MTN Nigeria delivers ‘satisfactory’ 5.5% growth as group tops 223.4m users in 2014

MTN Nigeria delivers ‘satisfactory’ 5.5% growth as group tops 223.4m users in 2014

MTN Nigeria delivers ‘satisfactory’ 5.5% growth as group tops 223.4m users in 2014

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MTN Nigeria has recorded 59.9 million users representing an impressive 5.5 % growth as the mobile telephony group’s overall customer base peaked at 223.4 million in 2014, the South African mobile telephony giant has announced.

MTN Group says its Nigerian operations, the largest mobile phone operator in the country by subscriber number, recorded “satisfactory performance” despite severe “regulatory restrictions” by the Nigerian Communications Commission (NCC), the industry watchdog.

With its Nigerian subscriber base, MTN Nigeria recorded a 5.5% growth by ramping up 59.9 million customers in a year that saw its parent company also increasing customer base to 223.4 million, representing 7.5% growth, according to the mobile phone company’s 2014 annual report.


[su_highlight]Highlights: MTN Nigeria in 2014 [/su_highlight]

[su_row][su_column size=”1/3″]-Net subs adds of 3.1 million [/su_column]

[su_column size=”1/1″]-Revenue increased 3.7%[/su_column]

[su_column size=”1/1″]-Interconnect revenue up 14.1%[/su_column]

[su_column size=”1/1″]-EBITDA margin of 58.6% [/su_column]

[su_column size=”1/1″]-1 367 new 2G sites and 2 365 co‐located 3G sites added[/su_column][/su_row]

MTN Nigeria delivers ‘satisfactory’ 5.5% growth as group tops 223.4m users in 2014
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According to the annual report, MTN Nigeria’s 2014 performance was driven by improved segmented offerings to high‐value customers and seasonal promotions focused on growing subscribers and increasing usage on its network.

[blockquote right=”pull-right”]Coming closer home and on the flip side, the MTN Group says that “MTN Nigeria’s performance was below expectations, impacted largely by regulatory determinations and economic pressures as well as operational challenges.” [/blockquote]

MTN Nigeria delivers ‘satisfactory’ 5.5% growth as group tops 223.4m users in 2014
Dr Eugene Juwah, EVC of NCC

“This was a satisfactory performance given regulatory restrictions relating to the regulator’s 2013 ruling that declared MTN Nigeria a ‘dominant operator’”, in reference to NCC’s clampdown on the company over alleged dominance of the voice segment of the Nigerian telecoms market.

Nigeria’s chequered operating environment in 2014 became a key focus of the South African telecoms group, which says its local operations, MTN Nigeria is working hard in the face of stiffer measures by the industry watchdog.

“To ensure compliance with regulations, MTN Nigeria rigorously monitors the KPIs (key performance indicators) set by the Nigerian Communications Commission”, MTN Group says.

Across board, the company says that 2014 results “reflect a challenging year, impacted by aggressive price competition, increased regulatory requirements and pressure on consumer expenditure.”

According to the telecoms company, “the sharp decline in the oil price in the second half of the year had a marked impact on the economies and exchange rates of a number of African and Middle Eastern countries. Notwithstanding these conditions, most of MTN’s large and small operating companies (opcos) showed promising improvements in operational performance.”

Coming closer home and on the flip side, the MTN Group says that “MTN Nigeria’s performance was below expectations, impacted largely by regulatory determinations and economic pressures as well as operational challenges.”

Meanwhile, the Nigerian operation reported 1.5 million net additions in the last quarter following regulatory approval of select promotional offerings from October 2014.

According to MTN, total revenue of MTN Nigeria increased by 12,1% or 3,7% in constant‐currency terms, though regarded as “below expectations” while its revenue market share remained stable.

“Growth in revenue was impacted by a decline in on‐ net traffic due to the dominance ruling and lower‐than‐anticipated subscriber numbers. Data revenue continued to grow strongly, increasing by 28,3% to contribute 18,6% of total revenue at year-end”, according to the report.

The Nigerian growth “was mainly a result of the 18.1% increase in data users, increased smartphone penetration and the introduction of products such as the 4.5G smartphone data plan.”

For MTN Nigeria, “the number of smartphones on the network increased by 51.2% to 9.3 million at the end of December.”

According to the company, “we worked hard to improve data usage through offering innovative products and bundled packages including MTN SME Plus, MTN Biz Plus, MTN Music+, MTN Callertunez, while harnessing e‐commerce and financial service opportunities with our online shop Jumia. MTN Nigeria’s Mobile Money offering, Diamond Yellow, gained encouraging momentum and we are now exploring ways to expand the offering.”

In the same period, the EBITDA margin increased by 16% to 58.6% “on a like‐for‐like basis (excluding the reversal of the management fee in 2013). This was supported by cost‐optimisation initiatives, including a revised commission structure and managed services implemented during the year.”

According to MTN, in December, costs were affected by the sale of MTN Nigeria’s towers to the tower company and the subsequent lease expenses incurred. This follows the conclusion of arrangements in quarter four to transfer tower assets to a new entity that will be managed by the telecoms infrastructure provider IHS. Under the plan, a total of 9 132 towers will be transferred by June 2015 of which 4 154 were transferred in 2014.

“During the year, MTN Nigeria’s capital expenditure was aimed at meeting the growing demand for data. We rolled out 1 367 new 2G sites and 2 365 co‐located 3G sites, spending R8 375 million. Although capex declined by 41.4% in the year, sufficient quality and headroom has been achieved on the network and the operation has the flexibility to rapidly roll out as required.”

 

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