MTN subscriber base up by 3.7 percent in December quarter (Africa)
MTN Group recorded 170,573,000 subscribers at 31 March 2012. This is a 3.7 percent increase for the quarter from 164,501,000 subscribers recorded at 31 December 2011. The Group delivered a satisfactory performance notwithstanding continued high levels of competition in key markets.
Consistent with the new management structure, this commentary includes detailed analysis of each of the five larger operations (MTN South Africa, MTN Nigeria, MTN Irancell, MTN Ghana and MTN Syria) and highlights from the rest of the operations. However, a schedule of subscriber and ARPU numbers for all operations is also given.
MTN South Africa contributed 13.3 percent to Group subscribers and delivered a sound performance in a mature market. It increased its subscriber base 3.2 percent for the quarter. The postpaid segment performed well, increasing its subscriber base by 4.4 percent mainly due to attractive data propositions. The prepaid segment increased its subscriber base by 2.9 percent despite increased competition. This was attributable to competitive promotions including the continued success of MTN Zone through improved informal distribution channels. Blended ARPU declined 7.9 percent mainly due to a reduction in interconnect rates to 56 cents in March 2012 from 73 cents previously. Postpaid and prepaid ARPU decreased 6.7 percent and 8.1 percent respectively.
MTN Nigeria contributed 25.1 percent to Group subscribers and increased its subscriber base by 3.0 percent for the quarter. Net connections of 1,258,000 were negatively impacted by a nationwide strike in January and aggressive competition. Slower net connections at the beginning of the year resulted in a marginal loss of MTN’s share of the market. However, corrective measures enabled the operation to increase network capacity and improve net connections later in the quarter. No clarity has yet been provided on the deadline for SIM registration. The harmonizing of MTN Nigeria’s database of registered subscribers with the NCC database is in progress. Local currency ARPU declined by 1.1 percent for the quarter.
MTN Irancell contributed 21.6 percent to Group subscribers. On a proportional basis, reflecting MTN’s 49 percent ownership, its contribution was 11.9 percent. It continued to deliver a solid performance growing its subscriber base by 6.2 percent and increasing its share of the market for the quarter. This was mainly due to attractive value propositions including 2-in-1 SIM packs and various seasonal promotions. At the end of March, MTN Irancell recorded 213 000 WiMax customers. Local currency ARPU increased 3.7 percent due to improved network quality. The third mobile operator is expected to launch commercially in the second quarter of 2012.
MTN Ghana contributed 6.1 percent to Group subscribers, increasing its subscribers 2.3 percent for the quarter and maintaining market share in a competitive environment. This was due to attractive promotions as well as the implementation of a regional structure to better manage sales and marketing. Local currency ARPU increased by 3.4 percent mainly because of revised value propositions. The deadline for SIM registration was 1 March 2012 resulting in a disconnection of 21,237 subscribers representing 2 percent of the subscriber base. The sixth mobile operator had its commercial launch at the end of April 2012.
MTN Syria contributed 3.3 percent to Group subscribers. Its performance continued to be hampered by civil unrest in the country, which resulted in a reduction of subscriber numbers of 23,000 subscribers and a decline in local currency ARPU of 8.5 percent.
The rest of MTN’s operations contributed 30.5 percent to Group subscribers, representing an increase in users of 3.5 percent. MTN Uganda increased its subscriber base by 1.2 percent as the market slowed due to SIM registration. MTN Sudan continued to show good progress, increasing its subscriber base by 5.3 percent for the quarter attributable to attractive value propositions and improved distribution. MTN Cameroon also performed well and increased its subscriber base by 9.8 percent. This was attributable to a more aggressive informal distribution strategy and attractive value propositions. MTN Cote d’Ivoire increased its subscriber base marginally by 0.5 percent because of the removal of 200,000 non revenue generating SIM cards and lower gross connections due to SIM registration.
The Group continues to prioritise key initiatives to better manage the business as consumer trends evolve and competition intensifies. Data and related products and services continued to gain momentum. Data, including SMS, contributes 14.4 percent to revenue, driven mainly by MTN South Africa. Mobile Money has now been launched in 13 countries. At the end of March 2012, MTN had 6.2 million Mobile Money subscribers. Initiatives to optimise costs continue to be rolled out and the centralized procurement initiative is showing solid progress.
Network quality and capacity remains a key imperative for the Group. The majority of the operations continued to aggressively rollout network and achieved satisfactory progress for the quarter.
Mobile operators shift focus towards rural markets (Nigeria)
With the increase in saturation of mobile services in urban markets across the world, mobile operators have shifted their focus to towards the relatively untapped rural markets for better business opportunities and a chance at increasing revenues.
