Mtn Group Limited · JSE:MTN
Mtn — Investor Presentation (2006)
30 slides from Mtn's investor presentation, 2006
Slide 1: MTN Nigeria
MTN Nigeria Ahmad Farroukh CEO
Slide 2: Agenda
Agenda 1.Country overview 2.Telecommunications environment – History – Competitors – Regulation 3.MTN Nigeria – Licence terms – Shareholder structure – Operational structure – Operating environment • Subscriber and ARPU history • Market sizing • Infrastructure • Distribution • Products – Key financi
Slide 3: Country overview: Nigeria
Country overview: Nigeria MTN Investcom Special Projects & Middle East North West and and East Africa Central Africa MTN Inv Total Countries 11 10 21 Population (m) 341 147 488 Subscribers (m) 25.4 6.1 31.5 Southern Africa 3
Slide 4: Population density and MTNN coverage of Nigeria
POPULATION DENSITY AND MTNN COVERAGE OF NIGERIA Taiwo Alaka (GIS Specialist) LEGEND Roads [| State Coverage Population Density 80,000te 60,000 (1) 40,000 te 60,000 (3 20,000 te 40,000 (Sy 4,000 to 20,000 (34y soot 1,000 (5) s00te “900 cit) 7OOto 800 cto) so0te 700 20) so0to 800 (20) 4oote 500 cat) s
Slide 5: Country overview 2006: Nigeria
Country overview 2006: Nigeria Economics • 6.2% Growth GDP per Capita • N110,766 (US$860) Inflation • YoY consumer price inflation (moving average) of 6.3% in September 06 • N128.40k v $1 (Closing Sept. 06) Currency • The Naira has strengthened over the last 2 years Local rates • MRR = 14% and T-bil
Slide 6: Telecommunication Environment - History
Telecommunication Environment - History 1992 • Enactment of the Nigeria Communications Commission Act establishing the Nigerian Communications Commission to regulate the telecoms industry • NITEL – state monopoly incumbent – 1 telephone to 440 people 1993 • NCC inaugurated - starts issuing licences
Slide 7: Telecommunications Environment: Regulation and Market Structure
Telecommunications Environment: Regulation and Market Structure Regulatory structure Market structure • Nigerian Communications Commission • 1st national carrier (NITEL) is being set (NCC) is the sector regulator – for privatisation managed by a board of seven • 2nd national carrier (Globacom) is co
Slide 8: Competition – Celtel
Telecommunications Environment: Competition – Sept 06 Celtel Operating date - 2001 as Econet Wireless - rebranded to Vodacom in Feb 2004 - rebranded to V mobile in July 2004 - In Q2-2006 acquired by MTC/Celtel with launch of Celtel brand in September 2006 Subscriber (estimate) 5.993m Suppliers Motor
Slide 9: Competition – Globacom
Telecommunications Environment: Competition – Sept 06 Globacom Operating date - August 2003 - Second National Carrier from 2003 Subscriber (estimate) 6.400m Suppliers Alcatel, Siemens Coverage 563 Towns Shareholders 100% Local shareholdings Source: Subscriber & Coverage – MTN Marketing Estimate 9
Slide 10: Competition – Mtel
Telecommunications Environment: Competition – Sept 06 Mtel Operating date - Licensed in February 2001 but became operational in March 2002 Subscriber (estimate) 0.534m Suppliers Motorola, ZTE and Ericssion Coverage 144 Towns Shareholders Formerly owned by NITEL/Federal Government. Now Transcorp (75%
Slide 11: Competition – Nitel
Telecommunications Environment: Competition – Sept 06 Nitel Operating date Established in Dec. 1984 and began operations in Jan. 1985 Subscriber (estimate) 0.439m Suppliers Siemens, Huawei, Ericssion Coverage Nationwide Shareholders Formerly owned by NITEL/Federal Government. Now Transcorp (75% hold
Slide 12: Competition – PTO
Telecommunications Environment: Competition – Sept 06 PTO Operating date A number of PTO’s commercial in Nigeria with biggest Starcomms / Multilinks / Intercellular / etc Subscriber (estimate) 1.124m Suppliers Huawei, Motorola, Nortel Coverage Depended on PTO’s license (national / regional license)
Slide 13: License, Shareholding and Operational Structure
MTN Nigeria: License, Shareholding and Operational Structure MTN International – 82% Ownership Nigerian Partners - 15% IFC – 3% Licensed: February 9, 2001 Operational dates Operational: August 8, 2001 Capital Investment Total Amount: Just under N400 billion Digital Microwave Transmission (Y’elloBahn
Slide 14: Operational structure
MTN Nigeria: Operational structure 14
Slide 15: Subscribers and ARPU History
