MTN has published its quarterly trading update for the three months ended September 2022, revealing that service revenue grew by just 2.2% year-on-year in South Africa.
For the third quarter of 2022 (Q3 2022), MTN South Africa reported service revenue of R10.15 billion, slightly better than the R9.93 billion in the third quarter of 2021 (Q3 2021).
MTN attributed the relatively muted service revenue growth to trading environment pressures and load-shedding. “This result was delivered against high inflation, rising interest rates, unemployment and unprecedented load-shedding, which negatively impacted the overall network availability and some business functions,” the company said.
In addition, the operator made concessions amounting to R82 million on the Cell C national roaming agreement geared to enabling the conclusion of their recapitalization.
MTN South Africa’s average revenue per user (ARPU) declined from R98.09 in Q3 2021 to R91.84 in Q3 2022, a drop of 6.37%. This was influenced by prepaid service revenue declining by 1.2% year-on-year, which MTN said was due to economic pressure and job losses.
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“This was further exacerbated by persistent load-shedding, which had a significant impact on voice,” the operator added.
The ARPU drop came while MTN South Africa’s subscriber base grew by over 500,000 subscribers quarter-over-quarter, climbing from roughly 35.35 million to 35.88 million. At the same time a year ago, the network had 3.69 million fewer subscribers.
Prepaid subscribers now stand at 27.9 million, up from around 26 million at the same time last year, while the postpaid subscriber base grew from 7.2 million to 8 million customers.
MTN said the macroeconomic pressures of Q3 were likely to continue impacting performance in South Africa in the fourth quarter of 2022.
The MTN Group’s overall performance in its biggest market — Nigeria — was much more positive, helping to increase overall group service revenue by 15.56%. Service revenue increased from R42.95 billion in Q3 2021 to R49.64 billion.
Data traffic continues to grow
MTN said that data continued to lead its South African business, contributing 45.4% of total service revenue. Mobile data revenue grew by 11.2% year-on-year, due to increased data traffic on its network and active data users climbing to 18.8 million.
MTN said the higher usage was stimulated by an effective data tariff reduction of 23.4% year-on-year. The operator said the average active prepaid data subscriber now consumed roughly 2.7GB of data per month, an increase of 9% compared to the end of 2021.
The increase in data usage among subscribers has been even more profound, at nearly 13.5GB per month, an increase of 20.9%.
MTN’s enterprise business also saw an increase of 17.8% in service revenue year-on-year, which the operator said was mainly supported by robust growth in the core mobile business from strong data product propositions.
Despite the concessions to Cell C, wholesale revenue increased by 0.7% thanks to MTN’s roaming agreements with Cell C and Telkom.
MTN said based on Cell C concluding its recapitalization in September 2022, it was now “appropriate to recognize revenue for national roaming services on an accrual basis of accounting”.
SOURCE: My broadband
