MTN South Africa is successful in the roaming switchoo

Wholesale sales at MTN South Africa declined 16.4% in fiscal 2020 after the company’s roaming supply contract with Telkom was terminated and Cell C revenue was required to be reported in cash.

Telkom switched roaming partner in mid-2019 and terminated its agreement with MTN in favor of an agreement with Vodacom, but concluded a roaming contract with Cell C, which had previously roamed with Vodacom. Smaller cellular operators Telkom and Cell C have roaming agreements to serve their customers in areas where they don’t have base stations – mainly in remote areas of the country where it is not financially feasible to provide the infrastructure as a third or fourth operator.

For the year ending December 2020, MTN generated roaming revenue of 2 billion R2 from Cell C – an increase of 10% compared to the revenue generated in the previous year. However, Cell C’s roaming revenues of R 414 million were not recorded until December 2020.

These payments are expected in 2021 upon successful recapitalization of Cell C and recognized in 2021

“These payments are expected upon successful recapitalization of Cell C in 2021 and recognized in 2021,” said MTN. “With effect from May 1, 2020, MTN South Africa started the second phase of the roaming agreement with Cell C. The agreement provides for a three-year transition to a full national roaming agreement in which MTN will carry all network traffic from Cell C. “

MTN South Africa recorded a 1.6% growth in service revenue in 2020. Data revenue rose 15.3%, aided by the Covid-19 pandemic and work-from-home measures. Earnings before interest, taxes, depreciation and amortization rose by 4.5% to R 17.7 billion.

Capex moderation

The investment amounted to R 7.5 billion, a moderation compared to the high network investments in recent years which, according to various independent surveys, have ensured that MTN has the best network in South Africa.

The 1.6% growth in service revenue was supported by prepaid (+ 2.9%) and postpaid (+ 8.6%) companies, which bounced back well from the impact of regulatory changes in 2019, MTN said.

“Total services revenue was also increased by robust performance in the broader Consumer business and growth in the Enterprise business. The core business of mobile communications increased service revenue by 4.6%. “

The total number of subscribers rose 3.1 million to 32 million due to stronger gross additions and improved churn. The main driver was an increase in prepaid customers by 2.4 million to 25.3 million – the highest level in two years. The number of postpaid subscribers rose by 664,000 to 6.8 million.

The South African entity reported 207,000 active MoMo (mobile money) customers after the service restarted in the local market in January 2020. The company’s main focus in this area is on the distribution and expansion of deposit and withdrawal points through both formal and formal informal channels. – © 2021 NewsCentral Media

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