18th October 2019

Cash Cow for MTN Group- Mobile Data, Financial Services

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Despite higher operating costs in 2013, MTN Group made healthy gains in net profit, subscriber numbers, and revenue. According to Fierce Wireless, the South Africa-based company noted that data revenues became the company’s top driver of sales growth, as MTN expanded its 3G networks through 2013.

Apparently, the number of data subscribers grew to 80.6 million across all markets by end of 2013. The positive impact on data revenues is credited to the growing availability of 3G.

Although the proportion of voice revenues fell 1.8 percentage points year-on-year due to lower mobile termination rates in 2013, voice remained MTN Group’s top revenue generator accounting for 75.5 per cent of total sales for that year.

Interestingly, overall subscriber numbers grew 9.8 per cent year-on-year to 207.8 million despite MTN Zambia losing 800,000 subscribers post-sim registration.

On the other hand, MTN Group mobile money subscribers grew 57.3 per cent year-on-year to 14.8 million. The greater success of mobile money services in emerging markets than developed markets is attributed to fewer people in developing countries having access to traditional banking and financial services.

In a statement, MTN management said the company will “continue to explore opportunities to expand product offering outside of traditional voice and expect to increase our presence in the digital space by leveraging technology and maximising the opportunity of low internet penetration in our markets.”

Low internet penetration is definitely a gold mine to be struck should the excavation be done strategically for mobile operators (telecoms). In fact, it could be anybody’s game. He who feeds the data-hungry consumers best, gets the most bang for the buck. The advantage of the disruptive nature of the internet is that not only is the business restricted to traditional Internet Service Providers (ISPs) any more, but also caters to any smart enough company willing to cross-cut arenas.

For instance, WhatsApp announced plans to offer voice calling sometime in the second quarter of the year at #MWC2014. Fierce Wireless noted that OTT companies are now promising to offer not only calling and messaging services but social networks, movies, games and even banking services. Additionally, more and more OTT players are now seeking to provide network access itself, giving another challenge to carriers.