Quarterly update

MTN released their quarterly update for the three months to end September 2014. You can download them here -> MTN Group records 219,2 million subscribers. The highlights points include genuine highlights such as a 2 percent quarter on quarter increase in subscriber numbers, from 214.96 million subscribers at the end of June to 219.19 million subscribers as at the end of September. Data is still on fire, from a growth point of a view, growing 34 percent year on year and now contributes 17.8 percent of total revenues.


Also included in the highlights reel is that the number of registered Mobile Money subscribers increased over 20 percent quarter on quarter, and now numbers 22.2 million, or around 10 percent of the number of subscribers. Another highlight is the recovery of the local market, the original market, South Africa, which saw the addition of 1.4 million subscribers, most of those in the prepaid segment, up 7.1 percent there. 21.224 million subscribers in the prepaid market for MTN in South Africa. Nice recovery in the South African markets, the local ARPU's continue to fall, down 5.1 percent Rand quarter on quarter. In US Dollars it was down 4.9 percent, local ARPU's that is.


In Iran, 3G services were launched (I swear to you I saw someone on my timeline feed retweet the Ayatollah Khamenei's feed, even though Twitter is banned in Iran), the positive impact was a local currency 102.8 percent jump in data revenue. Notwithstanding that massive jump, Dollar ARPU's were 2 percent lower quarter on quarter.


And then something in the highlights package that looks more like it should be in the lowlights package. It is there nonetheless. And it is about Nigeria, where (as per the release), there was Constrained subscriber growth ... as a result of regulatory pressure. Continued unrest in the northern part of the country and indeed the aforementioned pressures as a result of a "dominant operator" ruling in Nigeria, saw a modest decrease in the subscriber base of around 85 thousand customers to 58.363 million. As you can see, this (Nigeria) is their biggest market, in second place is Iran with 43.5 million and of course South Africa (total base) is 26.7 million. Interestingly ARPU's in Nigeria went sideways! In Dollar terms it registered a 6.91 Dollars per user per month in the last quarter, relative to the prior quarter where it was 6.92 Dollars.


Traditionally for all the markets the fourth quarter is where the ARPU's are the strongest, it makes sense, you speak to your loved ones more during the end of year period. The net subscriber additions for the year was adjusted marginally higher to 17.5 million. Nigeria expected to add 3.5 million of those, revised downwards from 5 million. South African, Cameroon and Iran numbers also revised marginally higher, Cameroon the biggest amongst those.


The market I guess is concerned with the largest territory, Nigeria registering a modest subscriber loss due to the dominant position that the business has in that specific market. The stock is down two percent on the news. We continue to expect that whilst ARPU's are sliding that the continued additions to the networks of subscribers, as well as increasingly more services, better handsets and more applications, MTN will still continue to grow their profits in the low teens for the next few years, better and better dividend payments are expected, the stock yields around 5 percent pre-tax forward.