MTN’s H1 Numbers Are Out And Its Domestic Struggles & Foreign Success Show That Home Is Not Always The Best

As the popular saying goes; “charity begins at home.” But in the case of one of South Africa’s biggest telecommunication companies, MTN, that may not always be true.

And that’s because, while MTN Group may have kicked things off by setting up shop in SA initially, things are not as rosy for the company as they are in a number of foreign markets the company had the foresight to venture into, much to their credit.

The telco just released interim financial results for the six months ended June 30, 2019 and while some of the data suggests that its South African business is under pressure as the result of new sector regulations and the weak economy, there is no doubt that MTN is kind of having a swell time abroad with its Nigerian and Ghanaian businesses weighing in with impressive numbers.

The subsidiaries of MTN Group in Nigeria and Ghana led the telco’s overall profit for the first half of 2019. MTN Nigeria led the market share with 12.2 percent growth while MTN Ghana contributed 18.7 percent to the overall service revenue at USD 4.48 Bn.

The financial report showed that MTN South Africa’s market posted a meagre 3.3 percent growth, impacted by a decline in consumer prepaid revenue as a result of new regulation.

Also, MTN South Africa lost 1.9 million subscribers from December 2018 due to a combination of factors including the acquisition strategy in consumer post-paid as well as the discontinuation of the 1GB acquisition promotion in prepaid. This drove the telco’s subscriber base to 29.2 million.

Looking at things generally, though, the telco did make a strong case for itself in the ongoing search for Africa’s No.1 telco as its subscribers increased by 7.7 million to 240 million within the period while group revenue increased by 10.2 percent.

Rob Shuter, President and CEO of MTN Group, commented on the report, saying; “We had a good first half, reporting solid financial results, good commercial momentum and encouraging strategic progress. We saw a growth of 12 percent in adjusted headline earnings per share, which is the first time that we have delivered growth in this measure in recent years.”

“During the period we had some landmark events. We successfully completed the listing of MTN Nigeria on the Nigerian Stock Exchange and our e-commerce joint venture Jumia listed on the New York Stock Exchange. Within three months of announcing our asset realisation program, which is targeting at least ZAR 15 Bn (USD 990 Mn) over the next few years, we delivered ZAR 2.1 Bn (USD 139 Mn) in proceeds,” he adds.

Shuter also made it known that MTN is preparing earnestly for the launch of the first phase of its Nigerian fintech business even as it awaits a banking license from the regulatory bodies.

Less than a fortnight ago, MTN got formal approval for its super-agent license in Nigeria, which clears the way for the launch of phase 1 of its Nigeria fintech business, pending the issuing of a banking license. It is a move that could see the telco rival commercial banks in Nigeria and even come up tops with its huge subscriber base in the country.

And in other news, MTN’s advanced instant messaging platform, Ayoba, is now live in three of its West African markets and has more than 300,000 active monthly users. This could be another potential disruptor of the space.

Generally, MTN’s business South Africa is not doing so great at the moment. Operating expenses rose due to Eskom load shedding, battery theft, and site vandalisation. These, together with the progressively expanding network footprint, resulted in a 3.7 percent increase in total costs year on year. 

However, the story from Nigeria and Ghana is one the company would certainly get some solace from as work continues on turning around MTN South Africa’s long-struggling enterprise and taking its businesses in foreign markets to new heights.

Featured Image Courtesy: nairametrics