MTN GROUP LIMITED - Quarterly update for the perio22 Oct 2015
MTN 201510220017A
Quarterly update for the period ended 30 September 2015

MTN Group Limited

(Incorporated in the Republic of South Africa)

Registration number: 1994/009584/06

ISIN: ZAE000042164

Share code: MTN

(“MTN” or “the Group”)


Quarterly update for the period ended 30 September 2015


MTN is a leading emerging market mobile operator, connecting approximately 233 million people in 22 countries across

Africa and the Middle East. MTN is at the forefront of global technological changes, delivering a bold, new Digital 

World to our customers.


Highlights

Subscriber growth of 0,9% quarter-on-quarter (QoQ)

Subscriber growth in South Africa increased 2,0% QoQ driven by pre-paid segment 

5,1 million disconnections in Nigeria relating to the subscriber registration process resulted in muted net additions

in the quarter

Registered Mobile Money subscribers of 36,5 million, up 12,7% QoQ across 14 operations

Constant currency data revenue increased by 27,0% year-on-year (YoY), now contributing 23,2% to total revenue

Voice and data traffic increased 18,7% and 120% respectively (YoY)


YoY refers to: nine months to September 2015 versus nine months to September 2014.

QoQ refers to: Q3 2015 versus Q2 2015.



MTN Group president and CEO, Sifiso Dabengwa comments:

"The Group’s third quarter results reflect continued progress made in the South African operation strengthening its 

market position and significant improvements in network quality following corrective measures taken in MTN Nigeria.

 

The Group continued to invest in its 3G network catering for increased demand for data services. During the quarter 

we added 3 800 3G sites and 1 357 LTE sites. This together with increased 3G device penetration resulted in more than 

100% YoY increase in data traffic across our operations. Mobile Money and digital content revenues continued to gain 

healthy traction, steadily increasing their contribution to revenue.  



However, aggressive price competition, weakening macroeconomic conditions in most of our markets and unfavourable 

exchange rate movements continued to impact financial performance for the quarter.”


Operational review

MTN South Africa continued to gain momentum, increasing its subscriber base by 2,0% to 29,1 million for the quarter.

This was mainly as a result of a 3,1% increase in the pre-paid subscriber base, supported by the continued success of

attractive below-the-line campaigns. Billable minutes of use increased 41,4% YoY.


The post-paid subscriber base recorded a 2,6% decline to 5,2 million due to the disconnections of approximately 90 000

low-cost router SIMs recorded on the Autopage subscriber base and low availability of handsets. While supply chain

issues have been largely resolved, the operation continued to experience limited availability of handsets during the 

quarter as a result of delayed deliveries. 


Data revenue increased 40,0% and now contributes 31,5% to total revenue. This was driven by attractive segmented data

bundles and an increased uptake of digital services. The rollout of the 3G and LTE networks continued to make good

progress with 1 746 largely co-located 3G and 811 LTE sites added during the quarter. ARPU increased 8,8% for the 

quarter.


MTN Nigeria recorded a marginal decline in its subscriber base to 62,5 million subscribers. This was mainly as a

result of the disconnection of 5,1 million subscribers at the end of August 2015 in line with industry-wide regulatory

registration requirements. To date, 3,4 million of these subscribers have been reconnected. While management continues 

to engage with the regulator, performance continues to be impacted by ongoing regulatory restrictions. Billable minutes 

of use increased 12,8% YoY.


The operation has put corrective measures in place to address the operational challenges experienced in the first half

of the year and has seen significant improvement in network quality together with more competitive offerings. A chief 

operations officer role has been established in the operation to reinforce the management team. Jyoti Desai, Group chief 

technology and information officer, has temporarily been appointed to this role and Raul Medina has been appointed as 

chief marketing officer.


Data revenue increased 16,8% and now contributes 21,3% to total revenue. Data revenue growth was impacted by a steep

decline in data tariffs as a result of aggressive competition. The effective data tariff declined almost 60% YoY.

Improving data speeds through aggressive 3G rollout in main cities remains a priority and is on track. During the 

quarter 630 3G and 66 LTE sites were rolled out. Digital revenue continues to gain traction, now contributing 10,2% 

to total revenue.


Diamond Yellow, the mobile money offering, continues to make good progress with a key focus on expanding the

distribution footprint. Local currency ARPU declined 5,0%.


