MTN Group net profits increase by 22.3 percent

MTN Group, a South African-based mobile telecommunications company that has a unit in Rwanda, posted a net profit of Zar7.6b (Rwf586.4b) in the first half of this year compared to Zar6.2b (Rwf479.1b) recorded in the same period last year, according to the company’s mid-financial year report. On the operating basis, the report states that MTN’s net financial costs increased from Zar1.5b (Rwf114.3b) to Zar3.630b (Rwf276.7b). The Group said its market share had dropped to 83 percent as at June 30, 2009 but expects it to recover by 4.4 percent in 2013. A report about the African Economic Outlook (AEO) released in Kigali recently by the African Development Bank (AfDB) states that MTN’s market share dropped from 96 percent to 80 percent by the end of 2008. MTN says that because of increased competition and limited 3G, the group targets to meet the competition as it pans to rollout the 3G technology in key markets as well introducing innovative value propositions plus value added services in places were it operates. The Group’s mobile subscriber base passed the 100 million mark during the reported period to reach 103.2 million subscribers at June 30, 2009, representing a 14 percent increase since December 31, 2008. Subscribers have increased by 39 percent since June 30, 2008. The Group reports its performance by regions namely South and East Africa (SEA), West and Central Africa (WECA) and the Middle East and North Africa (MENA). Its revenues increased by 24.2 percent to R57.3b (Rwf4.4trillion) from R46.1b (Rwf3.5 trillion) in June 2008 which was largely due to the strong growth in subscribers. According to the report, the WECA region remains the largest contributor to Group revenue, contributing 47percent of the total revenue, while the SEA and MENA regions contributed 34 percent and 19 percent respectively. Meanwhile, MTN Group is in merger talks with India’s Bharti as part of its plans to increase its presence in the Asian market. In the merger deal where negotiations started in May this year, the two firms are in talks for Bharti to take a 49 percent stake in MTN, while the South African company would get a 36 per cent stake in the Indian business. Ends