MTN's 'controversy-free' time in Nigeria may be short-lived

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MTN Nigeria

'controversy-free time' may be short-lived.

Sunday, Feb 16th

MTN upbeat about market prospects

MTN upbeat about market prospects

Solid (6%) growth in voice revenue across MTN's portfolio, specifically in major markets like Ghana and Nigeria, is a positive spin-off from the operator's "deliberate strategy across the Group to focus on the voice business", notwithstanding the ongoing need to grow data digital mobile money says Rob Shuter, Group president and CEO.

It gives the company confidence going forward, particularly since voice represents 60% of the company's business Shuter told ITWeb Africa soon after presenting MTN's financial results for the six months ended 30 June 2018.

"It's very encouraging... often the way people think of our industry is that voice is on the decline, and that we need to aggressively grow data digital mobile money to make up the difference. And while I agree we need to growth data digital mobile money, we actually have six percent voice revenue growth across the portfolio .... there is a very deliberate strategy to use initiatives like private pricing tools to stimulate usage."

According to the company's results, its subscriber base now stands at 223,4 million with 71,2 million active data users. Data revenue increased by 26,7% and active MTN Mobile Money customers increased to 24,1 million.

Shuter emphasised the importance of data usage and revenue to the overall performance. "On average across our markets now, already the average consumption is over 2G per user per month... that is a little bit distorted by Iran and Cyprus, but if you cast an eye across all of the other markets, you'll see it is between a Gig and 1.4 Gigs. So those that are using data are scaling quite quickly, so I guess the big challenge now is to bring the next section of people into the data world."

In the presentation of results, Shuter was quoted as saying: "As part of our ongoing portfolio review, we agreed to the sale of MTN Cyprus. In the period, we further strengthened our governance of risk, continued to boost our specialist skills base, recorded improvements in employee engagement and extended mobile internet access to more people. Despite continued challenges in repatriating funds from MTN Irancell, the board remains committed to plans to declare a total dividend of 500 cents per share for 2018 and is targeting growth of 10% to 20% over the medium term."

Shuter said there are implications to the US' decision to return to the sanction regime in Iran, including that it has created weakness in the Iranian rial which, when opco is translated back, the company will experience some translation losses, as well as the fact that the Iran opco will have to manage its own reserve and funding going forward.

"It is a great pity but it is manageable," he said.

Cyprus and Iran aside, another continuous talking point is the Nigeria market and specifically the company's progress on the IPO.

"We are trying to do the IPO as fast as we can... it is really the Nigerian opco itself that is listing, so the process is really being managed by the Nigerian team and advisors. I think it's fair to say it's a complex process (restructure prelisting, budgets etc.), but we still believe it's possible to get it done in 2018. Clearly there some things on the critical path that need to get solved," Shuter added.

Asked about the company's positioning ahead of the Nigeria elections in February 2019, Shuter stated that there are no significant concerns at this stage – but generally, the market tends to pick up prior to the event, particularly with campaigning and increased activity on the networks.

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