Fri Oct 21 15:01:20 SAST 2016

mtn subscriber base soars higher

By unknown | May 05, 2009 | COMMENTS [ 0 ]

Zweli Mokgata

Zweli Mokgata

MTN's subscriber base continues to soar despite complaints from customers of bad service and the global recession.

The company yesterday announced a quarterly growth of 8 percent of its subscriber base across its 21 operations ending in March this year.

However, it only managed to grow by 2 percent (or 259000 users) in South Africa during this period in what is seen as an increasingly saturated market.

And the marginal increase has seen MTN's average revenue per user in South Africa drop by 6 percent (or from R148 to R139 per user).

Revenue for those on contracts was slightly down by 2 percent, while pre-paid ARPU fell by 6 percent.

MTN said in a statement: "The increase in subscribers was due to the mix of seasonal trends, weakening economic conditions and aggressive competition."

It said South Africa's ARPU had decreased "as a result of increased penetration in lower market segments, seasonal trends and a slowdown in consumer spending".

In a bid to defend its market share and in response to Cell C's aggressive marketing promotions, both Vodacom and MTN this year announced their own free call promotions.

These promotions have received massive criticism from users as they attract high call volumes, thus making it difficult for callers to access the network.

South Africa is also seen as somewhat of a stagnant market for the company with mobile saturation nearing 100 percent.

This as it grows subscriber numbers by more than two million (or 14 percent) in Iran and three million (or 12 percent) in Nigeria. Dobek Pater, an analyst at ICT research firm Africa Analysis, said South Africa's mobile operators were on the verge of not being able to add any more subscribers.

He said mobile operators like MTN had been pushing the boundaries of network capacity and quality for several years.

"They've been struggling to secure backhaul lines (from Telkom) and have now decided to build their own fibre networks. South Africa, however, still has some of the largest traffic volumes in Africa, which will still put a strain on networks."


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