Bloomberg and Asha Speckman
MTN Group, Africa’s largest cellular operator, had cut its full-year target for new subscribers as regulations limited growth and customer numbers dropped in Iran during the third quarter to September, the listed telecommunications group said yesterday.
The company reduced its goal for net additional subscribers in 2013 by 9 percent to 19.1 million, Nik Kershaw, the head of investor relations, said yesterday. MTN Irancell’s customer base contracted by 1.7 percent to 41.3 million because of a weakening economy in the Middle East country and the withdrawal of a SIM-card promotion, Kershaw said.
MTN increased its subscriber numbers by 2.2 million to 203.8 million in the three months to September, less than the company had forecast. The growth slowed from increases of 6.3 million users on average over the past three quarters.
MTN’s largest market, Nigeria, added 358 000 customers after expanding the user base by more than 9 million in total in the previous three quarters.
“The third quarter has been characterised by lower-than-anticipated subscriber growth following ongoing price competition and subscriber registration requirements across a number of markets,” MTN chief executive Sifiso Dabengwa said. “Data and mobile money remain a key focus for the group with traditional voice revenue under pressure.”
The company said in August that it was reviewing its cost base in South Africa and might eliminate jobs.
Kershaw said MTN had made progress on repatriating about $450 million (R4.4 billion) from its Iranian unit, which had been held up due to sanctions led by the US.
MTN said mandatory SIM registrations and lower connections in a Nigerian state could affect net additions for the balance of the year.
Spiwe Chireka, the programme manager for telecoms in Africa at IDC Austral Africa, said: “There has been an increase in regulatory intervention over the past three to four years. A dominant market like Nigeria has slowed quite a bit for MTN.”
Chireka said that in South Africa, where cellular operators were waiting for the outcome of regulatory deliberations on call termination regulations, consumers could face higher call costs as the operators needed to recoup the impact of lower call termination tariffs. “The regulator needs to look at the entire cost of making a call, not just the termination rates,” she said.
Call termination tariffs are the fees operators charge one another to accept calls on each other’s networks.
MTN shares declined 1.41 percent to R189.30.