Aug 08, 2012
MTN grows profit, subscriber numbers as competition heats upBack
Bloemfontein|Cape Town|DURBAN|Engineering|Johannesburg|Africa|MTN South Africa|Africa|South Africa|Mobile Operator|Services|Telecommunications|Infrastructure|Karl Pienaar|Sifiso Dabengwa|Operations|3G
© Reuse this
The telecommunications group, which now held 23.5-million customers, reported on Wednesday that it increased its market share to 35.5% during the period, up from 34.1% in December.
Group CEO Sifiso Dabengwa attributed the growth to strong promotional campaigns, MTN Mahala and MTN Zone offerings, as well as data services within its prepaid segment.
The South African operations recorded a 9.5% revenue increase to R10-billion during the six months to June, owing to a 49% jump in data revenue and prepaid revenue growth of 15%.
Data revenue contributed 15.9% of the total revenue compared to 11.6% in the prior comparative period, the group stated at its interim results presentation, in Roodepoort.
Discussing the “price wars” between competitors in the local market, MTN South Africa MD Karl Pienaar told Engineering News Online that competition between the operators has always been “very” aggressive. But, he noted, the drop in pricing seemed to be more aggressive than seen in recent years.
Pienaar said the lower prices were good news for both consumers and operators, with consumers gaining a better deal, while operators attracted higher revenue through increased use.
However, he believed that the data price had fallen too low and that it could hinder future capital expenditure (capex) and investment in infrastructure, or even competition, as the smaller players would have difficulty operating sustainably if the data price fell below cost.
Pienaar also pointed out that the price decreases were not only a result of competitive measures or pressures, but, in most cases, fell owing to increased efficiency and ever-changing infrastructure.
MTN reported that it has, to date, spent R1.9-billion of its authorised R5-billion capex for the year on modernising its network and increasing 3G capacity.
During the period, MTN rolled out 146 2G sites and 446 3G co-located sites. The group currently had 6 772 2G and 3 600 3G co-located sites across South Africa.
Further, MTN has trenched 95% of the national long distance route from Johannesburg to Durban, 91% of the Johannesburg to Bloemfontein route and 70% of the Bloemfontein to Cape Town route. Over 50% of the fibre network has been installed.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Researcher and Deputy Editor Online
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
The African Development Bank (AfDB) has been an implementing agency for the Global Environment Facility (GEF) since 2008. The relatively young portfolio has 28 projects over 30 countries on the continent according to the 2014 AfDB and GEF annual report released...
Investment in South African youth through apprenticeships and learnerships will not only create direct benefits for businesses but will also contribute significantly to job creation and socioeconomic transformation in the country.