According to reports, industry analysts predict Nigeria the largest mobile market in the continent, to be home to over 90 million subscribers by this year end. Further, improvements in broadband connectivity along with the emergence of new generation smartphones are expected to drive mobile data growth in the economy.
In most rural economies, the lack of adequate infrastructure has been a grave cause of concern for mobile operators as it reduces their profits and drives up costs for customers. Currently, industry reports suggest that a fully functioning network grid could help operators cut their mobile tariffs by 50 percent, which is higher than those being offered in developed countries.
Changes have been observed in the investment environment as well. With operators offering discounted services to low income users in order to expand their reach, the ARPU (Average Revenue Per User) has witnessed a decline. Bharti Airtel, which had acquired Africa’s Zain, slashed its prices by significant amounts in a bid to increase its market share, which increased the pressure across the industry. Further, sources reveal that Etisalat (Saudi Arabia) and Globacom have also been increasingly gaining customers, giving strong competition to market leader MTN.
The next big thing in the economy is being considered to be mobile banking services. With a large portion of the population being unbanked but gaining access to mobile devices, more and more consumers are using their phone to transfer money and pay for goods, in a more convenient and secure manner.
T-Mobile continues to lose postpaid subscribers in the third quarter (USA)
Deutsche Telekom’s subsidiary, T-Mobile USA, has reportedly lost 186,000 postpaid subscribers during the third quarter even though it reported net customer additions of 126,000. According to reports, the number of postpaid subscribers leaving the operator has improved as compared to the 281,000 postpaid subscriber losses during the second quarter but has worsened when compared with 54,000 contract subscriber losses in the third quarter of last year.
As per sources, Philipp Humm, President and CEO of T-Mobile USA, has said that attractive prepaid offerings helped them add customers in the third quarter of 2011. Further, company reports reveal that the prepaid customers went up from 231,000 in the second quarter to 312,000 subscribers in the third quarter.
Regarding the contract ARPU, reports suggest that it remained unchanged at $53 in the second quarter of 2011 and went up from $52 during the third quarter of 2010.
Vodafone UK partners with Velti to drive its loyalty programs (UK)
Vodafone UK, has entered into an agreement with Velti, a leading global provider of mobile marketing and advertising solutions, to drive the next generation of loyalty programs for the operator in the UK. According to reports, Velti aims to target as many as 6 million Vodafone pay-as-you-go customers through this opportunity.
As per sources, Srini Gopalan, Consumer Director, Vodafone UK has said that the Vodafone Freebee Rewardz is yet another reason why customers are choosing Vodafone on pay-as-you-go. It’s a unique scheme offering Vodafone customers something more than just discounts, while enabling customers to take part with whatever pay-as-you-go phone they have. Reports suggest that each time the pay-as-you-go customers refill their account balance; they receive a voucher code through a text message. Customers can either redeem this voucher by claiming an instant reward or bank the points to save up for something bigger. Vodafone UK and Velti have reportedly teamed up with brands such as Thorntons, Blockbuster, Fitness First among others to provide top prizes.
Reports suggest that Menelaos Scouloudis, Chief Commercial Officer, Velti has said that customer retention and ARPU stimulation is vital for operators especially in the pre-paid market where competition is increasingly fierce. He added that by understanding who the customers are and the nature of their relationship with Vodafone UK, the operator is able to provide a more personalized and therefore rewarding experience.
3G to account for 84 percent of all mobile connections by 2016
Industry sources believe that revenues from non-voice services are expected to double to 30% by 2016 in the Middle East and North Africa (MENA), up from 15% in 2010. In an attempt to counter the fall in voice revenues, mobile operators have been shifting their focus to mobile data. Sources claim that mobile broadband will be the leading contributor to the non-voice revenues, with a compounded annual growth rate (CAGR) of 19 percent from 2010 to 2016, while data usage on mobile phones is expected to be the fastest growing segment with a CAGR of 20 percent for the same period. Industry insiders believe that a major contributing factor for the success of mobile data is the adoption of 3G services, which is expected to account 84 percent of all mobile connections by 2016, up from 18 percent in 2010.
Further, with innovations such as facebook messaging and BlackBerry Messenger (BBM) gaining popularity, revenue from messaging services is also expected to be slightly low. Factors such as intense competition leading to price wars, and the use of multiple SIM cards by a single user may cause mobile ARPU to decline in the coming years.
