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MTN SMS Revenue Decline Heavily   
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MTN Ghana posted a 48.3% decline in SMS revenue, falling from US$37.5 million at the close of 2010, to US$19.4 million full year 2011.

The company reported 43.4% decrease in SMS revenue but the actual SMS revenue in South African Rand was ZAR149 million for 2011, and for 2010 was ZAR288 million; the percentage decline from that is 48.3% and not 43.4%.

MTN blamed the heavy decline on ‘regulatory requirements to change sms promotions’, and MTN Ghana CEO, Michael Ikpoki explained those regulatory requirements were the insistence of the National Lotteries Authority that some of the text and win promotions by telcos were lottery.

Indeed, those regulatory requirements are not new; except MTN and some other telcos had in the past violated them by charging high premium SMS rates in text and win promotions such as ‘Text GO 2010’ and ’90 Cars in 90 Day’, all of which were carried out in 2010.

But the decline in SMS revenue is not limited to Ghana alone; all the other major MTN operations experienced decline in SMS revenue, except Syria, which recorded a marginal increase from US$58.2 million to US$61.85 million.

Data revenue (excluding sms) however continued to gain footing, increasing by 79.7%. The company also recorded a net interconnect revenue of US$48.3 million, which is a 13.3% dip from US$55.73 million at full year 2010.

The fall in net interconnect revenue was in spite of a 31.5% rise in interconnect revenue for MTN in 2011. The reported said “interconnect costs rose more than interconnect revenue due to competitive off network tariffs.”

Indeed, in the presentation of results to the shareholders, the company stated that interconnect costs was 64% of total interconnect revenue, meaning MTN paid more money to other telcos as mobile termination rate (MTR) than it gained.

But the report stopped short of stating what the total interconnect revenue was for the year, and what the total interconnect cost was also. Average revenue per user (ARPU) also fell marginally by 2.8% and finished at $7 per subscriber per month.

Meanwhile MTN Ghana posted some US$784.093 million as total revenue for the year, and increase subscriber base by 16.5% to a little over 10.156 million to firmly maintain its lead in Ghana.

The company reported that its subscriber base represented 52% market share; but from the registered 90-day active subscribers that MTN and other telcos submitted to the NCA at the end of December 2011, MTN’s 10,156,112 subscribers was 48% and not 52% of 21,165,845.

But MTN Ghana CEO, Michael Ikpoki insisted MTN uses registered active subscribers for 90 days to generate its subscribers and to monitor active subscribers of competition, and based on that, MTN has 52% market share.

The company confidently projects it would add on some 950,000 subscribers in 2012, setting aside the fact that a sixth operator, Glo, is starting operations this year, and has already had close to two million requests for number reservation prior to commercial launch.
Source: Samuel Nii Narku Dowuona

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