MTN Irancell delivered a strong performance in a competitive market increasing its subscriber base by 3,0% to 45,5

million with an incremental increase in market share. This was attributable to segmented on-net bonus promotions and

attractive data bundles. Billable minutes of use increased by 9,0% YoY. Constant currency data revenue increased by 

89,9% YoY largely attributable to the 28,5% YoY increase in data users as well as the 386,2% YoY increase in data 

traffic. Data revenue now contributes 28,5% to total revenue. The operation remains focused on driving data services 

and has rolled out 1 012 3G sites and 498 LTE sites for the quarter. Local currency ARPU increased by 0,9% supported 

by higher minutes of use.


MTN Ghana delivered a sound performance increasing its subscriber base by 4,1% surpassing 15 million at the end of the

quarter. This was driven by superior network quality and attractive acquisition promotions and bundled offers. Billable

minutes on the network increased 38,4% YoY. Constant currency data revenue increased 78,6% and now contributes 28,7% to

total revenue supported by a high-quality 3G network and strong growth in Mobile Money and digital services. 


Mobile Money recorded 5,3 million subscribers, growing revenue 199% YoY and now contributes 5,2% to total revenue,

while digital services revenue grew 89,0% and now contributes 7,2% to total revenue. 


MTN Cameroon decreased its subscriber base by 4,0% to 9,9 million impacted by the disconnection of low-cost routing

subscribers and a revised subscriber registration process. The operation continues to experience aggressive price

competition which resulted in the effective rate per minute declining 15,5% YoY. Billable minutes of use increased 

4,6% YoY. Constant currency data revenue increased by 58,7% and now contributes 13,7% to total revenue. This was 

supported by attractive data value propositions and data bundles.


Mobile Money subscribers increased by 8,0% to 1,9 million. The operation continues to focus on the expansion of its 

3G network and rolled out 34 2G and 27 3G sites during the quarter. Local currency ARPU improved by 6,2% supported by

below-the-line offers.


MTN Ivory Coast recorded a marginal decline in its subscriber base to 8,5 million following the clean up of the

subscriber base. The billable minutes of use declined 5,5% YoY as the business faced increased competitive pressures 

from competition. Constant currency data revenue increased by 58,6% YoY and now contributes 15,2% to total revenue.


Mobile Money subscribers increased by 1,9% to 2,8 million. The operation continues to focus on expanding its 3G and

LTE network to cater for the increasing demand for data services. During the quarter, 30 2G and 89 3G sites were 

rolled out. Local currency ARPU declined by 3,2%.


MTN Uganda increased its subscriber base by 3,4% to 11,5 million, attributable to increased take up of MTN Zone and

attractive voice bundles. Billable minutes of use increased 19,1%. Constant currency data revenue increased by 

14,8% YoY supported by improved data bundles and now contributes 26,8% to total revenue. 


Mobile Money continued to show solid growth, recording a 9,6% increase in registered subscribers to 9,0 million. Local

currency ARPU increased 5,1% largely attributable to increased minutes of use following a reduction in the effective

tariff.


MTN Sudan reported a net reduction of 442 000 subscribers for the quarter to 8,3 million subscribers largely impacted

by subscriber registration requirements. Constant currency data revenue increased by 78,9% YoY, driven by an increased

uptake in digital content and now contributes 18,3% to total revenue. There is a continued focus on 3G network rollout

and improved network quality. Local currency ARPU increased by 2,8%.


MTN Syria improved its subscriber base marginally to 5,7 million. The operation continues to operate in extremely

challenging conditions. Despite this, constant currency data revenue increased 25,0% YoY and now contributes 27,4% 

of total revenue. Local currency ARPU increased by 8,6%.


