Wrap Text
Quarterly update for the period ended 30 September 2021
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(ISIN: ZAE000042164)
(MTN Group or MTN or the Group)
Quarterly update for the period ended 30 September 2021
MTN is a pan-African mobile operator with the strategic intent of ‘Leading digital solutions for Africa’s
progress’. We have 272 million customers in 20 markets and are inspired by our belief that everyone
deserves the benefits of a modern connected life.
Salient features
• Group service revenue up by 19.1%
o Group data revenue up by 34.5%
o Group fintech revenue up by 35.0%
• Group earnings before interest, tax, depreciation and amortisation (EBITDA) up by 24.1%
• Group EBITDA margin improved to 45.0% (from 42.9%)
• MTN South Africa service revenue up by 7.7%, with an EBITDA margin of 41.6% (from 39.3%)
• MTN Nigeria service revenue up by 23.5%, with an EBITDA margin of 52.6% (from 51.1%)
• Subscribers increased by 0.2 million to 271.9 million, impacted by new SIM
registration regulations in Nigeria (ex-Nigeria subscribers were up 1.6 million)
• Active data subscribers increased by 4.1 million to 119.0 million
• Active MTN Mobile Money (MoMo) customers increased by 2.2 million to 51.1 million
• MoMo value of transactions up by 67.2% YoY to US$175.5 billion
Unless otherwise stated, financial growth rates are presented on a constant currency basis and are year-on-year (YoY,
9M to September 2021 vs 9M to September 2020). Non-financial growth rates are presented as quarter-on-quarter
(QoQ, 3Q 21 vs 2Q 21). To enable like-for-like comparability, all growth rates for non-financials have been restated to
exclude MTN Syria, which was deconsolidated from 25 February2021.
Service revenue excludes device and SIM card revenue. Data revenue is mobile and fixed access data and excludes roaming and wholesale.
Fintech includes MoMo, insurance, airtime lending and e-commerce. Active data users is a count of all subscribers at a point in time which
had a revenue generating event in the specified period of time (90 days) prior to that point in time and also during the past 30 days had data
usage greater than or equal to 5 megabytes. MoMo users are 30-day active users.
Group President and CEO Ralph Mupita comments:
“The MTN Group recorded a solid Q3 2021 trading performance, tracking positively against our
medium-term targets with double-digit service revenue growth and the expansion of EBITDA margins.
This was delivered through solid commercial momentum and the ongoing execution of our Ambition
2025 strategy in challenging COVID-19 macroeconomic and trading conditions. Material progress was
made in executing on our asset realisation programme (ARP), ensuring the faster deleveraging of the
Group holding company (Holdco) balance sheet. The structural separations of the fintech and fibre
assets remain on track.
The Group has weathered a third wave of COVID-19 infections across our footprint. While the
economies in many of our markets have started to open up, we remain conscious of the ongoing
impacts and challenges that the pandemic presents. The sustained investment in our networks and
platforms, our disciplined capital allocation and strong market leadership has enabled us to continue
supporting the societies in which we operate. We remain well-positioned to drive faster digitalisation
and capture growth opportunities in our markets.
We continue to support our stakeholders through our Y’ello Hope and other initiatives, with our
ongoing COVID-19 response focused on four main areas: social; commercial; network and supply chain;
and funding and liquidity.
By 28 October 2021, we had recorded 3 432 COVID-19 infections and mourned the loss of 30 of our
staff. The health and safety of our people remains a clear priority. The rollout of vaccines across our
markets improved. By 28 October 2021, 1 612 (7.3%) of our staff had received at least one dose. We
continue to support vaccine rollouts across Africa as a rapid increase in the rate of vaccination is
essential for a return to normality both socially and economically.
MTN Group’s service revenue grew by 19.1% and EBITDA increased by 24.1%, with the EBITDA margin
expanding by 2.1pp to 45.0%, maintaining strong operating leverage supported by our expense
efficiency programme. The results were underpinned by strong operational execution and commercial
momentum, which helped to drive service revenue growth ahead of medium-term targets at our large
operations.
The Group delivered a solid operational and financial performance despite slower subscriber additions.
In the quarter we added 0.2 million subscribers to reach 271.9 million, adversely impacted by the
decline in subscribers in MTN Nigeria, which resulted from the revised registration regulations in
Nigeria. Excluding Nigeria, total subscribers were up by 1.6 million. As more of MTN’s enrolment
centres in Nigeria are certified for SIM registration in line with the current regulations, we expect
positive net additions to resume during Q4 2021.
Focused on driving our industry-leading connectivity business, we sustained voice revenue growth of
6.9%. Data revenue grew by 34.5%. It was supported by robust growth in data usage, up 52.6%, and a
4.1 million addition to active data users in the quarter to reach 119.0 million, as demand for work-
from-home services, digital entertainment as well as online education remained robust.
