Viewpoint
MTN Group, one of the largest Communication Service Providers (CSP) in Africa, is redefining its presence in the continent with renewed focus and commitment to its people.
It is emerging as a resilient leader in ICT industry. Its recent financial result for the first half of 2021 and its recently-announced Ambition 2025 Strategy reflect its single-minded focus on Africa and its desire to contribute to the region’s growth.
As per the recent results, the service revenue has increased by 20% in H1 to reach R82 billion in constant currency terms. Besides, Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) increased by 24% to touch R39 billion.
MTN reported a decline of 10% in Headline Earnings Per Share (HEPS). This is mainly because of non-operational and one-off items, including accounting adjustments related to MTN’s Middle East portfolio and COVID-19 donations. The adjusted HEPS, excluding non-operational and one-time expenditure, increased by 31.5%, and the ROE is increased by 4.2% to 18.3%.
What is significant is that the company has made considerable progress in bringing down its debt. Its debt has decreased to R36.7 billion from R43.3 billion, and the Holdco leverage has been reduced to 1.4 times in the first half of the year. This has helped it to boost the cash inflow received from our operating companies of R9.3 billion. This includes R4.0 billion received from Nigeria and R1.8 billion in proceeds from the sale of MTN’s stake in Belgacom International Carrier Services.
What further sets it apart is its commitment to provide new-age high-speed connectivity to people from all segments of society. Based on this belief, it increased the number of people covered by broadband by more than 25 million and brought down the average effective data rate per megabyte across its markets by more than 17%.
To further support Africa’s economy, MTN paid cash taxes of R7.2 billion, up by 47% year-on-year. In line with its commitment to work sustainably, MTN is also working closely with its suppliers and partners to reach the target of net-zero emissions by 2040.
The Ambition 2025 Strategy
MTN’s Ambition 2025 strategy truly sets it apart from other African service providers. The initiative was created for "Leading digital solutions for Africa’s progress."
"Notwithstanding the many challenges presented by the COVID-19 pandemic, MTN delivered a solid H1, exceeding most of the Group’s medium-term targets through sustained commercial momentum as we executed on our Ambition 2025 strategy," said MTN Group President and Chief Executive Officer Ralph Mupita.
MTN’s Ambition 2025 strategy is built on its strong core strengths, including the largest fixed and mobile network in Africa, a large subscriber base, a vast distribution network, and a strong brand that resonates with people in Africa.
"This [Ambition 2025 strategy] will rest on scale connectivity and infrastructure business, making use of both mobile and fixed access networks across the consumer, enterprise, and wholesale segments. The implementation of this growth strategy will be accelerated through selective partnerships and leveraging MTN’s brand as the most trusted and valued in Africa, while it will be supported and funded through enhanced cost and capex efficiencies," says MTN’s mission.
The strategy was released by Ralph Mupita, MTN President, and shares its approach for the next five years. Essentially, the plan is built on four priorities: build the largest and most valuable platforms, drive industry-leading connectivity operations, create shared value, and accelerate portfolio transformation.
The Ambition 2025 strategy is a compelling opportunity for growth in Africa. It is designed to enable MTN to move from a `product’ to `platform’ play for new-age competencies. Moreover, it will allow MTN to leverage partnerships to accelerate its growth. With enhanced risk and regulatory framework and disciplined capital allocation, MTN is set to become Africa’s leading provider in scale connectivity and infrastructure business.
With a presence in 21 markets and more than 277 million voice subscribers and 117 million data subscribers, MTN is currently the largest service provider carrier in Africa. It also boasts of almost 49 million active Mobile Money users and eight million users of the instant messaging platform Ayoba. Over the next five years, the Ambition 2025 strategy will help the Group improve its operating results and profit.
Focus Africa
MTN’s commitment to Africa can hardly be doubted or questioned. However, the company recently announced its withdrawal from competition for new licenses in Ethiopia and has decided not to participate in the new liberalization processes underway in the country.
Further, it announced its exit from the Middle East market last year. The Group also decided to simplify its portfolio by withdrawing from Syria. It is also exploring options to exit Yemen and Afghanistan in an organized manner. At the same time, the MTN Group plans to explore new market opportunities in other African countries without compromising its focus on the markets in which it is already operating.
In Closing
MTN’s Ambition 2025 Strategy promises not just to boost its revenue and profits but also to ensure a seamless transition from a product approach to a platform strategy in line with the evolving needs of the people. The next few years will see MTN build a future-ready network for Africa’s overall social and economic growth.
