Half year results from MTN. 152 million subscribers.

Talking ton up, out of all the stocks that I have been watching for over a decade, this is perhaps falling into the category of most exciting. MTN have released interim results this morning. Subscribers have ballooned to 152.3 million people, that is now nearly more than any single African country, Nigeria has 155 million inhabitants, so expect MTN to overtake that in the coming months. Perhaps they have done that already.

Right, let us dive into the numbers pool, adjusted HEPS up to 470 cents per share and the declaration of 273 cents per share interim dividend is perhaps going to be the biggest surprise in all of this. As they point out, the payout ratio has increased to 65 percent and certainly looks like one of the most juicy yielders on the JSE right now. Strange how all those years back the company was regarded as such a poor yielder, Telkom was better the crowds murmured. Yeah, how is that working out? Probably fine, if you held that position you would have got a whole lot of Vodacom shares too.

Margins have been maintained ex the sale of some of their towers. Group revenues up one percent to 56.5 billion Rand. What you are starting to see is the traditional revenue streams are decreasing, but data is increasing sharply: "Continued investment in transmission (undersea cables and fibre) and radio technologies (2G, WIMAX and 3G) as well as mobile data solutions and sourcing of appropriate handsets. These have enabled the group to increase data revenues (excluding SMS) by 24.1% to R3,558 million and total data revenues (including SMS) by 14.2% to R6,950 million."

Mobile money is another interesting innovation, if (and this is a big if) we could see the same sort of uptake in West Africa that we have seen in East Africa, this will be a far bigger part of their business in the future. Currently there are 5.1 million registered users of Mobile Money. Listen in closely here, MTN said that data revenue (6.3 percent of total) overtook SMS revenue (6 percent of total) for the very first time.

Mostly however the firmer Rand to the other currencies had the biggest impact on overall revenues. "Local currency growth in Nigeria, Ghana and Iran increased by a healthy 13.1%, 11.9% and 28.2% respectively, despite increased competition." No revenue growth in Nigeria when measured in ZAR, Iran grew 12.1 percent in ZAR and South African revenue grew 5.9 percent, but the weaker Naira to the US Dollar hurting ZAR revenues. I was once told, don't be fooled, in Nigeria everything happens in US Dollars. Shriek, don't the Nigerians know about the Bernanke? Kidding.....

Capital expenditure was one third less to 5.7 billion ZAR, in part delays. I was interested to note that the company is investing some of their free cash in Nigeria in government bonds. Hey, why not. We have something exciting to say about Nigeria too, soon, in a second.

If you want to have a look at the MTN presentation, download it here MTN Group interim results. Scroll to page ten. The first bit, about increased competition is where you must keep a close eye on. Tarrifs are declining on both the voice and data side. But I agree a lot with point two in growth in data services, the Handset strategy part. That for me is the future. You can't compare Africa to Europe, nearly all customers are in the pre-paid environment, the move to post paid will take a long time and will follow economic growth in Africa.

The strides made over the last decade have been huge. I checked the interim results from November 2001 (they changed their year end, back then it was a March/September reporting period), MTN had only 3.54 million subscribers in South Africa and had only 100 thousand subscribers in Nigeria. Cameroon and Uganda had more subscribers than Nigeria. HEPS were 41.7 cents for the half year to September 2001.

And EBIDTA margins would you believe were exactly the same then, as they are now, around 44 percent. They have never let margins slip. Oh, and by the way, the international operations were making a loss, major capital expenditure back then as you can imagine. The share price was not the best back then, taking a caning from 50 ZAR in 2000 to a low of just above 8 ZAR in 2003. So, as ever it depends where you bought them in that era. The lowest that I can ever see their share price having been was 215 cents per share, soon after listing 15 years ago. The all time high of 165 ZAR was in 2008 when that flurry of deal activity with Indian mobile firms was reaching frothy proportions.

The more important question is, do you buy them today? What does the future hold? Greater data revenue for sure. More services being used on MUCH BETTER handsets, yes. The question is the cost of those handsets to African consumers and are they affordable? Most welcome is the much better dividend payout. The board continues to look at all options, be that even bigger dividend payouts, or share buybacks, CEO Sifiso Dabengwa was kind of cagey when asked what options the board are exploring. His simple answer was that we were exploring all options.

I suspect that whilst voice revenues will come under pressure, data and its associated applications on better handsets will become a much bigger part of total revenue. Increased mobility, increased applications, your handset is like your wallet, and in fact will become more important than your wallet. We continue to like the African expansion story, albeit at a slower rate, but the base is so much bigger. The company still expects to add 20 million subscribers for the full year, that is over 5 times the TOTAL subscriber base back in 2001. Be careful when you say this business is ex growth, the growth rate of the total subscribers is slowing, revenue impacts from lower voice revenue is slowing and currency translations are volatile. Fact of the matter is that they have the assets and the networks. We continue to accumulate them at these levels.