MTN has released its interim results for the six months ending 30 June, detailing its financial performance and the mobile data consumption of its South African users for the first half of the year.
The telco revealed that postpaid data consumption on its network had increased by 51% since the start of the year to 21.9GB.
MTN attributes most of this increase to its fixed network access business.
On the other hand, prepaid users’ data consumption has increased by 9.9% since the beginning of the year, bringing their average usage to 3.1GB per month.
MTN’s total data revenue grew by 2.4% over the reporting period, contributing 47.6% to telco’s total service revenue.
The revenue growth was attributed to active data users increasing by 10.5% to 21.6 million, which brought about a 36.5% increase in data traffic for the six months.
Service revenue increased by 3.2% and 0.6% for consumer postpaid and prepaid services, respectively.
MTN said that economic constraints hindered the performance of its postpaid customer base due to a lack of out-of-bundle spending.
As for subscriber numbers, the mobile network saw a 4.7% increase in its South African consumer base or a net addition of one million — growing to 38.5 million.
Postpaid subscribers grew 9.2% to 9.4 million in H1, whereas prepaid consumers saw a much lower increase of 3.3%, bringing the total to 29 million.
Although the increases in consumption may seem high, it translated into revenue increases of roughly ten times less.
The postpaid business saw a 51% increase in data consumption, yielding 3.2% revenue growth, and prepaid customers increased consumption by 36.5%, yielding a meagre 0.6% growth in revenue.
Asked about this, MTN CEO Ralph Mutipa said that although both the postpaid and prepaid businesses had grown, the prepaid side had been more muted than they had hoped.
This was said to be because prepaid prices were too low for the higher data consumption to affect revenue.
“While this outcome reflected a slight slowdown in momentum in Q2, price increases implemented towards the end of Q2 for prepaid data are anticipated to support an improvement in growth in H2,” MTN said in its financial report.
Mupita also pointed out that there was still work to be done on the pricing of MTN’s biggest driver of postpaid consumption — fixed wireless access.
He said there was very strong demand for residential wireless broadband services, but getting the pricing right would take some time.
