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Ongoing investment into broadband and data solutions has helped MTN Group maintain a healthy performance in terms of revenues over the first six months of 2012. Data revenues increased its contribution to 10% from 7% reported in the previous interim result.

In its interim result this week, MTN Group revealed that its subscriber growth was higher than expected because of increasing competition in flagship markets, such as Nigeria and South Africa. The group reported a 6,9% growth in subscriber numbers to 177-million, and a 17,5% increase in group revenue to R66-billion.

“MTN South Africa (SA) has recorded 23,5-million subscribers, representing a growth rate of 6,8%,” states Frost & Sullivan’s ICT research analyst Mervin Miemoukanda. “This proves the company’s successive marketing promotional campaigns have paid off. It is interesting to note that most new subscribers are dual SIM card holders and low-income earners.”

With the current  mobile operator price wars, MTN SA is likely to experience a sharp decline in revenues as their subscribers are expected to sign up to other more competitive operators. This will put a lot of pressure on group revenues as subscribers are likely to spend their income between MTN and its rivals, according to Frost & Sullivan. If MTN SA replicates Cell C and Vodacom’s tariff plans, its revenues are likely to further decline, as the company cannot compensate the loss for airtime revenues with revenue generated by subscriber acquisition.

MTN SA, therefore, needs to re-think its pricing strategy to remain competitive in the market the analyst believes.

“It should be noted, however, that there are a lot of growth opportunities in the broadband and enterprise solution space”, Miemoukanda says. “It is possible for MTN Group to have an upper hand in the broadband and data centre space in key markets, such as Nigeria and Ghana.”

A case in point is MTN Business, which has taken over leadership positions of ISPs in Nigeria and Ghana in less than one year. This impressive performance can be attributed to MTN’s expansive telecom infrastructure in these countries.

Although the company has done well in Ghana in the first six months of 2012, it is expected to face tough competition in the country with the launch of Glo Mobile Ghana. Unlike Airtel and Express Ghana, Glo Ghana has an extensive telecom infrastructure and a strong focus on data and enterprise solutions. It is predicted the company will emerge as a strong contender to MTN in the coming months.

Furthermore, the continued healthy performance of MTN Business, across its operations, has helped the group cushion some of the pressure on the mobile voice segment.

“MTN Group is likely to enjoy slower growth rates, in terms of subscribers and revenues in the second half of 2012, because of the challenging operational environment, intense competition in most markets, the uncertainty about the Iran operations and ongoing war in Syria” Miemoukanda says.