MTN’s Subscriber Growth Slowest in a Year on Oil Price Fall

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MTN Group Ltd.’s subscriber numbers rose at the slowest pace in a year during the first quarter as a declining oil price and a weaker economy affected the growth of Africa’s largest wireless operator.

MTN’s customer base increased by 1.8 percent to 227.5 million across 22 countries in the three months through March, the Johannesburg-based company said in a statement on Thursday. That’s the slowest pace since a 1.1 percent gain in the first quarter of 2014.

The wireless carrier was “impacted by a weaker macro-economic environment following the reduction in the price of oil in 2014 and continued price competition,” Chief Executive Officer Sifiso Dabengwa said in the statement. MTN Nigeria showed “improved subscriber growth trends although revenue and minutes growth remains a challenge.”

MTN has been cutting costs and exploring potential acquisitions as revenue shrinks in its home market of South Africa, where it trails crosstown rival Vodacom Group Ltd. in terms of customer numbers. The company is trying to boost data revenue amid price competition and regulatory pressures.

MTN shares declined 0.8 percent to 224.54 rand as of 9:20 a.m. in Johannesburg, paring the year’s gain to 1.4 percent. Vodacom is trading 12 percent higher in 2015.

Subscriber numbers in Nigeria, MTN’s biggest market, increased 2.1 percent to 61.1 million after the company offered promotional deals, while call volumes fell amid rising inflation and lower customer spending. Average revenue per user declined 1.4 percent.

Subscribers in South Africa, the operator’s second-largest market, were little changed at 28 million while data sales in the country increased by 22 percent year on year. Vodacom has 32.6 million active customers.

“MTN South Africa continues to focus on cost containment initiatives and optimizing its operating model,”the company said in the statement.

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