(Adds CEO comment, details of results, share price)
JOHANNESBURG May 3 MTN Group reported
a 7.1 percent rise in first-quarter group revenue helped by a
strong performance in data services, Africa's biggest mobile
phone operator said on Wednesday.
Ratings agency Fitch downgraded MTN to junk status in April
and gave it a negative outlook, citing weakness in the economic
and operating environments of its main subsidiaries in South
Africa and Nigeria.
MTN said data revenue, which contributed 20 percent of total
revenue, was up 29.4 percent for the three months ended March
Shares in MTN were up 1.36 percent to 128.52 rand at 0700
"In our key markets of South Africa, Nigeria and Iran,
significant network investments made over the past few years are
underpinning the improving revenue trends," Group Chief
Executive Rob Shuter said in a statement.
"The network investment planned for 2017 is expected to
support further market share gains across our markets."
Year-to-date capital expenditure stands at 4.6 billion rand,
Founded with the help of Pretoria at the end of white rule
in 1994, MTN is seen as one of post-apartheid South Africa's
biggest commercial successes, but clashes with regulators in
recent years have raised questions about its governance and have
hobbled its growth.
The firm, which does the bulk of its business in emerging
markets, said Nigeria's subscriber base declined by 2.3 percent
in the quarter due to new regulations, while total revenue
increased by 11.6 percent.
MTN agreed to pay a fine of 330 billion naira ($1.1
billion), reduced from $5.2 billion, in June 2016 after a
prolonged legal battle to end a dispute in Nigeria over missing
a deadline to cut off unregistered SIM cards, which continues to
sap its subscriber numbers.
"The ongoing network investment in Nigeria is delivering
continued improvements in data quality in the metro areas and
highlights MTN Group's commitment to the Nigerian market
notwithstanding the challenging macro environment," Shuter said.
MTN is the largest mobile phone operator in Nigeria with
about 60 million subscribers, and the country accounts for about
a third of its revenue.
MTN's South Africa unit reported a 4.1 percent increase in
service revenue, while Irancell booked a 76.7 percent increase
in data revenue.
(Reporting by Nqobile Dludla; editing by Vyas Mohan and Jason