While MTN saw strong subscriber growth outside SA, it lost 834,000 prepaid customers in South Africa from June to September of this year.
The company is losing customers to cheaper pre-paid options, including Telkom's R100 per gigabyte offer, says one analyst.
But MTN's revenue from pre-paid continued to climb, despite its declining subscriber base.
MTN released its quarterly update for the three months to end-September on Monday. The update showed strong overall growth in subscriber numbers.
Across all its markets, subscribers increased by 2.5 million to 225.4 million.
But while MTN saw strong subscriber and revenue growth from its markets outside of South Africa (revenue from Ghana and Nigeria grew by 23% and 17% respectively), the update confirms that the company is losing local prepaid customers at a rapid rate.
While the number of MTN contract subscribers increased by 120,000 to 5.7 million in this period, the mobile network lost 824,000 prepaid subscribers. It now has 23.7 million pre-paid subscribers.
The company lost a total of 1.5 million subscribers in South Africa in the year to September 2018.
Ruhan du Plessis, a telecommunication analyst at Avior Capital Markets, says increasingly competitive pricing is putting pressure on MTN.
Telkom, which is now offering a gigabyte for R100, has been particularly aggressive, and now offers significantly cheaper data packages compared to MTN, says Du Plessis. Also, newcomer Rain is offering R50 per GB of data.
"The challenging economic environment in SA has made customers more and more price sensitive. Given how easy it is to switch between operators these days, clients will move to cheaper alternatives to navigate turbulent times," says Du Plessis.
MTN extracted more revenue out of its remaining prepaid customers, though. Revenue from its prepaid service rose R2.8 million to R77.5 million despite the fall in subscribers.
Source: Business Insider