Cellular giant MTN may have struggled in the South African market, but its diversified presence in emerging markets ensured that group revenue growth was maintained.

MTN today reportied a 28% growth in group subscriber numbers and a 9,2% increase in revenues to R111,9-billion. The group's adjusted headline earnings per share were 16,6% lower at 754.3 cents, but this was due to significant movements in exchange rates. Without the substantial impact of functional currency losses, adjusted headline earnings per share increased by 8,5% to 878.9 cents.
Subscriber numbers in South Africa decreased by 6,4%, while the region showed an EBITDA margin decline of 1,7% to 31,4%.
"For the first time we have seen MTN really struggling with its operations in South Africa," says Frost & Sullivan ICT industry analyst Spiwe Chireka. "Regulatory risks have been a key factor impacting the company's performance. Interconnection fee cuts and subscriber registration have dampened both revenue and subscriber growth."
However, Chireka does expect a recovery from the operator in the next 12 months. Frost & Sullivan's global analysis indicates that mobile operators' short-term revenues tend to suffer following interconnection cuts, but they can make a full recovery through strategies such as increased subscription charges, lower subsidies and reduced incentives for distribution.
In addition, the FIFA World Cup is likely to boost revenues for MTN through airtime sales, roaming fees and match content delivery.
Performance in Nigeria was encouraging, with 30% subscriber growth for the period. Revenue in local currency increased by 33%, but due to the strength of the South African currency, this translated into growth of just 5,6% in rand terms.
EBITDA for the West and Central African region as a whole increased by 6,7%, while EBITDA in the Middle East and North Africa region showed the biggest improvement, growing by 24,2%.