MTN Nigeria woes deepen; loses 6% market share, 4.4m subscribers in 1 year

BY Nse Anthony-Uko

ABUJA (Sundiata Post) – Telecommunication giant, MTN Nigeria has had its woes compounded with the loss of six percent off its market share in the the one year period from June 2015 to June 2016 following the deactivation of 4,403,344 subscribers, thus further shrinking the gap between it and the second largest operator.
This was contained in the latest industry report on the performances of the telecoms operators in the last one year on the website of the Nigerian Communications Commission (NCC).
MTN which hitherto held a firm grip on the sector with over 45 percent share of the market now holds 39 percent as at the end of June 2016 with a total of 58.4 million subscribers. This came down from the 62,813,111 subscribers it had by the same time last year.
Glo has now significantly reduced the gap between it and MTN, while opening up a substantial gap between it and Airtel. Both Glo and Airtel were at par in terms of market share before then with each having 21 per cent.MTN Nigeria has faced a lot of hard times in recent times following its failure to deactivate unregistered lines as stipulated by the Nigerian Communications Commission (NCC) in October last year.MTN was fined  a whopping sum of N1.04 trillion for failure to deactivate 5.2 million unregistered SIMs by the expiration of the deadline set by the NCC. After more than eight months of negotiations, the fine was finally reduced to N330 billion to be paid over five instalments till 2019.

The SIM card fine, as well as inclement operating environments and depressed economies which have reduced average revenue per use (ARPU) in key markets like Nigeria, South Africa and few others have impacted negatively on the group’s bottom line with a dip in its profit for the first time in 22 years.
The headline loss came in at 4.9 billion rand or 271 cents per share, in the six months ended June 30, 2016.
This is compared with headline earnings of almost 12 billion rand, or 654 cents per share, a year earlier.

MTN also said the results were affected by unfavourable currency swings, underperformance in its home market and in Nigeria where it had to cut off another 4.5 million SIM cards to comply with local registration requirements.
MTN had in any case been struggling to accelerate subscriber and profit growth as years of price wars and regulatory pressure hit margins and weakening economies squeezed consumer income.
The operator said “financial performance for the six months ended June 30, 2016 reflects the confluence of a number of material issues, which created the “perfect storm”. We have made strides towards resolving these challenges although many of these factors fall outside of its control.

MTN, however, said it is investing in infrastructure rollouts, securing telecoms and cable broadcasting spectrum licences in Nigeria. It is also diversifying into digital financial services to restore investors’ confidence as well as eyeing new revenue stream for expansion with plan to list part of MTN Nigeria shares on the Nigerian Stock Exchange (NSE) in 2017.