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Africa's top mobile phone operator, MTN Group has given a downbeat outlook for its Nigerian market after losing high-end users to Gulf rival Etisalat.
MTN had reported a 10 percent decline in first-half earnings and is fighting to maintain its lead in Nigeria ahead of competitors such as Etisalat 7020.SE and India's Bharti Airtel (BRTI.NS).
But poor network quality in vital areas of the capital Abuja and in the commercial hub Lagos, has prompted its more affluent clients to switch to Etisalat.
According to MTN's Chief Executive, Sifiso Dabengwa, "the key issue really for us has been to improve the data quality and speeds," Dabengwa told reporters and analysts at the company's results presentation.
"Clearly, Etisalat's network, from a data point view, has been better than ours."
MTN will use the bulk of a 19 billion rand ($1.5 billion) spending package for the rest of this year to expand high-speed networks in Nigeria and South Africa, where rivals such as Vodacom Group (VODJ.J) and Cell C have slashed voice tariffs to gain market share.
However, spending on a network in Nigeria, Africa's most populous country, is unlikely to deliver a strong enough performance to offset the impact of a sharp economic slowdown which is curbing consumers' disposable income.
"We expect the balance of the year to remain challenging for MTN Nigeria," the company said in its results announcement.
Reuters
MTN had reported a 10 percent decline in first-half earnings and is fighting to maintain its lead in Nigeria ahead of competitors such as Etisalat 7020.SE and India's Bharti Airtel (BRTI.NS).
But poor network quality in vital areas of the capital Abuja and in the commercial hub Lagos, has prompted its more affluent clients to switch to Etisalat.
According to MTN's Chief Executive, Sifiso Dabengwa, "the key issue really for us has been to improve the data quality and speeds," Dabengwa told reporters and analysts at the company's results presentation.
"Clearly, Etisalat's network, from a data point view, has been better than ours."
MTN will use the bulk of a 19 billion rand ($1.5 billion) spending package for the rest of this year to expand high-speed networks in Nigeria and South Africa, where rivals such as Vodacom Group (VODJ.J) and Cell C have slashed voice tariffs to gain market share.
However, spending on a network in Nigeria, Africa's most populous country, is unlikely to deliver a strong enough performance to offset the impact of a sharp economic slowdown which is curbing consumers' disposable income.
"We expect the balance of the year to remain challenging for MTN Nigeria," the company said in its results announcement.
Reuters