In driving our platform strategy, MoMo active monthly users grew by 22.3% YoY and the average
volume of transactions processed through our fintech platform was up 29.6% in Q3 YoY to 19 416 per
minute. The value of transactions increased by 67.2% YoY to US$175.5 billion. As we establish and scale
our payment platform, the number of active merchants accepting MoMo payments increased by 58.3%
YoY to 626 033 and the total value of MoMo merchant payments rose by 46.5% YoY to US$8.1 billion.
In Nigeria, we added over 234 000 agents to end the quarter with over 630 000 registered MoMo
agents. Fintech revenue rose by 35.0% YoY.
The total value of remittances grew by 68.0% YoY to US$1.6 billion in Q3; in addition, we facilitated a
total loan value of US$802.2 million, a 48.7% increase YoY. At the end of Q3, our InsurTech platform
had 14.8 million registered insurance policies, reflecting growth of 51.7% YoY.
We have made further progress in deleveraging our balance sheet faster. Group leverage was
comfortably within covenant limits, having remained flat at 0.6x. Holdco leverage remained within our
medium-term target, coming in at 1.2x, from 1.4x at 30 June 2021. Our progress in this regard has
been recognised by S&P Global Ratings, which upgraded our Group standalone credit rating to
investment grade on 22 October 2021. This is an especially pleasing development, being the Group’s
first investment grade rating from S&P since 2016.
We sustained our investment in our networks to build ‘second-to-none’ technology platforms,
deploying R18.1 billion of capex by Q3 2021.
Our ARP continued to advance. On 14 October 2021, IHS Towers listed on the New York Stock Exchange
(NYSE) at a listing price of US$21/share. The initial public offer (IPO) did not have a secondary sale and
the listing provides a liquidity platform to support our ARP over the medium-term. MTN Group’s
shareholding post the IPO and primary capital raise is now 25.8%.
In terms of further ARP progress, MTN South Africa (MTN SA) is well-advanced with a passive tower
infrastructure transaction, securing an “Opco-friendly” sale and lease back deal, subject to regulatory
approvals.
We announced the intention to float MTN Uganda shares on the Ugandan Securities Exchange (USE)
– and opened its IPO – in October 2021; aimed at giving Ugandans the opportunity to participate in
the growth and success of MTN Uganda. Over and above the ARP, this forms part of our important
work to create shared value in promoting increased local ownership across our markets.
Today we announce our intention to proceed with a public offer for sale of up to 575 million shares in
MTN Nigeria, by way of a bookbuild to institutional investors and fixed price to retail investors. The
offer is anticipated to open in November 2021 with a bookbuild to institutional investors, after which
a fixed price is expected to be announced for retail investors also in November 2021. The offer is
expected to close in December 2021. This is the first step in our previously communicated statement of
intent to sell down approximately 14% of MTN Group’s current shareholding in MTN Nigeria.
We are pleased with the strides that we have made in placing ESG at the core of everything that we
do. As MTN Group, we are humbled to be included by Fortune magazine in its 2021 ‘Change the World’
list, in recognition of the positive impact on society through activities that are part of our core business
strategy. MTN Group was also ranked among the ‘World’s Best Employers 2021’ – second among
telcos globally – in an independent survey spearheaded by Forbes. We are committed to changing the
world through meaningful contributions, not only to the communities across our markets, but to our
staff as well.
Our MSCI ESG rating was also upgraded during the period to ‘A’, from a rating of ‘BBB’ since 2017. This
was in recognition of the strides made in our governance practices, where our rating exceeds the
industry average and is in the highest scoring range relative to global peers.
Aligned with our commitment to achieve net-zero by 2040, MTN – through Business Ambition for 1.5’C
– has joined more than 2 000 businesses and institutions working with the Science Based Targets
initiative (SBTi) to reduce emissions in line with climate science and helping to halve global emissions
by 2030.
Looking ahead, we are focused on executing our Ambition 2025 strategy, driving growth, deleveraging
the Holdco balance sheet and unlocking value, while we navigate the impacts of the pandemic. Our
capex guidance for 2021 is R31.1 billion, with increases in spending driven by accelerated rollout in
MTN SA and MTN Nigeria to capture growth opportunities from explosive data traffic that we are
experiencing. We are committed to investing in the capacity and resilience of our networks as well as
scale our platforms to drive accelerated growth. We are guided by our capital allocation framework
and look forward to delivering improved returns to shareholders.”
The Group’s results are presented in line with the Group’s operational structure. This is South Africa, Nigeria, the Southern and East Africa
(SEA) region, the West and Central Africa (WECA) region and the Middle East and North Africa (MENA) region and their respective underlying
operations.
