S.Africa's MTN seeks to add 20 mn new users in 2010

MTN, Africa's biggest mobile operator by subscribers, aims to add 20 million new users in 2010 after 2009 earnings were depressed by currency movements despite strong growth in key markets Nigeria and Iran.

MTN said on Thursday adjusted headline earnings per share for the year to end-December dropped by 16.6% to 754.3 cents.

Headline EPS is the main profit gauge in South Africa and strips out certain one-off, financial and non-trading items.

The group said adjusted headline EPS, excluding the impact of functional currency losses, was up 8.5% to 878.9 cents.

"Movements in exchange rates in the year, mainly in the South African rand and Nigerian naira, had a substantially negative impact on the group's financial results," said Chief Executive Officer Phuthuma Nhleko, who will step down as MTN CEO and group president in March 2011.

MTN shares fell 1.06% to 116.70 rand by 0717 GMT, in line with a 0.28% weaker Johannesburg Top 40 index of blue-chip stocks

"While the final earnings are not great, I think the core business case seems actually alright. It doesn't seem to be under pressure," said David Lerche, a telecoms analyst at Avior Research.

Lerche added that the market was caught out by balance sheet related currency movements, which have depressed earnings.

MTN recorded a 28% rise in group subscribers to 116 million. Nigerian subscribers increased 34% to 30.8 million, Iran users grew by 45% to 23.3 million, while South Africa had a 6.4% drop in subscribers.

MTN, which operates mobile phone networks across Africa and the Middle East, said revenue grew 9.2% to 111.9 billion rand (USD 15.08 billion).

MTN may face tougher competition from its rival, Kuwait's Zain, in Africa as Bharti Airtel seeks to buy Zain's African mobile operations for USD 10.7 billion.

Zain posted a 52.8% fall in third-quarter net profit in November, as the Arab region's third-largest telecoms firm was hit by currency fluctuations and high financing costs.

Vodacom, South Africa's biggest mobile phone operator ahead of MTN and majority owned by British Vodafone, reported a 9.5% increase in customers to 40.5 million for the nine months to end-December.