South African mobile operator MTN may be lagging behind market leader Vodacom in terms of subscribers, but the local unit of MTN Group is winning the profitability race, reporting a net income of ZAR2.1 billion (USD333.77 million) for the six months to 30 September, compared with its rival’s figure of ZAR1.4 billion. Although both companies posted similar revenues – MTN’s turnover was ZAR11.2 billion compared to Vodacom’s ZAR11.3 billion – the former said it had registered a higher profitability by emphasising cost cutting and by running a leaner operation. MTN added 537,000 subscribers in the period under review to lift its total to 5.36 million, giving it a market share of 34.36%. At the same date Vodacom controlled close to 55% of the sector with over 8.5 million subscribers, 1.3 million of whom are post-paid users. Meanwhile, market newcomer Cell C, which only launched commercially in November 2001, brought up the rear with an estimated 1.74 million customers despite having doubled its market share in the course of the year.
South Africa’s mobile sector is growing rapidly and could reach 19 million subscribers within the next two years. According to a report published by the South Africa Business Guidebook 2003, the market is worth around ZAR16 billion and is expected to grow to about ZAR23 billion by the end of 2004. Both MTN and Vodacom see the country as key to their short-term interests on the continent. SMS and MMS services in particular have experienced a rapid surge in popularity, with Vodacom reporting that in the six-month period to 30 September, SMS text messaging rose by 39.4% to over 910 million messages sent. The cellco recently launched its Vodacom Office Anywhere corporate product suite to maximise the potential afforded by MMS.