The SEA region includes Uganda, Zambia, Rwanda, South Sudan, Botswana (joint venture-equity accounted), eSwatini (joint venture-equity
accounted) and Business Group. The WECA region includes Ghana, Cameroon, Ivory Coast, Benin, Congo-Brazzaville, Liberia, Guinea Conakry
and Guinea Bissau. The MENA region includes Iran (joint venture-equity accounted), Syria (in prior financial numbers, deconsolidated from
25 February 2021), Sudan, Yemen, and Afghanistan.
In line with MTN Group’s strategy that was announced in March 2021, MTN Ghana results have been reported under the WECA region
effective 1 January 2021 (previously included in SEAGHA region). Prior year numbers have been restated for SEA and WECA accordingly.
MTN Syria results have been disclosed up to 25 February for 2021 and up to 31 December 2020, as a result of loss of control effective February
2021, following MTN Syria being placed under judicial guardianship.
COVID-19 pandemic impact on the business
Following a surge in infections earlier in the year, we are encouraged that the number of new COVID-
19 cases across Africa has started to slow down. Vaccinations are underway, with around 6.9% of
Africans having received at least one jab according to the Africa Centres for Disease Control and
Prevention (Africa CDC). We are encouraged by the progress in vaccine rollouts which should assist in
the recovery and acceleration of economic growth in our markets.
We continue to manage the COVID-19 effects through four focus areas, namely: social (our people,
communities and stakeholders); commercial (including our customers); network and supply chain;
and funding and liquidity.
Social
We continue to prioritise the wellbeing of our people through work-from-home measures as well as
strict protocols for those who are unable to work remotely. As of 28 October 2021, we had reported
3 432 COVID-19 infections and mourned the loss of 30 MTN employees across our markets. At our
South African headquarters, we established a vaccination centre in collaboration with a large hospital
group, where local staff and their families could get their COVID-19 jab.
As more vaccines become available and vaccination rates begin to increase across our markets, we
expect that government lockdown restrictions will continue to ease. In preparation for this shift, we
are pursuing a hybrid working policy, with a mix of on-site and work-from-home solutions, for staff.
We remain dedicated to safeguarding the wellbeing of our staff, customers and communities through
initiatives such as the MTN Global Staff Emergency Fund and various Y’ello Hope packages.
Commercial
Our key commercial metrics remained resilient in Q3 as we lapped the base effects from 2020. Overall
Group data traffic (including Iran) increased by 52.6% YoY, supported by large increases in MTN SA (up
57.2% YoY), MTN Nigeria (up 85.5 YoY) and MTN Ghana (up 52.2% YoY).
Group fintech transaction volumes in Q3 rose by 40.8% YoY and the value of fintech transactions in
US dollar terms was 67.2% higher. In some of our markets, MTN has continued to support customers
and drive increased adoption through the zero-rating of transaction fees for some services.
Network and supply chain
Safeguarding our network capacity and ensuring its resilience has been one of our ongoing priorities.
To facilitate increased demand, as of 30 September 2021, we had added 2 578 3G, 6 906 4G and
409 5G sites. In the quarter, the headroom on our core data networks, at peak utilisation, was
approximately 24% in South Africa, 30% in Nigeria and 44% in Ghana. Upgrades are underway in these
three markets, as well as others, ensuring that we are able to meet consumer and business demand.
Funding and liquidity
We continue to strengthen our balance sheet with a clear focus on actively managing liquidity and
debt maturities. We are committed to accelerating the deleveraging of the Holdco balance sheet and
optimising our debt mix, through solid operational performance and cashflow generation, cash
upstreaming, asset realisations and liability management.
As at 30 September 2021, Group net debt was R38.4 billion. Our net debt-to-EBITDA ratio was 0.6x,
well within our covenant of 2.5x. Our interest cover was 7.3x, comparing favourably with the covenant
limit of no less than 5.0x.
We sustained a healthy liquidity position at Holdco level at the end of September 2021, with Holdco
net debt of R33.9 billion (30 June 2021: R36.7 billion) and Holdco leverage at 1.2x (vs 1.4x on 30 June
2021). We are pleased that Holdco leverage continues to track well against our medium-term target
of 1.5x. The acceleration in the deleveraging of the Holdco balance sheet has been underpinned by
significant progress in cash upstreaming. During Q3, we upstreamed R4.6 billion from our operating
companies (Opcos) – including R2.3 billion from Nigeria – bringing the year-to-date total to
R13.9 billion. After the end of Q3, we received some further dividend flows from Nigeria.
We maintained our prudent approach to managing liquidity. On 30 September 2021, our Holdco
liquidity headroom stood at R53.9 billion – comprising R21.8 billion in cash (excluding the restricted
cash in Nigeria) and R32.1 billion in committed, undrawn credit facilities.
