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Telecom reports suggest growing adoption of mobile data services in Africa

August 13, 2012  »  BusinessNo Comment

With the July-August transition comes an abundance of financial reports from telecoms companies. (The standard for the industry is a half-yearly report following the January 1 – June 30 period, but many operators also release quarterly updates.) This time around, we managed to find press releases or summaries of press releases from 13 telecommunications companies with a presence in Africa. The reports cite a variety of benchmarks like revenue, profit, and subscriber base, but they also explain the causes for changes in these metrics. Historically, the focus has been on sheer mobile growth (revenue and customer base), but, for Africa, the focus has recently shifted more to the contribution of data services.

Compared with a year ago, key highlights include double-digit revenue increases and even better gains in data revenue contribution. In fact, in MTN has reported greater than 100% growth in data revenue in both Ghana and Nigeria in recent months. Airtel, however, is facing a large drop in net profits as the company intensifies Africa operations.

The most common challenges facing telcos are increased competition, high licensing costs, and a decline in average revenue per user (ARPU) as customers shift from voice to data plans.

A thorough outline of the largest telecom operators’ African results from either the first half or second quarter of 2012:

MTN Ghana:

  • +22% revenue in H1 12 vs. FY 11
  • 193% growth in data revenue (excluding SMS) from 3.4 million data customers and 987,000 smartphones
  • Market share declined slightly since December 2011 (is between 46-50%)
  • Decline in average revenue per user (ARPU) from US$7 to US$6.3 in 6 months ending June 2012 (attributed to the entrance of a 6th mobile operator)
  • WACS cable to be launched commercially later in 2012
  • Source: MyJoyOnline

MTN South Africa:

  • 49% increase in data revenue
  • Data revenue contributes nearly 16% to total revenue (up from 11.6% in last 6 months of 2011)
  • Handset revenue grew 29% due to demand for higher value phones
  • 11.9 million data users with 4.4 million smartphones
  • ARPU trended downward (attributed to four different causes)
  • 3G population coverage of 56%
  • 3,600 3G co-located sites now exist after adding 446 in the previous 6 months
  • National fibre routes nearing 100% completion
  • LTE criteria still being finalized by MoC
  • Source: MyBroadband

MTN Nigeria:

  • Revenue grew 4.4% in first half of 2012
  • Contributes 24% to the MTN Group subscriber base in 21 countries
  • 130% increase in data revenue due to improved 3G coverage and increased number of smartphones
  • Source: Leadership
  • (NCC claims MTN is the only telecom service provider in the country making a profit)

Bharti Airtel:

  • Operation in 17 African countries
  • 37% drop in net profit in Q2 2012 as the result of increased costs and competition in Africa
  • 31.5% revenue growth in Africa business, but net loss more than doubled
  • Licensing costs in Africa necessitated cuts in 3G tariffs to attempt to turn a profit
  • Intensified market operations, advertising, network roll-outs, new growth initiatives (3G, Airtel Money, Rwanda)
  • Increased competition in Ghana
  • May take more time than March 2013 to achieve revenue and earnings goals from African operations
  • ~35% revenue growth in Sierra Leone, Ghana, Uganda, and DRC (together contribute 18% of Africa revenue)
  • Revenue growth is estimated to be single-digit/negative for Chad, Niger, Seychelles, Madagascar, Kenya, Malawi and Congo-Brazzaville (together constitute 21% of Africa revenue)
  • Africa ARPU fell 5% to $6.5 over the previous quarter
  • Source: Livemint.com

France Telecom (Orange):

  • Revenues in Africa and the Middle East increased by 6.2% year-over-year
  • 3G offers have been launched in 14 of the 20 African and Middle Eastern markets
  • Sharp revenue rebound in Ivory Coast (33.6%)
  • Notable strong performance in Guinea, Cameroon, and Senegal
  • Minor decline in revenue in Mali
  • Source: Orange

Vodacom:

  • Operations in SA, DRC, Tanzania, Mozambique, Lesotho
  • Active data customers increased by 152% in Q2, with data revenue up by the same percentage
  • Competition among rivals for data revenue is increasing
  • Source: Mail & Guardian

Etisalat:

  • Operates in 17 countries across Middle East and Africa
  • +17% quarterly profits
  • Strong market development in Egypt, Benin, Gabon, Togo
  • Focusing on high population, high growth markets such as Egypt and Nigeria
  • Source: Gulf News

Orascom Telecom:

  • Djezzy (Algeria) revenue down 1%
  • Djezzy ARPU decreased by 12% since new subscribers have a “relatively low usage pattern”
  • Telecel (Zimbabwe, Burundi, Central African Republic) revenue down by 4%
  • Telecel subscriber base up 34% QoQ
  • Cites mobile penetration at 21% in Burundi, 19% in CAR, 60% in Zimbabwe
  • Source: Orascom

Maroc Telecom:

  • Net income declined by 22% (revenue down by 1% year-over-year) in the first half of 2012
  • International customer base grew by 37% (vs. 13.7% domestically)
  • Large shift from prepaid to postpaid customers
  • Blended ARPU dropped by nearly 6%
  • 19% growth in the ADSL subscriber base (to 630,000 subscriptions)
  • Source: Telecompaper

Zain Group:

  • Operates in 8 markets across MENA
  • 1% increase in YoY revenue and net income for H1, 2012
  • Facing challenges in Sudan and South Sudan
  • Source: Zain

Qatar Telecom (Qtel):

  • 11% decline in Q2 2012 profit partially due to adverse foreign exchange movement in Algeria
  • Recently bought Orascom’s 50% stake in Telecom Tunisie for $1.2 billion
  • Positive momentum from previous quarter in Tunisia and Algeria
  • Source: Bloomberg

Telecom Egypt:

  • 25% decrease in Q2 net income
  • Lower revenues from international cable services, among other causes
  • ADSL subscribers increased by 3.9% to 1.206 million in the 3 month period
  • Source: Telecompaper

Mauritel (Mauritania):

  • 11% increase in H1 2012 revenue versus previous year period
  • 20% rise in mobile services
  • Customers rose by 7% to 1.96 million
  • Source: Telecompaper

Sonatel (Senegal):

  • Net profit rose 15% during H1 2012 despite increased competition and unfavorable regulations in Senegal and Mali
  • Source: Reuters

Onatel (Burkina Faso):

  • 28% annual increase in mobile subscriber base in H1 2012 vs. H1 2011
  • ARPU increased by 9.6% year-over-year
  • Internet customer base grew by 5.9% to 31,000 subscribers
  • Source: Telecompaper

Portugal Telecom:

  • Unitel (Angola): Revenue increased by 14% y.o.y. on voice usage and increasing penetration of mobile broadband
  • MTC (Namibia): Revenue increased by 24% y.o.y. and data revenue made up 22.9% of service revenue. Time was spent on launching 4G services and growing broadband customers under the brand ‘Netman’
  • CVT (Cape Verde): Data revenue drove overall growth. New efforts included 3G services. Broadband customers increased significantly.
  • CST (Sao Tome & Principe): Slight declines in revenue despite launching 3G service that should reach 90% coverage by the end of the year.
  • Source: Portugal Telecom

Safaricom:

  • Has 600km of optical fibre deployed and will add another 800km within 20 months.
  • Internet usage grew by 69 percent to 6.5 million subscribers quarter over quarter.
  • Source: Reuters