3 Italia service revenues increase by 4% in 2010 (Italy)
3 Italia has reported that its services revenues increase by 4% in 2010 to US$2.39 billion.
Prepaid revenues plunge by 16% to US$483.42 million, while postpaid sales rose 10% to US$1.91 billion. Average revenue per user (ARPU) was almost flat year-on-year at US$33.25.
The postpaid customer base slightly decreased by 1% in 2010, while the prepaid base increased by 4%. 3 Italia served nearly 9.1 million customers at 28 March, of which 5.8 million were prepay users and 3.2 were contract subscribers. 3 Italia achieved EBIT positive operating results in the second half of 2010.
3 Italia reported turnaround of 121 percent to EBIT of US$135.26 million in 2010. Full-year total EBIT includes a one-time substantial benefit of US$205.71 million, related to the assignment of two blocks of 5MHz of 1,800 MHz spectrum.
3G Subscribers in Egypt to Grow Five Fold Till 2012
Egyptian 3G market, which is mainly operated by three operators, possesses huge potential for future growth. Currently, the penetration level is very less with number of 3G subscribers estimated at less than 1 Million at the end of 2009. According to our research report Booming Egypt Telecom Marketâ€, countries 3G market is expanding at a significant rate since 2007 and is projected to grow five fold by the end of 2012. Moreover, operators are making huge investment to upgrade existing technology with an aim to increase their ARPUs.
Our report finds that the main reasons for huge investments in the 3G infrastructure by the three mobile operators in the country, is the saturation in existing 2G networks and declining ARPU in the 2G segment. Operators are trying to convince their customers to move into the new 3G services as a way of freeing up 2G capacity and halting the steady erosion of the ARPUs. Besides, aggressive marketing strategy is being adopted by all the three operators to lure subscribers in Egypt.
According to our research report, various equipment manufacturers are playing an important role in developing Egypt’s 3G network. Nokia Siemens Networks and Huawei have been developing Mobinil’s 3G networks while Alcatel-Lucent and Motorola are cooperating with Mobinil to establish its 2G network. Furthermore, Cisco Systems and Ericsson have had their part in the development and enhancement of the company’s network infrastructure.
Apart from 3G, we have found that Egypt’s mobile market has been growing at a fast pace and is projected to experience smart growth in the coming years. Growth in mobile telephony has been due to an increase in the low-income customer segment over the years. Additionally, stiff price competition between the mobile operators in the country and availability of pre-paid and installment payment options will fuel the segment.
Booming Egypt Telecom Market†provides analysis of Egypt’s telecommunication industry with detail analysis of future potential in different industry segments. The report includes mobile market, fixed line, internet, broadband, 3G, and WiMax market analysis and examines telecom infrastructure in Egypt. The report aims to provide the most accurate outlook of the telecom industry in Egypt.
Egyptian 3G subscribers to grow fivefold by 2012
A new research report has revealed that the Egyptian 3G market is expected to grow five fold by 2012, as compared to 2007.
According to reports, the 3G market, mainly operated by three operators, possesses huge potential for future growth. The 3G penetration level was less than 1 million at the end of 2009 but operators are investing heavily to upgrade existing technology and increase ARPUs.
Operators are trying to convince their customers to move into the new 3G services as a way of freeing up 2G capacity and halting the steady erosion of the ARPUs. Various equipment manufacturers are playing an important role in developing Egypt’s 3G network. Nokia Siemens Networks and Huawei have been developing Mobinil’s 3G networks while Alcatel-Lucent and Motorola are cooperating with Mobinil to establish its 2G network. Furthermore, Cisco Systems and Ericsson have had their part in the development and enhancement of the company’s network infrastructure. Apart from 3G, the report found that Egypt’s mobile market will also grow strongly in the coming years, boosted by an increase in the low-income customer segment, competition between operators and the availability of pre-paid and installment payment options.
China Mobile full year profits rise by 3.9%
China Mobile Corp has reported its full year results. As per the results, its full year revenues rose by 7.3% to US$73.8 billion, while net profit increased by 3.9% to US$18.2 billion.
The customer base rose by 11.8% to 584 million – a rise of 61.73 million over the previous year. Of the total, 20.70 million are using 3G services.
EBITDA rose 4.5% over last year to US$36.43 billion, with EBITDA margin reaching 49.3%.
In addition, voice usage volume continued to grow. Average minutes of usage per user per month (MOU) were 521 minutes, up by 5.4% over last year. Average revenue per user per month (ARPU) was US$11.10, exhibiting a slowdown in decline.
According to the company, it will accelerate the rollout of its TD-LTE network and will still consider suitable overseas acquisitions.
