Africa\u2019s biggest mobile-phone operator, MTN, says it has launched a new transformation strategy –\u00a0IGNITE – at its two biggest operations in South Africa and Nigeria, after ‘the most challenging year in the company’s 22-year history’.<\/p>\n
The operator said that IGNITE will be rolled out progressively to all operations. The programme will ensure a well-coordinated approach throughout MTN, enabling operations to execute their mandates effectively and deliver excellence in customer experience and value propositions.<\/p>\n
It comes amid declining revenue growth, and as the group continues to struggle to recover from its regulatory woes in Nigeria.<\/p>\n
On Thursday MTN reported a marginal 0.4% rise in revenue for the year ended December 2016, to R146.89 billion, however, it reported a headline loss per share of 77 cents.<\/p>\n
Additional highlights:<\/p>\n
“MTN Group\u2019s financial results for 2016 reflect the most challenging year in the company’s 22-year history, precipitated by a number of material regulatory, macro-economic and political challenges experienced across our regions. However, despite these difficulties, the business began to show encouraging first signs of a turnaround, the group said in a statement.<\/p>\n
Following the conclusion of the settlement agreement relating to the Nigerian regulatory fine in June 2016, the infusion of new senior management and the appointment of a new CEO commencing on 13 March 2017, MTN said its board undertook a deep and ‘fundamental strategic review’ of the business and its processes to ensure MTN is operating far more optimally in a complex and difficult operating environment.<\/p>\n
Through IGNITE, MTN said it aims to:<\/p>\n
MTN said that group revenue was negatively impacted by the depreciation of the rand against the US dollar as well as lower-than-expected top-line growth in Nigeria and South Africa.<\/p>\n
Revenue increased marginally to R146.89 billion while organic revenue increased 2.9%, the group said.<\/p>\n
The group reported a number of once-off costs, which negatively impacted EBITDA. These costs included the Nigerian regulatory fine of R10.499 billion; professional fees related to
\nthe settlement of the Nigerian regulatory fine of R1.324 billion; and the MTN Zakhele Futhi share-based payment expense of R1.008 billion.<\/p>\n
MTN said the Nigerian fine had a 500 cents negative impact on HEPS. In addition, HEPS was negatively impacted by foreign exchange losses of 329 cents.<\/p>\n
South Africa<\/strong><\/p>\n MTN South Africa showed a positive turnaround in the second half of the year, benefiting from improved 3G and LTE network quality and aggressive sales of smartphones.<\/p>\n The operation\u2019s subscriber base increased by 0.6% to 30.8 million, driven by the pre-paid segment, which increased its base by 0.9% to 25.6 million.<\/p>\n The number of post-paid subscribers declined by 1.1% to 5.2 million, largely impacted by network quality challenges experienced, systems and customer service issues in the first Total revenue increased by 4.7% to R41.922 billion mainly as a result of device revenue. Service revenue, which excludes device revenue, increased by 1.9% for the period, driven by good growth in data revenue, MTN said.<\/p>\n Data revenue increased by 11.4%, contributing 34% to total revenue. The number of MTN South Africa\u2019s EBITDA margin declined, impacted by foreign exchange losses on the cost of devices, as well as an increase in the number of smartphones and the This was further impacted by costs related to the expansion of our 3G and LTE network and increased marketing costs. However, the operation reported a 5.4 pp improvement in EBITDA margin in the second half of 2016 versus the first half, MTN said.<\/p>\n Capex increased by 1.3% to R11.085 billion for the year, and retained a strong focus on 3G and LTE network investment. The operation rolled out 1,134 co-located 3G sites and 1,538 LTE sites.<\/p>\n Looking ahead, MTN said that despite the recent disruptions in the markets in which it “New revenue streams, particularly digital services, are expected to increase their contribution over the next 18 months, supported by a more focused approach and the process initiated to establish an advanced analytics unit.”<\/p>\n
\nhalf of 2016.<\/p>\n
\nsmartphones on the network increased by 15.3% to 10.5 million while the number of megabytes per user increased 46.7% for the period.<\/p>\n
\nchange in the device mix from 2G to 3G and LTE.<\/p>\n
\noperates, Africa is still expected to be a key growth region over the medium to long term.<\/p>\n
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