Our medium-term focus is to deleverage faster and to improve the funding mix at the Holdco level
through reducing our exposure to US dollar debt. Post the Q3 period-end, we announced an early
redemption of the US$500 million principal amount of 5.373% Guaranteed Notes due in February
2022. All the outstanding 2022 Notes were redeemed on 1 November 2021 for approximately
US$512.7 million (including interest of US$5.8 million); supporting our ambition to deleverage faster.
We remain focused on improving liquidity and optimising our funding mix. The September 2021 ratio
of non-rand to rand-denominated debt at the Holdco level stood at 47:53. On a pro-forma basis,
accounting the abovementioned early redemption of 2022 notes, the mix would shift to 39:61. This is
in line with our medium-term target of 40:60.
MTN South Africa
MTN SA continued to deliver a robust overall performance for the nine months to September 2021.
Service revenue growth was 7.7% YoY, with a resilient performance in Q3 where service revenue grew
4.7% YoY. This was largely anticipated as MTN SA laps the stronger base in the second half of 2021.
The performance continues to be driven by successful operational and commercial execution across
all business units, supporting 14.1% YoY growth in EBITDA and the EBITDA margin expanding by 2.3pp
to 41.6%.
All core business units – the consumer business unit (CBU) prepaid, CBU postpaid, enterprise business
unit (EBU) and wholesale – remained on positive growth trajectories; demonstrating solid
fundamentals embedded in the business in navigating the effects of COVID-19. The results were
achieved in a challenging macroeconomic environment with slow growth and increasing rates of
unemployment impacting consumer spend. As movement of people and the economy has opened up,
MTN SA has also experienced an increase in competition for consumer wallet share.
Total subscribers increased by about 849 000 in the quarter to 33.5 million, driven by strong
connections in prepaid subscribers, which were up by around 552 000 to 26.0 million. The growth was
further supported by an increase in 4G customers. The postpaid subscriber base (including internet of
things, IoT, connections) closed at 7.6 million, with about 300 000 subscribers added in the quarter,
aided by strong churn management but with some impact from store closures arising from the civil
unrest in July 2021.
MTN SA continued to work to make data more affordable, recording a 29.7% reduction in the effective
data tariff YoY. This led to increased data consumption: data traffic grew by 57.2% YoY and the number
of customers actively using the internet increased by 15.3% YoY to 17.0 million, yielding an overall YoY
increase in mobile data revenue of 11.8%. An active prepaid data subscriber now consumes an
average of approximately 2.5GB of data a month and an active postpaid data subscriber uses nearly
11.1GB per month.
The consumer prepaid business grew service revenue by 2.6% YoY, with growth in Q3 being flat YoY,
as the strong performance in data revenue was offset by pressure from voice substitution.
The consumer postpaid business sustained its performance with service revenue growth of 6.0% YoY
and 3.6% for Q3 YoY. This result was achieved in a highly competitive trading environment, the strong
data growth base effects in the prior year, and despite the challenges brought on by the civil unrest,
including the closure of numerous stores and the disruption to sales activities.
The enterprise business delivered solid service revenue growth of 14.7% YoY, and 15.9% for Q3 YoY,
maintaining eight consecutive quarters of strong growth.
At the end of March 2021, the National Treasury appointed MTN SA as a service provider to the
national government. This gives MTN SA an opportunity to compete and expand its service offerings
in the public sector, leveraging its strong network quality to offer innovative products and services in
support of the Government’s telecommunication requirements. The enterprise business also
continues to grow the customer base and revenue in the Small and Medium Enterprise as well as the
Large Enterprise segment.
Wholesale revenue increased by 52.8% YoY. This was driven by Cell C national roaming revenue as
well as strong growth in the MVNO portfolio. Revenue recognition remains on a cash basis as Cell C
works towards its recapitalisation. As at 30 September 2021, R307 million of Cell C national roaming
revenue remained unrecognised. MTN SA continues to invest in network capacity expansion to further
enable the sharing of our infrastructure.
MTN SA has concluded a new multi-year national roaming agreement with Telkom. Effective 1
November 2021, MTN SA will provide 2G, 3G and 4G services to Telkom. This agreement aligns with
the Group’s strategy to monetise the investments it has made in networks and continue to build on
the network as a service (NaaS) platform, where MTN SA is a key driver.
MTN SA grew EBITDA by 14.1% YoY and delivered an EBITDA margin of 41.6%, up by 2.3pp. This was
supported by the solid service revenue growth and execution of the expense efficiency programme in
the Opco.