MTN Nigeria: Subscribers and ARPU History Subscribers/ARPU • Commentary Subscribers v Av. ARPU 12 10 10 N 9,362 N7,519 N6,936 8 • As at Sept 06, MTNN has 10.376m 8 N5,163 subscribers with a YTD ARPU of Th o u sa n d s 6 M illio n s 6 Subscribers N2,372 (US$18) 4 Av. ARPU N2,843 N2,395 N2,364 N2,356
Slide 16: Infrastructure
MTN Nigeria: Infrastructure Commentary • 2, 426 BTS’s (at Sept 06 – incl 28 mobile sites) and 41 MSC’s • Geographic area = 534, 013 sqkm, 85% of landmass covered • Local governments covered = 578 of 777 • Population under coverage ~95m, ~70% of population • Completion of Y’elloBahn, the company’s di
Slide 17: Distribution
MTN Nigeria: Distribution Wholesale channel Retail channel • Registered distributors 167 from 230 • Service centres – MTN owned • Sub dealers 10,000 • Connect stores – third party owned • Sub sub dealers 30,000 • Retail points/hawkers 50,000 • Retail outlets focused on service delivery • Contributes
Slide 18: Distribution
MTN Nigeria: Distribution MTN Mapping Guu Service Connect Dealer Location Centres Stores Dealers Branches Kontagora West 7 7 120 250 East 3 13 60 155 North 2 8 46 73 Bida Jalingo Total 12 28 226 478 Suleja MTN Call Centre Other Service(s) MTN Nigeria SELFCARE Yes Distribution Locations IVR Yes E-Car
Slide 19: Product
MTN Nigeria: Product Commentary • On 22nd of September 2006, MTNN launched the Xtra Product Plans (Extraordinary Product Range) for both the contract and prepaid market – a value proposition targeted at 5 prepaid segments and 2 contract segment • Xtra Product Plans, effectively reduced average call
Slide 20: Key financial information
MTN Nigeria: Key financial information Income statement 6 months ended June Sep % change 2006 2005 [ZAR] million Revenue 6 395 5 870 9 EBITDA 3 590 3 063 17 EBITDA % 56% 52% 2 Profit after taxation 2 317 2 028 14 Commentary A focus on network rollout and cost saving initiatives resulted in strong ma
Slide 21: Key Financial Information – Tax holiday
MTN Nigeria: Key Financial Information – Tax holiday • MTN Nigeria awarded 5 year tax holiday Expected trends in effective tax rates through Pioneer Status effective 1 Apr 02 % • Considerations on expiry of Pioneer Status • Deferred tax asset: During tax holiday deferred tax asset accumulated, to be
Slide 22: Key Financial Information - Financing
MTN Nigeria: Key Financial Information - Financing (As at Sept. 06) Foreign Facilities Lender: Standard Corporate Merchant Bank (SCMB) Facility 1 Facility: N5.4 billion Term: Long term, biannual payments & linked to LIBOR Lender: International Finance Corporation (IFC) Facility 2 Facility: N7.9 bill
Slide 23: Opportunities and Challenges
MTN Nigeria: Opportunities and Challenges ☺ Opportunities Challenges • Unified licence presents corporate and • Continued network challenges in certain retail opportunities areas (eastern region) incl uptime, quality. • Transmission and backbone way ahead of • Infrastructure – Power, roads and secur
Slide 24: MTN Nigeria Foundation
MTN Nigeria Foundation OBJECTIVES: Health • To alleviate the health challenges facing the country through partnerships. • To contribute to the national awareness campaign on HIV/AIDS. Education • Bridging the knowledge and digital divide • Enhance educational infrastructure development • Provision o
Slide 25: MTN Foundation Projects - University of Lagos Reference Library
MTN Foundation Projects - The University of Lagos Reference Library – “Before” 25
Slide 26: MTN Foundation project - A Transformation
MTN Foundation project - “A Transformation” “Bridging the Knowledge and Digital Divide” The MTN Foundation UniversitiesConnect Library at the University of Lagos 26
Slide 27: MTN Foundation Projects - Provision of Shelter
MTN Foundation Projects -“Provision of Shelter” – A Prototype House MTN Foundation-Habitat for Humanity Low Cost Housing project New Karu, Nasarawa State. 27
Slide 28: MTN Foundation Projects - Empowering Women
MTN Foundation Projects - “Empowering Women” – Phone Ladies beneficiary of the MTN Foundation Rural Telephone Project in a rural community 28
Slide 29: Opportunities and Challenges
MTN Nigeria: Opportunities and Challenges Spill-over benefits of GSM: National spread and rural penetration: Mobile services available in all 36 States of the Federation, over 50% of LGAs and in at least 15,000 towns, communities and small villages Increased tele-access: average waiting time from 10
Slide 30: Thank you Questions?
Thank you Questions? 30