MTN Announces Increase in Subscriber Base

South Africa-based telcoms group MTN has announced that its consolidated subscriber base increased to 134.47 million as at 30 September 2010, up 4% from the 129.21 million reported at the end of June. A company statement credited the increase to ‘high quality networks, attractive value propositions and efficient distribution’.

The South and East African region, which contributes 22% of the group’s customers, increased its subscriber base by 4.9% to 30.08 million for the quarter - mainly driven by growth in its domestic market. In South Africa, the customer base rose 3.9% to 17.77 million, helped by the addition of 616,000 pre-paid users and its MTN Zone offer, which allows MTN subscribers access to a discounted call rate if they are in an area experiencing a low volume of MTN traffic. ARPU in South Africa remained stable at ZAR152 (USD21.6).

The West and Central African region, which contributes 46% of the group’s subscribers increased its customer base by 3.4% in the three month period to 61.38 million. Nigeria – MTN’s largest single market and that which contributes 60% of the region’s subscriber base - grew its base 5.1% to 36.84 million. MTN credits the increase to ‘superior network quality and a successful distribution framework’. Elsewhere in the region, Ghana’s customer base declined from 8.72 million to 8.46 million due to the introduction of mandatory SIM registration on 1 July 2010.

The Middle East and North African region, which accounts for the remaining 32% of MTN’s consolidated subscriber base, increased its numbers by 4.1% to 43.01 million. MTN says that the growth within the region was mainly due to its Iranian operation, which contributes 66% of the region’s subscribers. MTN Irancell increased its users by 5.6% to 28.49 million. Elsewhere in the region, Syria benefited from improved brand awareness, increasing its subscriber base to 4.72 million, a rise of 6.8%.

MTN Revenues Up 9.2% As Profits Fall

South African mobile group MTN has posted net profit of ZAR14.65 billion (USD1.97 billion) for the full year ended 31 December 2009, down from ZAR15.32 billion a year earlier. CEO Phuthuma Nhleko said: ‘Movements in exchange rates in the year, mainly in the South African rand and Nigerian naira, had a substantially negative impact on the group's financial results.’

Meanwhile group revenues jumped 9.2% year-on-year as sales earned the company over ZAR111.95 billion in the twelve-month period, compared to ZAR102.53 billion in 2008.

Earnings before interest, tax, depreciation and amortisation (EBITDA) climbed form ZAR43.16 billion in the year ended 31 December 2008 to ZAR46.06 billion a year later. The company ended the year with 116 million mobile customers across its footprint, up from 90.65 million at the end of 2008.

The company expects growth to continue into 2010, forecasting 20 million net new additions by year-end, with its Nigerian and Iranian operations driving growth over the twelve month period, with net additions of six million and five million subscribers respectively.

MTN Attributes Fall In SA Growth To Sim Registration

­South Africa's MTN Group has announced that it had a shade under 108.5 million subscribers at the end of September. This is a 5% increase for the quarter from 103.2 million subscribers recorded at the end of  June 2009 and a 19.6% increase for the year to date.

The South and East Africa (SEA) region increased its subscriber base by a very modest 0.5% for the quarter. This was primarily due to the disappointing negative movement of the South Africa subscriber base which contributes 64% to the region. South Africa's subscriber base declined from 17.23 million at the end of June 2009 to 16.42 million at the end of September. The main reason for the movement is the significantly lower number of gross connections following the implementation of RICA in August, which requires PrePay SIM cards to be registered with the operators. Given the current market uncertainty following the RICA implementation there are challenges with South Africa achieving its revised target of zero net additions for the full year.

Uganda increased its subscriber base by 11% in the quarter following the continued success of MTN Zone which now constitutes 95% of the total prepaid base.

The West and Central Africa (WECA) region increased its subscriber base by 5% for the quarter driven mainly by Nigeria which accounts for 58% of the region's subscribers. Nigeria recorded a 5% increase in its subscriber base to 28.76 million mainly due to continued network rollout, innovative product offerings and the effectiveness of the distribution channels implemented earlier in 2009. Ghana maintained its market share and increased its subscriber base by 2,6% despite aggressive competitor activity. Both Cameroon and Cote d'Ivoire increased their subscriber bases by 4% and 5% to 4.19 million and 4.21 million, respectively.

The Middle East and North Africa (MENA) region recorded a 9% increase in subscribers for the quarter. This was largely due to continued growth from the Iran operation, which contributes 62% to the region's subscribers and increased its base by 8% to 20.7 million. Iran's growth was attributable mainly to expanded network coverage and continued promotional activity. Syria increased its subscriber base by 13% to 4 million, well above expectations. Afghanistan, although a relatively smaller operation, has been steadily contributing positively to the region's growth and has gained No. 1 position in the market from No 3 at the beginning of 2009.

MTN has revised its subscriber net addition guidance for the year for South Africa to zero and for Syria to 550,000 while other individually disclosed country guidance remains the same. MTN expects to achieve the total group subscriber net addition guidance for 2009 of 22.6 million.

