ICT Africa Headline News

Nigeria: MTN Group Loses Revenue to Promos, Reports R135 Billion

07 March, 2013
Chima Akwaja, Leadership
March 7, 2013

MTN Nigeria's participation in the crazy sales promotions that rocked Nigerian telecom space in the first three quarters of 2012, has negatively affected its contribution to the 2012 Group revenues leading to a loss of R1billion even as the operator reported R135.1 billion and 189.3 million subscribers in its 22 countries of operation.

The financial results which were emailed to LEADERSHIP from MTN Group Headquarters in South Africa yesterday noted that sales promotions, mainly 500 per cent free credits, other freebies as well as the N320 million penalties for quality of service sanction imposed on four mobile operators in Nigeria negatively impacted MTN Nigeria's revenue in 2012.

Corroborating the development, Mr. Wale Goodluck, corporate services executive, MTN Nigeria in a chat with technology media practitioners yesterday afternoon in Lagos said; "MTN Nigeria is down on revenue. What we have seen is that in the last one year is about 30 per cent decrease on tariffs. In the second and third quarter in Nigeria, there was a lot of exuberance by operators which led to 500 per cent free tariffs which impacted our revenue."

He said within this period; "There were all manners of promos with the target on customer acquisition. As a business, we will ensure that our customers' interests are protected. According to the 2012 full financial report, MTN Nigeria experienced a challenging first half of 2012 mainly due to aggressive price competition driven by bonuses on recharge, freebies and other promotional activities."

"Following significant capital expenditure, the network quality improved during the second half of 2012. Together with new value propositions, this enabled MTN Nigeria to regain some market share. The total subscriber base increased by 13.9 per cent to 47.4 million and market share was down 2.5 per cent to 47.5 per cent for the year," the report said.

It added: "MTN Nigeria's total revenue in naira in 2012 was flat compared to the prior year notwithstanding the increase in subscribers. Reported revenue in rand was positively impacted by the relatively weak rand rate against the naira, with the average naira/rand exchange rate 10.66 per cent stronger over the year.

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