MTN Ghana H1 revenue up 22%, data revenue up 193%

MTN Ghana CEO, Michael Ikpoki

MTN Ghana recorded US$734 million revenue in the first half (H1) of 2012, representing 22% growth compared with its full year (FY) revenue for 2011.

Much of the growth was attributed to a whopping 193% growth in data revenue (excluding SMS) from the 3.4 million data customers and 987,000 smartphones on its network.

The company also recorded 5.9% increase in subscriber base within the same period, finishing H1 with 10.758 million subscribers, representing 46% mobile market share (according to National Communication Authority) but 50.5% according to MTN.

But MTN acknowledged in the report that it current market share represents and slight reduction from that of December 2011, and indeed, the NCA's figures show MTN made a marginal loss of 1% market share from a month before.

The company also reported a slide in average revenue per user (ARPU) from US$7 in December 2011, to US$6.3 by June 2012, on stiff competition in the market heightened by the entrance of a sixth mobile operator in April this year.

It attributed the subscriber base growth to attractive market offerings and promotions, and the revenue growth to 18.8% growth in airtime subscription, 193% growth in data revenue (excluding SMS), 11% growth in interconnect gains, and 11% growth in revenue generating minutes.

EBITDA (earnings before interest taxations depreciation and amortization) margins, otherwise known as operational profits, stood at 37.7%.

But some of the gains, was also affected by 14% interconnect cost due to increase in off-net traffic, and that left MTN with a 3% deficit on the interconnect balance sheet, and 23.2% increase in operational expenses (OPEX) compared to the same period last year.

Moreover, total capital expenditure (CAPEX) also grew by a whopping 99% compared to the same period last year, and the company reported 53% of the full year CAPEX for 2012 has already been used.

The Opex items included interconnect cost, rent and utilities (up by 130%), as well as distribution and commission cost (up by 29%). Capex items included mainly improvement in capacity and quality of service (one new switch and data centre), and increase in increase in 3G coverage.

MTN stated in the report that its WACS submarine cable, which landed in Ghana months ago, is expected to be launched commercially in the second half of this year.

MTN Ghana remains the overwhelming market leader in Ghana, and it has gained 508,446 subscribers between January and June 2012, which is 53.5% of its targeted 950,000 subscribers for the whole of 2012.

Meanwhile, at the group level, subscriber base grew by 6.9% to 176 million; total revenue grew 17.5% to US$8.1 billion; H1 profits topped US$2.65 billion; EBITDA margin up 0.3% points to 44.9% and the company is giving shareholders 321 cents dividend per share, after buying back R2.088 million worth of shares.

The report attributed its revenue successes to solid growth in South Africa, Iran and Ghana, and also to currency changes.

Meanwhile, in confirmation of a trend that telcos have been worried about, the Group's effective tax rate increased 1.15 percentage points to 38.10%, which is about the same level of taxes telcos in Ghana pay.

Groups Capex increased 77.7% to R10.14 billion compared to the same period last year.

This was mainly due to an aggressive rollout programme implemented earlier in the year and the ongoing focus on critical capex investment programmes across the Group's operations. However, capex was lower than anticipated due to equipment delays and slow site approvals by authorities among other things.

Meanwhile, MTN is currently fighting a lawsuit filed by Turkcell accusing it of bribery in its Iranian investment. MTN denies the allegations, but reports say for the past six months, it has been finding difficulties moving cash out of its operations in Iran, which is responsible for 20% of its subscribers and about 10% of the group's revenue.

MTN operates GSM networks 21 countries in Africa and the Middle-East, and has internet service provider license in 13 countries across three continents, and it is a market leader in most of the countries it operates in.

Story by Ghana/Samuel Nii Narku Dowuona/Adom News