Etisalat To Bid for Meditel as it Eyes Africa & Middle East

Emirates Telecommunications Corp said it would bid for a stake in Morocco's Meditel as it seeks acquisitions in the Middle East and Africa, adding asset prices were likely to fall further.
Emirates Telecom, known as Etisalat, would also continue to pursue the telecom license in Iran it was stripped of last week, its Chairman Mohammed Hassan Omran told Reuters on the sidelines of the World Economic Forum at the Dead Sea in Jordan.
"We are looking for opportunities in the Middle East and Africa, especially at this time there are some good assets," Omran told Reuters Financial Television. "Assets are becoming cheap ... we see them becoming more cheap in coming months."
Portugal Telecom has appointed Morgan Stanley to sell its 32 percent stake in Meditel, Morocco's second-largest telecoms company, people familiar with the matter said earlier this month.
"We are expecting Morocco ... We are participating in the bid for Morocco... Meditel and we are working hard for Syria and Lebanon," Omran said, without giving further details.
The telecom operator is facing stiffer competition in its home market the United Arab Emirates, the second-largest Arab economy, where some analysts expect job cuts and expected population declines could way on future earnings of Etisalat and rival du DU.DU.
"We are working hard to maintain that and even get it better," Omran said when asked if Etisalat was likely to be able to match a 4-percent rise in profit it achieved in the first quarter.
He said the UAE market is becoming more difficult because expatriates are leaving, but Etisalat expected growth in Saudi Arabia, where its affiliate Etihad Etisalat 7020.SE was doing "better than expected."
Etisalat Egypt, the third mobile phone operator in the North African country, was also performing "better than competitors," Omran said. Saudi Arabia is the most-populous Gulf Arab country while Egypt has the largest population in the Arab world.
Etisalat said in January it planned to invest up to $5 billion over five years in its Iranian operation after winning the country's third mobile telephone license.
But Iran said on May 11 it had granted a consortium led by Kuwait's Mobile Telecommunications Co the license instead because a group including Etisalat and Iran's Tamin Telecom "had not fulfilled its obligations.
"In Iran, we made the best bid. Our partner could not continue and that ended up disqualifying the consortium," Omran said. "We are evaluating the possibilities. It is the big market and it has a lot of potential. But it is complex. The game is not over for us in Iran."
-Reuters

Etisalat Loses Iran License to Zain

Iran has given a consortium led by Kuwait's Mobile Telecommunications Company (Zain) the country's third mobile licence, stripping it from Emirates Telecommunications Corp (Etisalat).

A spokesman for Iran's Communications Regulatory Authority told the official IRNA news agency on Monday that Etisalat and Iran's Tamin Telecom, which won the tender in January, had 'not fulfilled its obligations.'

'With the elimination of Etisalat's consortium from the third operator project, the Zain Iran consortium, which was runner-up in the bidding, takes over the project,' Mohammad Reza Farnaqi said.

Iranian telecommunications minister Mohammad Soleimani was quoted in an interview with Iranian IT daily Fanavaran Etisalat was removed after failing to submit 'the necessary collateral and payments of the licence fee on the appropriate time.'

In Kuwait, a Zain spokesman said the company was arranging talks with Iran about the licence. 'We will meet with the Iranians sometime in May to discuss the new terms and conditions,' Ibrahim Adel told Reuters.

Etisalat confirmed that it was no longer the winner of the licence, but said it would 'carefully review its options' and go back to the regulator with a formal response.

Zain, majority-owned by the country's sovereign wealth fund, has aggressively spent billions of dollars to expand abroad as competition heats up at home, where an affiliate of Saudi Telecom has started operations.

Farnaqi, the Iranian official, said two Iranian pension funds were also part of the Zain-led consortium.

Etisalat, one of the largest Arab telecommunications company by market value, had said it expected to invest up to $5 billion over five years in its Iran operations.

It said in January the group would have exclusive rights to provide third-generation (3G) services and it hoped to get at least 1 million subscribers in the first year of operation.

Iran has a mobile penetration rate of less than 60 percent, in a market where about half of its 70 million population is under 25 years of age.

The current telecom operators in Iran are the state-owned Iran Telecommunication Company (TCI) and Irancell, which is 49 per cent owned by MTN Group, sub-Saharan Africa's biggest mobile phone company.

Iran's nuclear row with the West has deterred many foreign companies from doing business in the country. US sanctions bar US companies from doing business with Iran, and United Nations sanctions have made other firms wary of investing there.

However, analysts say the size of the market and its energy riches still make it an attractive investment prospect.-Reuters

China Mobile Denies MTN Takeover Claim

­Reports in the media that China Mobile Communications Corp. (CMCC) is seeking a partner for a takeover of South Africa's MTN Group have been denied by the firm. The reports, which first emerged in the South China Morning Post, citing unnamed sources said that the company was seeking to be a junior partner in a takeover attempt.

The Chinese carrier is “not aware” of the investment plans reported by the newspaper, Rainie Lei, a spokeswoman for Hong Kong-listed China Mobile Ltd. told Bloomberg News.

The original news report had said that China Mobile had approached or plans to approach companies with a strong African and Middle Eastern presence such as France Telecom; Zain, Orascom Telecom and Etisalat.

It is possible that CMCC is looking at a purchase without using its Hong Kong listed subsidiary, and while this would be highly unusual, it would resolve a key reason given for MTN wishing to sell some of its overseas operations. MTN has subsidiaries in Iran, Syria and Sudan - all countries which the US has trade sanctions against and MTN's involvement in those countries could be causing difficulties in securing US investors. While the listed arm, China Mobile Hong Kong would face the same problems with the US government, the state-controlled parent group, China Mobile Communications would usually have no such qualms.

See Story

China Mobile Seeks Partner for MTN Stake

China Mobile is reportedly seeking a junior partner to buy the assets of South African mobile operator MTN in Iran, Syria and Sudan, valued at about USD 2 billion, the South China Morning Post reported, citing unnamed informed sources.

The company has approached or plans to approach companies with a strong African and Middle Eastern presence such as France Telecom, Kuwait's Zain, Orascom of Egypt and Etisalat. The paper's sources said that China Mobile's attempt to buy a minority stake in the MTN units on its own was rebuffed.

China Mobile is looking overseas as its domestic urban markets become saturated and amid forecasts much of the future growth in the sector is destined to come from poorer rural areas.