MTN Group Lim ited MTN Group Lim ited Reviewed interim results f - PowerPoint PPT Presentation

MTN Group Lim ited MTN Group Lim ited Reviewed interim results f for six months ended 30 June 2010 i th d d 30 J 2010

Agenda Agenda Strategic and operational overview d l Phuthuma Nhleko Group President and CEO Financial overview Nazir Patel Group Finance Director Looking ahead Phuthuma Nhleko Group President and CEO 2

Strategic and operational overview Strategic and operational overview Phuthuma Nhleko G Group President and CEO P id t d CEO

MTN vision MTN vision To be the leader in telecommunications in emerging markets T b th l d i t l i ti i i k t Convergence Leverage existing Leverage existing Consolidation & footprint & footprint & footprint & footprint & & operational & operational diversification diversification intellectual capacity intellectual capacity evolution Increased competitiveness Hub and Hub and Hub and Hub and Procurem ent Procurem ent Procurem ent Procurem ent Skills Skills Skills Skills Value Value Value Value Best practice Best practice Diversification Diversification Brand Brand cluster cluster synergies synergies optim isation optim isation proposition proposition Execution excellence Execution excellence Execution excellence Execution excellence 4

Operational framework Operational framework I Quality L service N A A T Brand Efficient N preference distribution E E R R Custom er Custom er R experience experience E N N T Products and A value added Segm entation X services L E Experienced people 5

Group highlights Group highlights Group subscribers EBI TDA m argin Up 11 4% to Up 11,4% to Up 0 5% points to Up 0,5% points to 129,2 million 43,3% Adjusted headline EPS Maiden interim dividend Up 20 6% to Up 20,6% to per share of per share of 438,6 cents 151 cents Free cash flow up 164% to R6.8 billion 6

Subscriber contribution by region Subscriber contribution by region MTN Group Total Proportionate* (subscriber million) (subscriber million) (subscriber million) (subscriber million) 9 7 ,7 1 2 9 .2 8 8 .5 1 1 6 .0 7 0 .4 9 0 .7 3 2 % 3 2 % 2 9 % 2 3 % 2 6 % 2 6 % 4 4 % 4 5 % 4 6 % 4 5 % 4 7 % 4 8 % 2 7 % 2 7 % 2 3 % 2 3 % 2 2 % 2 2 % 3 2 % 3 2 % 2 7 % 2 7 % 2 6 % 2 6 % Dec-0 8 Dec-0 9 Jun-1 0 Dec-0 8 Dec-0 9 Jun-1 0 SEA WECA MENA * Based on shareholding Increased diversification 7

Revenue and EBITDA by region Revenue and EBITDA by region Contribution* Contribution* EBI TDA m argin% (Revenue) (Revenue) (EBITDA) (EBITDA) 43.3% Group 42.8% 42.8% 36.6% 29.2% 34.5% SEA SEA SEA 33.9% 25.7% 32.1% 44.2% 55.2% 54.5% WECA WECA WECA WECA WECA WECA 46.7% 60.3% 55.5% 19.0% 13.7% 31.3% MENA MENA MENA 19.3% 12.0% 26.1% Jun-10 Jun-09 * Difference in Head Office Improved margins in SA and Irancell 8

Nigeria Nigeria - operational highlights operational highlights Launched Aug 2001 Market share 51% Population 150m Market sizing 111m (2014) Penetration 45.8% Shareholding 76% * • Increased market share • Increased market share Subscribers ( 000) Subscribers (‘000) / ARPU ($) 3 5 ,0 5 7 • Quality of service 3 0 ,8 2 7 • Segmental value propositions 2 3 ,0 7 7 1 6 ,5 1 1 • Effective distribution MTN Subscribers • LC ARPU declined 10% (Dec 09) 1 7 1 6 1 1 1 2 ( '0 0 0 ) ARPU ( USD) Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 • Reduction in interconnect affected ARPU Outgoing MOU 5 2 5 5 5 3 4 9 • Marginal ARPU of $7 Marginal ARPU of $7 Net additions Net additions (’000) • SIM registration implemented 7 ,7 5 0 1 May 10 6 ,5 6 6 3 4 8 9 3 ,4 8 9 4 ,2 3 0 4 ,2 3 0 4 ,5 1 2 2 ,4 7 5 4 ,2 6 1 4 ,2 3 0 H2 H2 H1 H1 2 ,0 5 4 1 ,7 5 5 Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 * Legal 9

