MTN South Sudan Subscribers Fall 10% Since Violence in July

(Bloomberg) -- MTN Group Ltd.'s South Sudan unit said it has lost about 10 percent of its subscribers since violence flared in July and half its transmission sites are offline, as the subsidiary of Africa's biggest mobile-phone company by sales tries to ride out a three-year civil war.

Most customers lost were in the southern region of Equatoria, which has been riven by insecurity in the aftermath of fighting in the capital, Juba, about 11 months ago, said Khumbulani Dhlomo, MTN South Sudan's head of corporate services. The operator previously had about 1.2 million subscribers.

“We have seen most customers either being displaced or leaving jobs or leaving the country,” Dhlomo said in an interview in Juba. As an economic crisis caused by the war continues, “some just left using MTN because they don't have income,” he said.

Oil-producing South Sudan has seen its currency collapse and inflation surge above 400 percent since conflict erupted in December 2013 and curbed crude output. The International Monetary Fund said the economy probably contracted as much as 6.9 percent in the 2015-16 financial year. The landlocked country has sub-Saharan Africa's third-largest crude reserves and is pumping as little as 120,000 barrels per day.

Tens of thousands of people have died in the war and more than 1.8 million have fled the country, with a new phase of violence beginning last July with the collapse of a short-lived transitional government in which rebel leader Riek Machar shared power with President Salva Kiir.

Network Affected

MTN South Sudan in June 2016 said it was cutting about 50 jobs and making changes to the way it sold airtime because of the economic downturn. Two months later, it said its network in a number of states was affected by the July violence and that insecurity meant it wasn't able to do routine maintenance.

Only about 190 of MTN's almost 400 nationwide transmission sites are currently operational, Dhlomo said. In the same interview, Chief Executive Officer Philip Besiimire said while investment is “very tough” given the economic crisis, MTN is committed to staying put and restoring services.

The company competes with Zain South Sudan, a unit of Kuwait's largest mobile-phone provider, which said in August it had reduced operations and cut expatriate staff to survive the crisis.

“We believe the story of South Sudan will change, that this country will turn the corner,” Besiimire said. “Things will get better because no situation is permanent.”

To contact the reporter on this story: Okech Francis in Juba at fokech@bloomberg.net.

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Michael Gunn, John Bowker