MTN Reports Ten Percent Drag in Profits

MTN Reports Ten Percent Drag in Profits Yesterday, Africa's largest mobile phone company MTN reported its half yearly earnings and the company said that its profits for the period has slid 10.3%. The main reason for the drop in profit was cited as the disruption in handset supply in the South African market due to a prolonged seven week strike.

In May, almost two thousand entry-level workers stopped working at the South African facility of MTN in Johannesburg. That disrupted the supply of new mobile phones in its mainstay market.

The mobile company also operates in many of the other African nations including Nigeria. It reported diluted headline earnings of 654c a share for the first six months of the year which ended in June. Last year same period the company had reported earnings of 727c a share.

MTN's sales dropped l 4.9% to R69.2-billion during the period. It was also affected by unfavorable currency equation and weak performance in Nigeria. In that market, slow moving economy resulted in low consumer spending taking a toll on the sales figure of the mobile company.

Other than that, MTN also was unable to acquire suitable sites in Nigeria for further expansion of infrastructure. Adding to its troubles, the rival companies have better signal quality where as the high-end customers of MTN could not avail higher internet speeds.