Since its launch in South Africa last year, MoMo has progressed well, with approximately 3.9 million
registered users, with 30-day active subscribers exceeding 450 000 on 30 September 2021. The focus
remains on scaling the MoMo business and deepening financial inclusion by driving adoption as well
as innovative and relevant service offerings.
Our infrastructure investment over the years to extend coverage, improve network quality and
increase speeds has strengthened MTN’s position as Best Network in the country and in each major
metropolitan area (Johannesburg, Tshwane, Cape Town and Durban) according to the MyBroadband
network quality survey, as we continue to invest and expand in 5G.
MTN SA has substantially progressed with a year-long process to secure an "Opco-friendly" sale and
lease back transaction on which we anticipate updating the market with further details in
approximately the next week, with the transaction being subject to regulatory approvals.
We expect the transaction will incorporate around 5 700 of MTN SA’s 12 800 tower sites portfolio,
power provisioning to all 12 800 sites as well as accommodating national roaming and active sharing
arrangements. Maintaining a minimum 30% BBBEE ownership during the term of the contract period,
as well as alignment to meeting MTN SA scope 3 GHG emission targets are other key aspects of the
“Opco-friendly” transaction.
MTN Nigeria
MTN Nigeria delivered another strong performance in the period, notwithstanding a decline in
subscribers due to the ongoing implementation of SIM registration regulations. As more of MTN’s
enrolment centres in Nigeria are certified for SIM registration, we expect positive net additions to
resume during Q4 2021.
Service revenue grew by 23.5% YoY, exceeding the medium-term target of mid-teens percentage
growth. Data continued to drive revenue growth, supported by fintech, digital services and partly by
the lower base of voice revenue in the comparative 2020 period as a result of lockdowns.
Voice revenue grew by 10.2% YoY due to continued growth (9.6% YoY) in minutes of use by subscribers
and the success of customer value management (CVM) initiatives, offsetting the impact of the decline
in our subscriber base. In addition, following the resumption of SIM sales and activations in April 2021,
MTN Nigeria continue to ramp up the number of locations certified for customer acquisition to
accelerate gross connections, further supporting growth in voice revenue.
Data revenue rose by 51.3% YoY, maintaining an accelerated growth trajectory in Q3 on increased
data conversions from the existing base, underpinned by aggressive expansion of 4G site rollout and
enhanced network capacity to support increasing data traffic. Average MB per user rose by 58.2% YoY,
enabling overall data traffic growth of 85.5% YoY. Also, smartphone penetration on the network
increased by 3.5pp to 48.7%. MTN Nigeria’s 4G network now covers 69.2% of the population, up from
60.1% in December 2020.
Fintech revenue grew by 54.7% as customers continued to increase their use of Xtratime and broader
fintech services. The MoMo agent network continued to grow with the addition of over 234 000
registered agents in the nine months, bringing the total number to approximately 630 000. As a result,
transaction volume in the nine months rose by more than three times to 93.3 million, led by an active
subscriber base of 6.6 million, up 97.2% YoY. While we await the outcome of our payment service
bank (PSB) licence application, we continue to expand our MoMo operations and explore other
verticals to scale our fintech ecosystem.
Digital adoption continues to accelerate as customers use more digital products and services, a trend
accelerated by the effects of COVID-19. As a result, digital revenue grew by 82.3% YoY as the active
user base grew and penetration of our digital products deepened. The active user base rose by 295.6%
YoY to 5.8 million, led by instant messaging platform ayoba with approximately 2.9 million active
users.
The enterprise business’ solid performance was underpinned by an increased user base and the
uptake of enhanced services. As a result, service revenue from the enterprise business was up by 7.9%
YoY despite the impact of the non-recognition of the USSD revenue during the period. We are pleased
with the progress of the implementation of the new pricing framework for USSD services, which will
ensure that customers continue to access this service uninterrupted. In line with our Ambition 2025
strategy, the business is transitioning from products to enterprise platforms while leveraging core
mobile and fixed connectivity.
MTN Nigeria continued to make good progress with its expense efficiency programme. However, the
continued impact of naira depreciation on lease rental costs, acceleration in our site rollout and the
ongoing COVID-19-related expenditure resulted in operating expenses increasing by 24.2% YoY.
Despite this, the continued ability to drive operating leverage enabled EBITDA growth of 27.2% YoY
and the expansion of our EBITDA margin by 1.5pp to 52.6%.
Southern and East Africa (SEA) region
The SEA region continued to deliver solid results, demonstrating resilience in the quarter despite
sporadic lockdown restrictions. Most of the markets in the region delivered robust top-line growth,
yielding a do,uble-digit overall growth in service revenue of 25.3% (up 16.1% YoY in Q3).