Net additions guidance ’000



                       June 2014  September 2015  

 South Africa              1 800           1 600  

 Nigeria                   5 000           4 500  

 Iran                      1 600           2 000  

 Large opco cluster        4 850           3 850  

 Ghana                     1 500           1 700  

 Cameroon                  1 150             750  

 Ivory Coast                 800             750  

 Sudan                         0            (500) 

 Syria                         0            (150) 

 Uganda                    1 400           1 300  

 Small opco cluster        3 380           2 750  

 Other joint ventures        120             100  

 Total                    16 750          14 800   


Subscribers 

(‘000)


 Country                  1Q14       2Q14       3Q14       4Q14       1Q15       2Q15       3Q15    QoQ %  

 South Africa           24 875     25 269     26 701     27 993     27 958     28 504     29 077      2,0  

 Post-paid               5 192      5 458      5 477      5 419      5 402      5 328      5 190     (2,6) 

 Pre-paid               19 683     19 811     21 224     22 574     22 555     23 176     23 888      3,1  

 Nigeria                57 224     58 446     58 363     59 893     61 149     62 813     62 494     (0,5)  

 Large opco cluster     53 757     55 822     56 824     56 735     57 734     59 407     59 511      0,2  

 Ghana                  13 055     13 439     13 547     13 852     14 208     14 886     15 493      4,1  

 Cameroon                9 236     10 233     11 223      9 658     10 097     10 363      9 949     (4,0)  

 Ivory Coast             7 521      7 742      7 723      8 016      8 295      8 488      8 461     (0,3)  

 Uganda                  9 549      9 920     10 181     10 396     10 791     11 146     11 524      3,4  

 Syria                   5 723      5 653      5 676      5 861      5 747      5 765      5 769      0,1  

 Sudan                   8 672      8 836      8 474      8 951      8 595      8 757      8 315     (5,0)  

 Small opco cluster     29 913     30 155     31 146     32 188     33 543     33 450     33 791      1,0  

 Yemen                   5 185      5 268      5 300      5 355      5 595      5 239      5 255      0,3  

 Benin                   3 259      3 337      3 455      3 533      3 782      3 913      3 989      1,9  

 Afghanistan             6 058      6 182      6 339      6 435      6 390      6 487      6 503      0,3  

 Congo B                 1 865      1 911      1 972      2 012      2 038      2 128      2 216      4,1  

 Rwanda                  3 525      3 621      3 743      3 820      3 889      3 958      4 010      1,3  

 Zambia                  4 161      4 010      4 447      4 932      5 386      4 901      5 026      2,6  

 Liberia                 1 355      1 308      1 299      1 294      1 319      1 300      1 300      0,0  

 Conakry                 2 885      2 929      2 890      3 035      3 272      3 485      3 362     (3,5) 

 Cyprus                    399        336        339        337        331        354        356      0,7  

 Bissau                    490        550        575        596        636        705        689     (2,3)  

 South Sudan               732        704        787        839        904        982      1 084     10,4  

 Joint venture          44 296     45 268     46 157     46 587     47 119     46 822     48 181      2,9  

 Iran                   41 783     42 697     43 533     43 940     44 421     44 146     45 464      3,0  

 Botswana                1 700      1 702      1 696      1 758      1 783      1 784      1 794      0,5  

 Swaziland                 813        868        928        889        915        892        923      3,4  

 Total subscribers     210 065    214 961    219 191    223 396    227 503    230 997    233 054      0,9   

 
ARPU

(Local currency)

 Country                     1Q14          2Q14          3Q14          4Q14          1Q15          2Q15          3Q15     QoQ %  

 South Africa               95,21         93,58         89,26         91,55         87,16         88,44         96,21       8,8  

 Post-paid                 189,30        166,37        159,76        170,00        159,52        163,86        194,58      18,7  

 Pre-paid                   71,98         74,16         70,40         72,06         69,75         70,40         74,04       5,2  

 Nigeria                 1 177,82      1 124,34      1 123,29      1 118,11      1 102,59      1 046,45        994,44      (5,0) 

 Large opco cluster                                                                                                              

 Ghana                      11,73         11,97         12,02         12,59         12,32         12,53         12,52      (0,1)  

 Cameroon                2 469,15      2 193,14      2 274,49      2 166,95      2 225,90      2 043,26      2 169,43       6,2  

 Ivory Coast             3 095,89      2 883,62      2 830,00      3 133,92      2 946,57      2 797,32      2 708,13      (3,2)  

 Uganda                  8 974,72      8 688,11      8 801,30      8 687,07      7 998,46      7 148,75      7 512,37       5,1  

 Syria                     718,37        797,17        778,42        767,15        706,14        795,23        863,86       8,6  

 Sudan                      12,36         13,21         13,07         13,88         14,77         15,46         15,89       2,8  

 Small opco cluster                                                                                                              

 Yemen                   1 182,54      1 171,57      1 159,58      1 087,12        970,24        786,84        920,73      17,0  

