Millicom International Cellular (MIC) has reported first-quarter revenues of USD1.168 billion, an increase of 8.4% year-on-year. Net profits for the three-month period dropped by 13.1% y-o-y to USD159 million as CAPEX more than doubled, rising to USD172 million from USD85 million a year earlier. EBITDA grew by 2.2% y-o-y to USD517 million, though the EBITDA margin dipped by 2.9 percentage points to 44.2%, keeping in line with the group’s target of maintaining EBITDA margins in the mid-40s.
MIC’s South American operations – comprising providers in Bolivia, Colombia and Paraguay – saw revenue growth of 17.4% to USD455 million, making up 38.9% of the group’s total revenues for the quarter. MIC’s customer base grew by 10.5% y-o-y to 11.5 million, with 376,000 net additions in the period under review. Wireless ARPU in the region increased from USD12.3 to USD13.1 y-o-y, attributed to an 18.9% y-o-y increase in data users. MIC reported 1.784 million data users across its South American operations, compared to 1.5 million in Q1 2011: MIC added that it has revised its definition of ‘data user’ in Q1 2012 to ‘a customer who uses more than 250Kb of data in a 30-day period, either on 2G or 3G networks. The company restated its interest in acquiring additional spectrum for 4G services particularly in Colombia, where 225MHz of 4G-suitable frequencies are due to be auctioned later this year.
Operations in Central America saw revenue growth of 4.3% y-o-y, to USD474 million, though wireless ARPU dipped to USD11.6 from USD12.1 in Q1 2011. MIC attributed the ARPU slide to pricing pressure, particularly in El Salvador. Revenues were also negatively affected by tax increases, most notably Honduras’ security tax, passed in Q3 2011. Meanwhile, the group’s wireless customer base in the region rose to 15.1 million compared to 13.8 million a year earlier.
Revenues from MIC’s seven African operations were flat at USD239 million, though the group noted a 5.4% y-o-y growth in local currency: currencies in Tanzania and Ghana were down against the US dollar, negatively impacting MIC’s reported growth. MIC reported 17.2 million wireless customers in Q1 2012, up from 15.5 million twelve months earlier, though down from 17.3 million in Q4 2011. MIC expects its customer base to shrink slightly as it shifts its focus from subscriber quantity to quality customers in certain markets. Cross net tariff reductions in Senegal and the Democratic Republic of Congo, and the introduction of flat tariffs in Ghana saw ARPU continue to decline to USD4.6, compared to USD5.2 in the same period of 2011. The group said it was prepared to invest in the region, through CAPEX and price reductions, in order to shore up its position for the long term.
MIC expects CAPEX to continue to grow in 2012 but not exceed 20% of revenues, though the group excludes spectrum acquisitions from its CAPEX guidance. The group has planned to spend USD300 million on IT and billing platforms over the next three years.