Nigeria Nigeria - infrastructure and data highlights infrastructure and data highlights • Maintained quality and capacity on Capex ZAR (million) ZAR (million) network t k 1 0 2 2 2 1 0 ,2 2 2 9 ,6 1 0 • 279 3G BTS’s rolled out 4 ,5 1 9 5 ,6 6 8 4 ,7 8 9 • Rollout to pick up in H2 2 ,5 3 2 2 ,9 7 9 5 ,7 0 3 3 ,9 4 2 H2 H1 • Transmission expansion 2 ,5 3 2 1 ,8 1 0 Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 • Further 694 km of backbone deployed (Maiduguri-Yola-Gombe) Capex as % of 2 3 .6 3 0 .5 3 0 .7 1 5 .4 revenue • 45 km of Port Harcourt metro fibre BTS Rollout BTS Rollout 1 ,5 6 0 • Launched Wimax trial in 3 states 1 ,2 2 0 • Increased BlackBerry subscribers 8 0 2 7 8 5 7 2 6 • Data as a % of revenue 4,2% * 6 5 2 6 3 9 7 5 8 6 5 2 6 5 2 4 9 4 H2 H1 1 4 6 Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 10 * Including 3G

South Africa South Africa - operational highlights operational highlights Launched Jun 1994 Market share 36% Population 49.4m Market sizing 58m (2014) Penetration 97% Shareholding 100% • Market share recovery to 36% • Market share recovery to 36% Subscribers Subscribers (’000) • Driven by prepaid segment & market 1 7 ,1 6 9 1 7 ,1 0 2 1 6 ,0 6 7 clean up post RICA implementation 1 4 ,7 9 9 • Attractive value propositions • Attractive value propositions 1 3 ,8 9 6 1 4 ,4 1 5 1 3 ,0 4 4 • Marginal postpaid growth 1 2 ,3 0 6 • Hybrid packages Prepaid 3 ,2 0 6 3 ,0 2 3 Postpaid 2 ,7 5 4 2 ,4 9 3 • Stricter credit policy Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 • Stable network and billing systems Net additions Net additions • Improved distribution capacity I d di ib i i (’000) 2 ,3 7 0 2 ,1 4 4 • Brand preference 1 ,5 7 9 1 ,1 9 8 1 ,0 3 5 • Ayoba campaign y p g 9 4 6 • Decreased churn 7 9 1 6 2 H2 H1 • 2010 FIFA World Cup -1 ,1 6 4 -1 ,1 0 2 Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 11

South Africa South Africa - operational highlights operational highlights • Increased prepaid ARPU ARPU ZAR ZAR • Increase in data revenue 4 0 3 3 9 6 3 6 5 • Declining postpaid ARPU indicating 3 3 6 slowing consumer spend • Lower out of bundle usage 1 5 2 1 4 9 1 4 8 1 4 5 Postpaid p • Migration onto lower value packages Mi i l l k Blended 1 0 9 1 0 0 9 7 9 2 • Mobile termination rates Prepaid Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 • Constructive engagement with ICASA C i i h ICASA regarding further cuts Avg. total MOU com prises both 1 0 6 1 0 2 1 0 0 1 1 0 incom ing and outgoing m inutes Outgoing MOU 6 5 6 4 6 4 7 2 12