 Benin                   3 764,70      3 613,43      3 689,51      3 796,19      3 512,75      3 438,86      3 594,24       4,5  

 Afghanistan               180,62        195,43        190,33        179,85        159,27        170,64        180,09       5,5  

 Congo B                 5 494,05      5 350,72      5 985,40      5 554,26      5 312,87      5 365,33      5 597,42       4,3  

 Rwanda                  1 655,75      1 684,02      1 763,68      1 545,17      1 538,99      1 562,92      1 565,57       0,2  

 Zambia                     28,58         32,57         38,33         33,70         28,61         28,34         32,00      12,9  

 Liberia                     6,98          6,34          3,93          5,22          5,07          4,70          3,96     (15,8)  

 Conakry                29 163,91     22 552,64     18 718,42     20 334,09     19 190,61     17 043,90     14 874,41     (12,7)  

 Cyprus                     18,20         19,90         19,12         17,67         17,15         17,57         17,81       1,4  

 Bissau                  2 315,70      2 619,19      2 323,20      2 229,73      2 201,47      2 473,65      2 111,39     (14,6)  

 South Sudan                24,82         26,14         29,08         24,69         26,13         26,33         24,52     (6,9)  

 Joint venture                                                                                                                   

 Iran                  102 834,76    108 478,89    109 683,56    110 005,75    110 351,87    114 958,63    116 024,94       0,9  

 Botswana                   65,00         66,00         72,00         73,56         61,04         63,21         68,24       8,0  

 Swaziland                 100,88        100,03         98,17        102,10         94,26         93,73        103,30      10,2   



 ARPU

(US dollar)


 Country                1Q14     2Q14     3Q14     4Q14     1Q15     2Q15     3Q15     QoQ %  

 South Africa           9,31     8,86     8,34     8,21     7,45     7,46     7,42      (0,6)  

 Nigeria                7,21     6,92     6,91     6,47     5,68     5,25     4,99      (5,0) 

 Large opco cluster                                                                           

 Ghana                  4,70     4,04     3,35     3,93     3,57     3,15     3,29       4,5  

 Cameroon               5,15     4,60     4,58     4,11     3,83     3,43     3,68       7,0  

 Ivory Coast            6,46     6,04     5,70     5,95     5,07     4,70     4,59     (2,5)  

 Uganda                 3,58     3,45     3,36     3,19     2,79     2,34     2,13      (9,0)  

 Syria                  4,81     4,88     4,60     4,06     3,31     3,04     2,95      (3,1)  

 Sudan                  2,17     2,32     2,29     2,38     2,47     2,59     2,62       1,1  

 Small opco cluster                                                                           

 Yemen                  5,50     5,45     5,39     5,06     4,51     3,66     4,06      11,0  

 Benin                  7,86     7,57     7,43     7,20     6,05     5,78     6,09       5,3  

 Afghanistan            3,16     3,39     3,34     3,12     2,76     2,89     2,86      (0,8)  

 Congo B               11,46    11,21    12,06    10,54     9,14     9,02     9,48       5,2  

 Rwanda                 2,46     2,49     2,58     2,26     2,27     2,25     2,21      (2,1)  

 Zambia                 4,97     5,05     6,26     5,35     4,23     3,83     3,65      (4,7)  

 Liberia                6,98     6,34     3,93     5,22     5,07     4,70     3,96     (15,8)  

 Conakry                4,23     3,28     2,72     2,91     2,69     2,34     2,01     (14,4)  

 Cyprus                24,91    27,35    25,39    21,99    19,35    19,37    19,80       2,3  

 Bissau                 4,83     5,49     4,68     4,23     3,79     4,16     3,58     (14,0)  

 South Sudan            7,85     8,27     9,20     7,81     8,26     8,33     7,75      (6,9)  

 Joint venture                                                                                

 Iran                   4,13     4,26     4,18     4,11     4,01     4,03     3,91      (3,0)  

 Botswana               7,28     7,52     8,10     8,29     6,27     6,35     6,28      (1,0)  

 Swaziland              9,35     9,47     9,12     9,15     8,06     7,81     7,97       2,0   

 The financial information on which this quarterly update is based has not been reviewed or reported on by MTN’s

 external auditors.


Fairland

22 October 2015


Sponsor

Deutsche Securities (SA) Proprietary Limited
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