 million subscribers to MTN’s subscriber base were not
enough to lift the spirits of MTN shareholders.
In which country did MTN
experience the biggest customer growth?
Nigeria contributed almost 26% of
the 4,25 million figure.
‘Its most active operation was in
Nigeria where 1,1-million customers joined, a growth of 9% to
reach 13,3-million users’ (MTN subscribers soar, share unmoved,
Stones, Business Day, 5 May 2007).
In other words, it’s relatively
safe to assume that at least 1 000 000 Nigerians joined the MTN
family over the reported period.
What about MTN’s
performance at home (South Africa)?
Not very good.
‘SA was far more sluggish with
only 547000 new users. The company described that as “a healthy
improvement” of 4% to hit 13- million customers. MTN has never
managed to beat its rival, Vodacom, on their home turf.
Vodacom’s latest figures are for the three months to December,
when it signed up 1,58-million customers to surpass
21,7-million’ (MTN subscribers soar, share unmoved, Stones,
Business Day, 5 May 2007).
In other words, MTN didn’t
perform too well at home especially when compared to Vodacom’s
performance.
What can be worse than
that?
The 10% drop in average revenue
per user (arpu).
‘More worrying for analysts is a
punishing 10% drop in the average revenue per user (arpu) in SA
to R148 a month. That measurement of how much each customer
spends is a more useful indication of success than subscriber
numbers, as operators can have millions of customers who rarely
generate profits. MTN said the decline in arpu was “in line
with seasonal trends”’ (MTN subscribers soar, share unmoved,
Stones, Business Day, 5 May 2007).
In other words, what MTN
describes as “in line with seasonal trends” might actually be
something much more disturbing than a mere lack of impressive
subscriber
growth.
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