MTN cements its position at the top of Africa’s telecoms market

Africa’s largest mobile telecoms operator MTN Group counted 90.7 million subscribers at the end of December 2008, up 48 per cent year-on-year.

The increase in subscribers was driven largely by MTN Irancell and MTN Nigeria, which added 10 million and 6.6 million subscribers respectively, during the course of the year.

MTN Group CEO, Phuthuma Nhleko said the operator would consider investments outside the MEA is they made sense

Group revenue was up 40 per cent to ZAR102.5 billion (US$10.83 billion) driven by the strong growth in subscribers and the relative appreciation of operating currencies to the rand. EBITDA increased by 36 per cent to ZAR43.2 billion, while after-tax profit amounted to ZAR17.14 billion, up 43.8 per cent year-on-year.

The operator incurred expenditure of ZAR28.3 billion on CAPEX in 2008, an 84 per cent increase, while it continued to focus on evolving its networks and actively seeking infrastructure, transmission and site sharing opportunities across its operations. MTN also invested approximately ZAR250 million to gain access to significant submarine cable capacity through the SAT-3, WACS, EASSy and EIG initiatives.

In addition to sound operational performance, the depreciation of the rand against the dollar resulted in the effective appreciation of many African and Middle Eastern currencies against the rand for a major portion of the year, positively affecting the net trading results of MTN Group by approximately 15 per cent.

MTN’s West and Central Africa region continued to be the largest contributor to group revenue making up 47 per cent of total revenue, compared with 42 per cent in the prior financial year, while South and East Africa (SEA), and Middle East and North Africa (MENA) contributed 37 per cent and 17 per cent respectively.

MTN Irancell’s EBITDA margin turned positive to 30.2 per cent from negative 13.4 per cent as the business picked up critical mass. The South Africa EBITDA margin dropped two percentage points to 32.8 per cent, as a result of management’s strategic decision to invest in distribution.

Looking ahead, MTN said it remains cautiously optimistic about its prospects for 2009 in challenging trading conditions.

Strategic priorities include actively seeking value-accretive expansion opportunities in emerging markets, with a potential to act as a consolidator in the current market environment.