Fall in MTN’s market share in economies traced to general drop in purchasing power
Leading telecoms analysts in Nigeria have traced the observed drop in MTN’s market share and others in some economies to shocks in the disposal income of subscribers’ which led to the serious impairments in uptake of telecoms services in 2017.
It would be recalled that the Nigerian and South African economies suffered recession within the period under review.
MTN group’s five-year review document published as part of its integrated report for the year ended 31 December, 2017, shows that MTN’s biggest market which is Nigeria, rode on 49 per cent market control in 2013 and 2014, but ebbed to 42 per cent last year.
Analysts say judging by last year’s general economic indices, there is general drop in productivity plus real sector activities in 2017 and the trend touched several economies.
This development defined telecoms market performances in other economies including Iran, Cameroon, Ivory Coast and Syria where activities has been relatively stable, fluctuating marginally between 46 per cent and 47 per cent between 2013 and 2017.
South Africa was not isolated within the period as MTN’s market share dropped by a compound annual growth rate (CAGR) of 3 per cent between 2013 and 2017.
Business Hilights recalls that in 2013, MTN had 35 per cent market share; this dropped slightly to 34 per cent in 2014 and 2015, and then grew to 36 per cent in 2016 before dropping down to 31 per cent in 2017.
MTN says it has the largest market share in 14 out of the 22 countries it operates in; down slightly from being number one in 15 countries between 2013 and 2016.
The five-year review reveals headline earnings for the group have been falling by a CAGR of 40 per cent over the past five years.
In 2013, MTN’s headline earnings were almost R25.9 billion; this amount rose to R28.2 billion in 2014, then down to R13.6 billion in 2015.
A year later, the group saw a headline loss of R1.4 billion before swinging back to a profit of close to R3.3 billion in 2017.
The headline loss in 2016 was significantly impacted by the group’s regulatory fine in Nigeria. In June 2016, MTN agreed to a settlement amount of N330 billion ($1.671 billion at the time) to be paid to the Nigerian Government in six instalments over three years. This after it failed to meet a deadline to disconnect 5.1 million unregistered SIM cards on its Nigerian network in 2015.
Accordingly, a decline in MTN’s share price on the Johannesburg Stock Exchange has seen the group’s market capitalisation plummet from R409.5 billion at the end of 2014 to R253.4 billion at the end of 2017.
The story of drops in subscriber base, however, was not same in every economy as some markets gained improvement including Ghana, which grew from 50 per cent market share in 2013 to 55 per cent by the end of 2017.
Also, Uganda gained ground from 54 per cent in 2013 to 56 per cent in 2017 and Sudan also ticked up from 34 per cent in 2013 to 35 per cent five years later.
Investigations show that virtually every network in Africa had a pinch of loses in subscriber base.
