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Nigeria drives MTN’s group revenue growth

Nigeria drives MTN’s group revenue growth.

Nigeria is driving growth for MTN while the company’s South African operations are holding back the telecoms giant.

This is evident from MTN’s half year results as of 30 June 2014, which reveal that its Nigerian revenues grew 21.5% to reach R27,099 million, while the telecom firm’s South African revenues shrank 3.4% during the period to hit R19,157 million.

This means that Nigeria makes up approximately 37% of the MTN Group’s total revenues.

Meanwhile, group revenue increased by 10.7% to R72,759 million. Group earnings before interest, taxation, depreciation and amortisation (EBITDA) also rose 19.6% to R33,663 million.

Group subscribers are further up 3,5% to 215 million, data revenue increased by 38,9% to R12,708 million, the number of data users are 7,3% higher at 88,5 million and the group’s mobile money subscribers increased 24,3% to 18,4 million.

Other figures include that the group's operations rolled out 1,716 2G and 2,232 3G sites across its 22 operations in Africa and the Middle East.

“Reported revenue for the six months increased by 10,7%, supported by the continued weakness of the South African rand against our operating currencies, in particular the relatively stronger Nigerian naira, Central African franc and Ugandan shilling,” says MTN.

“Although MTN Nigeria delivered a solid performance, the operation faced regulatory pressures and localised network performance challenges.

“Notwithstanding this, the operation remains on track to deliver solid results for the full year.

“MTN South Africa took aggressive steps to regain its competitive market position. While financial performance will continue to be subdued in the short term, the South African operation expects to resume positive subscriber and revenue growth over the next six months,” notes MTN.

Research firm Frost & Sullivan says in a statement that MTN South Africa comprises approximately 37% of the South African mobile market share behind leader Vodacom.

Frost & Sullivan further says MTN South Africa has been under pressure because of strong competition from rivals. Cell C, for example, has posted that it recorded growth of over one million subscribers in the last three months.

But key changes at the top of MTN could be a sign that the company is looking to claw back market share in South Africa.

“The group recently strengthened its leadership structures by announcing the appointment of Zunaid Bulbulia as group chief operating executive, with the incumbent, Ahmad Farroukh replacing Bulbulia as CEO of MTN South Africa at the end of July,” says Frost & Sullivan information and communication technologies industry analyst, Joanita Roos.

“This announcement is in line with MTN’s strategy to regularly rotate key talent within the company,” notes Roos. “MTN continues to respond to challenges in the markets in which it operates and the restructuring of the leadership is a positive step towards enhancing its competitive position and, ultimately, to ensure sustainability in the long term.”

Ahmad Farroukh is the former MTN Nigeria and Ghana chief executive officer. Farroukh is a Canadian who has a Masters in Business Administration and Accounting. He is also a certified public accountant in the US.

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