MTN’s master plan to grow South African subscribers

JOHANNESBURG – MTN says it is done with losing market share in South Africa despite the competitive market that has seen consumers hit the brakes on spending.

Africa’s biggest telecoms giant this week reported a 5.7 percent increase in subscribers in 2018, bringing the total subscribers to 31.2 million  from 30 million in 2017. 

MTN chief executive Rob Shuter said the South African management team aimed to grow South African subscribers.

“We are absolutely drawing the line under market share loss in South Africa. We have taken the pain and we have restructured the business. We are not surrendering any market share going forward,” Shuter said.

MTN  is  embarking on a further radio network programme to ensure that it is ready for rolling out 5G as data revenue grew by 12.7 percent  in 2018.  
 Mark Ansley, an analyst at Argon Asset Management, said the South African telecoms market was mature, with very few new subscribers with operators fighting for the same pot of subscribers.  

"Consumers are under strain in South Africa and are being vigilant about when and how they spend their airtime.  Price is becoming increasingly more important in their consumption decision.  Network quality is a basic requirement and regarded as a minimum service delivery that can’t be compromised, Ansley said. 
MTN said it had implemented several changes to its pricing of data packages, and additional changes would be implemented in the coming months as part of its pricing transformation.  

"Given the dramatic fall in data prices in South Africa, the consumers have demonstrated that they may be more inclined to spend less on the same amount of data they have been used to, rather than pay the same rand amount and get more data," Ansley said.  

Pressure is mounting for companies to offer cheaper packages with the entre of new comer Rain adding to the pressure. 

MTN rival Vodacom recently canned its plans to charge customers for the roll over in data following a public outcry.

Vodacom was previously going to charge R5 to roll over 100 megabytes (mb ) in data, R12 to roll over data between 100mb and 250mb, R19 to roll over data between 250mb and 500mb and R29 for data between 500mb and 1GB.

The new Independent Communications Authority of South Africa (Icasa) regulations require all mobile operators to allow consumers to roll over data to the following month starting on March 1.

Asief Mohamed, the chief investment officer at Cape Town-based Aeon Investment Management , said MTN had improved its customer rankings.

“MTN has increased its customer satisfaction scores and service levels. This will help it grow and gain back lost market share in most of its larger markets,” said Mohamed.

“The launch of a $20 (R290) phone by MTN will also contribute to growing both voice and data market share,” said Mohamed, referring to the smart feature phone that was launched this week.

The device, which was developed in partnership with China Mobile, chipmaker Unisoc and software developer KaiOS, includes rear and front-facing cameras, and key Google applications.

MTN plans to launch the device in the first quarter of 2019 across nearly all its markets in Africa.

MTN’s share price rocketed 18 percent on the JSE on Thursday after the market welcomed MTN’s annual results and posted adjusted headline earnings of R3.37 compared to a guidance of R3.28 to R3.46. The company also increased its dividend forecast to 10 and 20 percent range, although the payout would be at the lower end of 10 percent in 2019. 

MTN - MTN's master plan to grow South African subscribers
media reference%3A7aa2cae3eaef43c3a281c0567f675d50 - MTN's master plan to grow South African subscribers
MTN - MTN's master plan to grow South African subscribers
MTN - MTN's master plan to grow South African subscribers

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