The region’s performance was aided by strong growth in data revenue (up 39.1%) and a 0.3 million
QoQ increase in subscribers to 34.7 million. This was lifted by higher demand for data as more
customers continued to work from home. The expense efficiency programme implemented across the
region have supported the delivery of satisfactory EBITDA margins.
On 11 October 2021, MTN Uganda reached a milestone, officially opening the IPO offer of a 20% stake.
In the quarter, some of the service restriction orders that were implemented in January 2021 coupled
with the introduction of excise duty of 12% continued to place some pressure on data services. Despite
these restrictions, the operation delivered service revenue growth of 9.1% YoY, supported by growth
in voice revenue (up 6.7%), data revenue (up 13.1%) and fintech revenue (up 11.7%). The EBITDA
margin widened by 2.1pp to 51.7% through the delivery of expense efficiencies.
Despite the challenges of the ongoing pandemic, MTN Rwanda delivered a robust performance,
growing service revenue by 23.1% and recording solid QoQ growth. The EBITDA margin declined
slightly by 0.9pp to 50.3%, impacted by higher transmission costs and maintenance costs.
The SEA portfolio recorded a blended EBITDA margin of 47.4%, which increased by 0.8pp.
Our associate investment in Eswatini is fully operational with services full restored following the civil
protests that first started in the country in late June 2021.
West and Central Africa (WECA) region
The WECA region delivered service revenue growth of 18.0% YoY, supported by double-digit growth
in most markets in challenging trading conditions. The overall service revenue performance was
enabled by a 0.7 million QoQ increase in subscribers to 66.2 million, and healthy growth in data and
fintech revenue. Momentum in the expense efficiency programme continued, resulting in cost
optimisation that yielded an improvement in the overall blended EBITDA margin to 41.0%, up 1.7pp
across most markets.
In the quarter, MTN Ghana started to note positive signs of recovery in the local economy. Operational
performance was shaped by the sustained revenue growth in data (+51.6%), MoMo (43.7%), resulting
in service revenue growth of 25.4% YoY.
The operation maintained voice revenue growth (up 2.1%), as the contribution from data and MoMo
continued to increase. The strong data revenue growth was driven by the ongoing demand for data
with an increase of 4.2% in active data users and a 52.2% YoY increase in total data consumed within
the period.
Healthy fintech revenue growth of 43.7% was driven by an increase in MoMo users, higher person-to-
person (P2P) transactional activity and advanced services such as retail merchant payments,
insurance, and international remittances. The EBITDA margin for MTN Ghana increased by 1.1pp to
54.4%, as the operation continued to manage costs in line with the expense efficiency programme.
MTN Côte d'Ivoire’s transformation of sales and distribution together with ongoing marketing led to
service revenue growth of 12.7%, supported by growth in data (up 44.7%), fintech (up 21.0%) and
digital (up 17.5%). The work to accelerate users and improve segmented propositions resulted in voice
revenue coming back into marginal growth (up 0.1% YoY), following declines in the preceding two
quarters. The EBITDA margin increased by 1.2pp to 35.5%.
MTN Cameroon’s service revenue grew by 16.5%. This was supported by an increase in voice revenue
(+1.7%), data revenue (up by 33.0%) and fintech revenue (up 42.7%) which benefited from the launch
of the MoMo Pay campaign, device promotion as well as an acceleration in the number of high-value
customers. The EBITDA margin was lifted by expense efficiencies, expanding by 3.4pp to 36.3%.
Excluding MTN Ghana, the WECA markets grew service revenue by 13.7% and grew 15.0% YoY in Q3,
while delivering a 1.3pp improvement in the EBITDA margin to 32.4%.
Middle East and North Africa (MENA) region
The MENA region continued to perform well, with double-digit service revenue growth of 43.3% YoY,
reflecting resilience in a tough operating environment. This result was supported by strong growth in
data revenue. Total subscribers (excluding MTN Irancell) decreased by 0.4 million in the quarter to
20.3 million.
MTN Sudan increased service revenue by 269.0% YoY, underpinned by growth in voice (up 272.5%)
and data (up 291.6%). The EBITDA margin expanded by 8.1pp to 47.1% despite the material
devaluation of the official exchange rate in the country due to a deterioration of the economic
situation and cost increases.
The consolidated MENA portfolio recorded service revenue growth of 43.3% YoY and grew 49.4% YoY
in Q3, with a blended EBITDA margin of 30.6%, which was up by 0.5pp.
MTN Irancell, our equity-accounted joint venture, delivered good results in a challenging operating
environment. Service revenue grew by 34.9%, supported by the solid performance of data revenue
with active data subscribers growing 0.2 million to 49.6 million. The EBITDA margin widened by 1.9pp
to 39.3%.