South Africa South Africa - infrastructure and data highlights infrastructure and data highlights • 140 2G and 108 3G BTS’s added Capex 6 ,0 3 4 ZAR (million) ZAR (million) 4 ,8 6 8 • 2G rural coverage 3 ,0 3 4 • Increased capacity on 3G 2 ,8 4 3 3 ,0 9 6 • 99% 2G and 48% 3G population coverage • 99% 2G and 48% 3G population coverage 1 5 4 9 1 ,5 4 9 3 ,0 0 0 1 ,0 1 4 H2 H1 1 ,7 7 2 • Rollout to pickup in H2 1 ,2 9 4 1 ,0 1 4 Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 • Fibre deployment p y Capex as % of 1 0 .1 1 5 .0 1 8 .2 5 .9 • Ongoing deployment of national long revenue distance (440km on Durban to Johannesburg route trenched) 4 ,4 9 6 Data revenue Data revenue • Gauteng northern ring and southern ring ZAR (million) 3 ,5 9 6 completed (220km) 2 ,9 1 9 2 ,4 4 4 2 ,7 5 6 • Data gaining momentum 1 ,9 0 0 1 ,5 3 5 1 5 3 5 • 49% increase in data usage since Dec 09 2 ,9 1 9 H2 H1 2 ,0 5 2 1 ,6 9 6 1 ,2 2 1 • Business Solutions revenue increased 13% , despite challenging trading 13% despite challenging trading Dec-0 7 Dec 0 7 Dec 0 8 Dec-0 8 Dec-0 9 Dec 0 9 Jun 1 0 Jun-1 0 conditions As % of SA revenue ( excl. Handsets, 1 1 .0 1 2 .4 1 4 .8 1 8 .6 incl. SMS) 13

Ghana Ghana - operational highlights operational highlights Launched Nov 1996 Market share 56% Population 24m Market sizing 22.5m (2014) Penetration 65% Shareholding 98% • Increased subs 9% (Dec 09) • Increased subs 9% (Dec 09) Subscribers ( 000) Subscribers (‘000) / ARPU ($) 8 ,7 2 3 • MTN Zone 8 ,0 0 1 6 ,4 2 8 • FIFA related promotions • FIFA related promotions 4 ,0 1 6 • Quality of networks MTN 1 4 1 2 Subscribers 8 7 ( '0 0 0 ) • Increased market share in • Increased market share in ARPU ( USD) Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 competitive market Outgoing MOU 1 0 4 1 1 9 1 0 5 1 1 3 • Effective distribution Net additions Net additions (’000) 2 ,4 1 2 • LC ARPU declined 8% (Dec 09) • SIM registration implemented 1 ,5 7 3 1 ,4 3 1 , 3 1 Jul 10 1 ,4 3 1 7 8 2 6 2 4 • 40% of base registered to date 7 2 2 9 8 1 9 8 1 8 0 7 7 9 1 H2 H1 7 2 2 Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 14

Ghana Ghana - infrastructure and data highlights infrastructure and data highlights 2 ,5 8 6 • Mantained network quality Capex ZAR (million) ZAR (million) 1 ,8 5 4 • 133 3G BTS’s added 1 ,4 1 1 1 ,4 0 4 1 ,2 3 9 9 3 8 • Rollout slower than expected • Rollout slower than expected 9 7 7 1 ,4 0 4 1 ,1 7 5 8 4 0 • Challenges obtaining new sites, ban 2 6 2 H2 H1 lifted since Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 • Data usage gaining momentum Capex as % of 3 2 .8 3 0 .7 4 5 .6 4 9 .9 revenue • Traffic increased 45% since Dec 09 • Traffic increased 45% since Dec 09 BTS Rollout BTS Rollout 7 2 9 7 2 9 7 1 8 7 0 4 • 757 Mobile Money subs (Jun 10) 2 2 1 3 0 2 4 4 0 • Data as a % of revenue 7,3% 2 3 7 4 8 3 3 2 8 2 8 9 2 8 9 2 3 7 2 3 7 H2 H1 Dec-0 7 Dec-0 8 Dec-0 9 Jun-1 0 15