MTN’s South African subsidiary increased its profit margin, calculated using earnings before interest, tax, depreciation and amortisation (Ebitda), by 1,3 percentage points to 33,4%, suggesting a solid turnaround in the operation, which has underperformed in recent years.
For the 12 months to December 2015, revenue rose by 2,9%. This was on the back of a 9,3% increase in the number of subscribers to 30,6m. Data revenue grew by 37,2%, while service revenue — excluding handset sales and other revenue — rose by 7,5%.
“MTN South Africa delivered encouraging results despite operational challenges, including industrial action in the first half of the year,” the telecommunications group said on Thursday.
The local operation is led by former Microsoft South Africa MD Mteto Nyati, who took the reins in July 2015 from Ahmad Farroukh.
“A strong focus on customer experience, competitive offerings, aggressive network roll-out and employee engagement resulted in a successful turnaround in the second half of the year,” MTN said.
The prepaid segment performed particularly well, with subscriber numbers climbing by 12,3% to 25,3m on the back of “attractive” voice and data offerings.
R10,9bn on capex
However, the post-paid customer base fell by 3,3% to 5,2m because of problems with supplying handsets, although this “normalised” in the fourth quarter of the year.
“Total revenue increased by 2,9%, driven mainly by healthy growth in data revenue. This was, however, offset by an 18% reduction in handset revenue and a 2,4% decrease in outgoing voice revenue,” MTN said.
It said the expansion in the Ebitda margin was the result of cost-containment initiatives, which included lower staff and advertising costs and lower handset sales. However, the expansion of the network — MTN South Africa’s capital expenditure in the period was a record R10,9bn, almost double 2014’s capex number — resulted in higher rent and utilities and transmission costs.
In 2015, the operation added 966 2G, 1 593 co-located 3G and 3 148 co-located 4G/LTE sites. – © 2016 NewsCentral Media