Iran Internet Group (IIG) continued its strong recovery in the first nine months of 2021. Ride-hailing
app Snapp remained the market leader, ranking among the top ride-hailing apps globally and reaching
2.5 million daily rides. Food delivery app Snappfood grew revenue by 230% YoY; it continued to lead
the market to reach almost 200 000 daily orders. Last-mile delivery service Snappbox also remained
the market leader with over 200 000 daily orders.
Portfolio optimisation and asset realisation programme (ARP)
We continued to work on accelerating our portfolio transformation and ARP.
IHS Towers listed on the NYSE and started trading on 14 October 2021. IHS Towers concluded its IPO
of 18 million ordinary shares at a public offering price of US$21.00 per share. MTN now holds 85 176
719 ordinary shares of from IHS Towers, which remains key to our ARP.
As noted, MTN SA is at an advanced stage towards finalising a passive tower infrastructure transaction,
securing an “Opco-friendly” deal. The transaction is subject to regulatory approvals.
In October 2021, we announced the IPO of MTN Uganda on the USE, which opened on 11 October
2021 and will run until 22 November 2021. The IPO is for the sale of 4.5 billion shares (20% of MTN
Uganda) at a public offering price of UGX200.
Today we announce our intention to proceed with a public offer for sale of up to 575 million shares in
MTN Nigeria, by way of a bookbuild to institutional investors and fixed price to retail investors. The
offer is anticipated to open in November 2021 with a bookbuild to institutional investors, after which
a fixed price is expected to be announced for retail investors also in November 2021. The offer is
expected to close in December 2021.
In August 2021, we announced that we had exited Syria by abandoning the operation given the
regulatory actions and demands that made operating there untenable. We continue to explore
options to exit Yemen and Afghanistan in an orderly manner, in line with our focus on pan-Africa.
Update on significant regulatory and legal considerations
SIM registration in Nigeria
In December 2020, the Nigerian Communications Commission (NCC) suspended the sale and
activation of new SIMs for all operators in Nigeria, directing them to update SIM registration records
with national identification numbers (NINs) for every SIM connected to networks in the country. The
NCC has extended the deadline to complete this process numerous times.
The Nigerian Federal Ministry of Communications & Digital Economy completed a general policy for
the communications sector in the country and, on 19 April 2021, the suspension on issuing new SIMs
and various other activities was lifted subject to adherence with the regulator’s stipulated guidelines.
MTN Nigeria has made good progress, with more than 39.0 million subscribers having submitted their
NINs by 28 October 2021, representing approximately 57% of the subscriber base and 67% of service
revenue. We continue to actively support the Federal Government’s NIN enrollment programme,
having deployed more than 1 700 points of enrolment across the country.
The current deadline for NIN registrations is the end of 2021, extended from the previous deadline of
31 October 2021.
MTN Nigeria licence renewal
On 8 September 2021, MTN Nigeria received a formal notification from the NCC regarding the renewal
of its Unified Access Service licence and spectrum licence for wireless local loop in the 900Mhz and
1800Mhz band, subject to licence conditions, including an additional amount under discussion. The
licences expired on 31 August 2021 and have been renewed for a further ten-year period, commencing
on 1 September 2021.
Spectrum allocation and auction in South Africa
The planned auction of broadband spectrum in South Africa has been put on hold due to the pending
litigation. The Independent Communications Authority of South Africa (ICASA) has resolved to set
aside its decision to publish the Invitations to Apply (ITAs) to avoid a long-drawn-out litigation.
On 30 August 2021, ICASA also resolved that the temporary radio frequency spectrum that was
allocated to licensees at the start of COVID-19 lockdowns should be returned to the regulator by 30
November 2021. In mid-October, MTN SA filed papers in the Pretoria High Court opposing ICASA’s
decision to return the temporary spectrum allocated to the industry by the regulator. MTN SA also
launched papers in support of Telkom’s application against the regulator, relating to the return of the
temporary spectrum and the temporary spectrum pooling concessions that were granted by ICASA,
to the mobile operators.
The temporary frequencies assigned to, and paid for by, operators have been critical in meeting the
data traffic surge brought about by the pandemic. Since the start of the pandemic, the demand for
data on MTN SA’s network has increased by 165% and that demand is not abating, despite the
decrease of COVID-19 infection numbers.
The court date on the temporary spectrum matter has been set for 15 and 16 November 2021. MTN
SA remains open to opportunities to resolve the matter out of court in a constructive manner.
Outlook
We remain encouraged by the resilience of the business and are pleased with the performance that
was delivered across our markets for the nine months to September 2021. Service revenue is tracking
favourably against our medium-term guidance and EBITDA margins continue to expand, benefiting
from our expense efficiency programme.
With regards to our expense efficiency programme, we are working with Microsoft and Google on
taking over 80% of our network and IT workloads overtime, into the cloud. After Q1 2022, we will
provide updates on the outcomes of this work and the benefits we expect to realise from the
virtualisation of our workloads over time.
