Cell giant eyes new streams of revenue

050314 MTN group subscribers grew 9.8 percent to 207.8 m during the 12 months to December. Revenue increased 12 pct to R136.4 Bn. Data revenue gained 41 pct to R20.67 m says the the Company Group President and CE Sifiso Dabengwa at the head quaters in Fairlands West of Johannesburg .photo by Simphiwe Mbokazi 453

050314 MTN group subscribers grew 9.8 percent to 207.8 m during the 12 months to December. Revenue increased 12 pct to R136.4 Bn. Data revenue gained 41 pct to R20.67 m says the the Company Group President and CE Sifiso Dabengwa at the head quaters in Fairlands West of Johannesburg .photo by Simphiwe Mbokazi 453

Published Mar 6, 2014

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Johannesburg - Africa’s largest cellular network provider, MTN, is turning to e-commerce and financial services to boost the slowing trajectory of sales from traditional sources of revenue.

This was expected to deliver a meaningful contribution to revenue over the next few years, chief executive Sifiso Dabengwa said yesterday.

Growth through aggressive acquisition, which characterised its earlier years, is no longer the hallmark of MTN, which celebrates its 20th anniversary this year. Suitable targets are scarce.

“E-commerce penetration across the continent is still going to be very low. It will be a significant growth area,” Dabengwa said.

E-commerce still contributes less than 1 percent of retail sales in Africa.

The group will roll out internet services through its partnership with Rocket Internet, a global internet incubator that has a presence across the 22 markets in the Middle East and Africa where MTN dominates.

MTN has also invested in the international Amadeus Fund to gain access to online and mobile-based applications.

The company intends to broaden its roll-out of mobile money, which allows users to make payments using a cellphone and to transfer money between virtual accounts of cellphone users and financial services providers.

Yesterday MTN reported a 12 percent increase in revenue to R136.5 billion for the year to December as group subscribers increased by 9.8 percent to 207.8 million despite pricing pressure in most of its markets.

Data services revenue gained 41.4 percent to R20.6bn.

The results were boosted by a weaker rand and lower net finance costs.

The organic operational performance was muted as a result of continued tariff pressure, high levels of competition and cuts in mobile termination rates in most of MTN’s markets, Aslam Dalvi, an investment analyst at Kagiso Asset Management, noted.

Operational expenditure increased 11 percent to R77.6bn. Headline earnings a share grew 27.3 percent to R13.86. MTN hiked its dividend 25.6 percent to R10.35 a share.

South Africa reported a 6.1 percent drop in revenue to R39.7bn. Smartphones on MTN SA’s network increased by 32.6 percent to 7.3 million and data users grew by 6.4 percent to 14.3 million.

Nigeria, MTN’s largest unit, added 9.3 million customers to 56.8 million and grew revenue by 5.3 percent.

MTN shares were barely changed to close at R199.50. - Business Report

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