MTN GROUP’S first-half profit increased and data revenue soared while Africa’s largest cellular operator said it was in advanced talks to sell its tower business in Nigeria.
Headline earnings a share rose 9 percent to R7.29 in the six months to June, MTN said yesterday in a statement. Sales grew 11 percent to R72.8 billion, with data revenue up 39 percent.
Data sales were boosted by an expanded third-generation network and an increase in smartphone use across the 22 countries in which it operated, chief executive Sifiso Dabengwa said. Subscribers to MTN Mobile Money – used for payment in areas where banks are limited – grew by 24 percent to 18.4 million people.
The shares gained as much as 4.8 percent, the biggest intraday gain in almost three years, and closed 2.81 percent higher at R223.61 yesterday.
“Data penetration and internet penetration is still very low,” Dabengwa told reporters. “We think that once we have data-enabled devices coming down below $30 (R322) to $20 levels we definitely will see a much greater uptake from data and internet services.”
MTN said it planned to sell 8 640 existing Nigerian cellphone masts and 543 that were still being built to an entity that would be managed by a large mobile telecoms infrastructure provider. It intended to keep a non-controlling interest of 51 percent in the new entity and would enter into a lease agreement for the use of the tower infrastructure.
MTN is seeking transformational deals and has overhauled management in its fast-growing markets as it seeks to increase smartphone penetration and lift data revenue outside South Africa, where sales are under pressure from competitors cutting prices and regulators.
The company has partnered with Luxembourg-based Millicom International Cellular and Rocket Internet to each own a third of African Internet Holdings, which has helped develop Nigerian online store Jumia.
“People think the lower end of the market is not data intensive, but as the costs come down, it is,” Bruce Main at Ivy Asset Management said.
“There’s room for growth. MTN is also focusing on margin improvements and the chief is aware of keeping costs down. That is encouraging.”
Subscribers rose 3.5 percent to 215 million with 1.7 million net additions in Nigeria, its biggest market with 58.4 million customers. In South Africa, sales fell 7 percent to R19.2bn. An interim dividend of R4.45 was declared, up 20 percent.
MTN said it was working with relevant authorities in managing US and EU sanctions against Iran, Syria and Sudan. – Bloomberg