In South Africa, rising unemployment is a concern and may impact growth from prepaid customers in
the lower-income segment in the near-term, if measures such as the temporary employee relief
scheme (TERS) benefit are withdrawn. With the economy opening up and some prepaid customers
now travelling to work, there is competition for share of wallet from other spend categories.
We continue to note of the planned recapitalisation of Cell C and are encouraged by the new Telkom
national roaming deal that should provide further growth in our wholesale business over the medium-
term. We remain very focused on a solution on the temporary spectrum and on ensuring we can
continue to deliver world-class connectivity services to all South Africans through the COVID-19
infection waves that may lie ahead.
In Nigeria, shutdowns related to security concerns in most of the northern states have had some
impact on subscriber net additions and service revenue. If these shutdowns continue, we may
experience softer growth in Q4 2021 in these regions. We welcome the extension of the NIN
registration deadline, and MTN Nigeria will continue with accelerated efforts to register all its
subscribers by the end of December 2021. Data growth in Nigeria has accelerated strongly, and we
will invest accordingly to capture this growth, particularly in 4G, and 5G when the relevant spectrum
frequencies have been secured.
Our work to structurally separate our fintech and fibre businesses is on track. We aim to have a clear
operational and resourcing focus to accelerate growth while allowing the entities to leverage the MTN
base, brand, network and footprint. The separated operations will remain controlled by the Group but
will be better able to engage value-adding partnerships to scale and accelerate their growth as well as
reveal the value held within the Group.
Africa continues to contend with the unprecedented impacts of COVID-19, however economic activity
is picking up with less-stringent lockdown restrictions resulting in more consumer spend. The
pandemic continues to highlight the vital importance of telecommunications as people rely on these
services for information and to work, learn and entertain from home, as well as growing e-commerce
activities across the markets. We are well positioned as MTN to deliver these services and will invest
in line with our capital allocation framework to capture these growth and return opportunities.
The capacity and resilience of our networks and technology platforms remain key to deliver
sustainable growth across our operations. In support of this objective, we have increased our guidance
on capex to approximately R31.1 billion for 2021, to reflect accelerated planned capex in SA and
Nigeria as data growth continues to expand and we remain focused on having ‘second-to-none’
networks and platforms.
Management update
We are pleased to announce the contract extension of MTN Group Chief Operating Officer, Jens
Schulte-Bockum, from March 2022 to March 2024. This extension provides important management
continuity and execution capacity as the Group delivers on its Ambition 2025 strategy.
Certain information presented in this quarterly update constitutes pro forma financial information. The responsibility for preparing and
presenting the pro forma financial information and for the completeness and accuracy of the pro forma financial information is that of the
directors of MTN. This is presented for illustrative purposes only. Because of its nature, the pro forma financial information may not fairly
present MTN’s financial position, changes in equity, and results of operations or cash flows. It has not been audited or reviewed or otherwise
reported on by our external joint auditors.
The financial information on which this quarterly update is based, including constant currency information, has not been reviewed and
reported on by MTN’s external auditors. Constant currency information has been presented to remove the impact of movement in currency
rates on the Group’s results and has been calculated by translating the prior financial reporting period’s results at the current period’s average
rates. The measurement has been performed for each of the Group’s currencies, materially being that of the US dollar and Nigerian naira.
The constant currency growth percentage has been calculated based on the prior period constant currency results compared to the current
interim results. In addition, in respect of MTN Irancell, MTN Sudan, MTN South Sudan and MTN Syria, the constant currency information has
been prepared excluding the impact of hyperinflation. The economies of Sudan, South Sudan, Iran and Syria were assessed to be
hyperinflationary for the period under review and hyperinflation accounting was applied. Hyperinflation accounting was applied to MTN
Syria until loss of control by the Group.
This quarterly update may contain forward-looking information. Any forecast information on which the quarterly update may be based has
not been or reported on by the Group’s external auditors.
The full financial results are available on the MTN’s website at:
https://www.mtn.com/investors/financial-reporting/quarterly-trading-update/
Abbreviations:
SIM: Subscriber Identity/Identification Module
ESG: Environment, Social and Governance
MSCI: Morgan Stanley Capital International
Business Group: Consist of internet service providers in Nambia, Kenya and Botswana
GHG: Greenhouse gas
BBBEE: Broad-based Black Economic Empowerment
MVNO: Mobile virtual network operator
USSD: Unstructured Supplementary Service Data
Fairland
04 November 2021
Lead sponsor
JP Morgan Equities South Africa Proprietary Limited
Joint sponsor
Tamela Holdings Proprietary Limited
Date: 04-11-2021 07:05:00
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