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All about MTN
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Our reporting suite
Navigating this report
About this report
Who we are and where we come from
Where we are going
Where we operate and how we perform
Views from our Chairman
Q&A with the President and CEO
Our market context
Investment case – a compelling African growth story
Creating and preserving value through our business model
Our outlook

How we create value
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Material matters impacting value creation
Social, Ethics and Sustainability Committee Chair’s review
Stakeholders with whom we partner to create value
Risk Management and Compliance Committee Chair’s review
How we manage risk
Top risks to value creation
Strategic and financial review
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Q&A with the CFO
Key financial tables
Operational performance summary
Audit Committee Chair’s review
Finance and Investment Committee Chair’s review
Our Ambition 2025 strategy
Our strategic performance dashboard
Our strategic performance

Governance and remuneration
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Directors Affairs and Governance Committee Chair’s review
Governance in support of value creation
Our Board of Directors
How the Board transformed our values into actions
Our Executive Committee
Remuneration Report
Independent assurance practitioner’s limited assurance report
Glossary
Administration

Q&A with the President and CEO

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MTN has remained resilient in a challenging macro-environment.
Our investment case is underpinned by structurally higher demand for our data and fintech services

Ralph Mupita
Group President and CEO

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The macroeconomic and geopolitical environment was especially volatile in 2023. How did this impact MTN?

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The macroeconomic environment was challenging in 2023. There are a few factors worth highlighting in this regard - particularly devaluation of the naira against the US dollar, which was the strongest headwind to our business. Despite these effects, we are encouraged by the solid underlying operational momentum and momentum of the business, as well as progress in key strategic initiatives. We believe we are well positioned to continue delivering on our growth ambitions over the medium term.

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The blended inflation rate across our markets remained elevated and averaging 16.7%, from 15.1% in 2022. This put pressure on our customers' spending power, which impacted demand for services. Higher inflation also directly impacted our business by increasing the cost of doing business, as well as higher interest rates - as central banks intervened to curb inflation - which increased our cost of debt (unpacked by the CFO on Q&A with the CFO). Encouragingly, we noted a peak in the inflation cycle in some of our markets, such as South Africa, Ghana and Uganda. We expect slowing inflation to be more supportive of our medium-term outlook.

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Compounding the effects of inflation, local currencies were volatile, with limited availability of hard currency, especially in Nigeria. In 2023, the US dollar appreciated by 97% against the naira, resulting in a closing rate of N907/$ at the end of the year (December 2022: N461/$) - as mentioned, this had the biggest impact on our business in the year. This followed the liberalisation of exchange rates in the country in June 2023 and had a material impact on our profit and loss and balance sheet. Despite the short-term volatility and effects we are seeing, we are optimistic that the structural policy changes being implemented in Nigeria will be positive for the country and our business in the medium to longer term. We also navigated a paucity of foreign exchange in some key markets, which made it more challenging to upstream dividends and management fees (refer to Q&A with the CFO).

From a geopolitical standpoint, we saw a rise in tensions globally and within the African continent. In addition to conflicts in Ukraine, the Middle East and parts of West Africa, the crisis in Sudan also deepened, and we extend our deepest sympathy to those impacted by the conflict there. From a business perspective, this precipitated fuel shortages, power outages and disruptions to network availability in Sudan.

In this context, how did MTN perform in 2023?

Subscribers increased by 2.0% to 294.8m

Active data subscribers increased by 9.3% to 149.7m

Data traffic increased by 26.3% to 14 737 petabytes.

MoMo monthly active users increased by 5.0% to 72.5m

Fintech transaction volumes increased by 32.2% to 17.6bn

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Notwithstanding the macro-volatility and challenges, MTN maintained a resilient performance in 2023, with solid underlying operating momentum. Despite the adverse effects of various SIM registration regulations, we expanded the customer base to 295 million across 19 markets.

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Amid sustained high demand for data and fintech services, we increased the number of active data subscribers by more than 9%^ to ~150 million - half the total subscriber base. Data traffic on MTN's networks, excluding JVs, grew by more than a third (or by just over a quarter, including JVs). Usage improved to more than 6.1GB per user per month (or 8.6GB including JVs). To sustain this growth, as well as network coverage and quality, we deployed capex (excluding leases) of R41 billion.

Active MoMo users increased by 5% to 72.5 million - a quarter of the total customer base. The volume of fintech transactions increased by around a third to 17.6 billion, with the value of transactions up 47.4%* to US$272 billion, driven by the growth of advanced services including payments, BankTech and remittance solutions.

MTN's financial performance is detailed by the CFO on Q&A with the CFO, but among the key highlights, Group service revenue grew by 13.5%* to R210.1 billion and EBITDA was up by 9.8%* to R90.5 billion.

^ Increased by 10.2% , excluding joint ventures.

Against the challenging macroenvironment, what were the main highlights from MTN’s execution of the Ambition 2025 strategy?

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Before delving into our broader strategic progress, it is worth highlighting the notable headway in 2023 made by MTN South Africa on its network resilience. As this was a key focus area of the business to improve network availability in the context of ongoing loadshedding in the country. By year-end, MTN SA had improved the availability of its network to 95% in even the higher stages of loadshedding, with availability up to around 98% on sites where resilience was implemented. We are pleased with this progress, which was ahead of schedule and supported an improvement in the Opco's operational performance in 2023.

In terms of our Group-wide strategic priorities more generally, these are detailed on Our strategic performance dashboard; and among the highlights in 2023 were progress in building the largest and most valuable platforms. In fintech, we are excited about the partnership agreements secured with Mastercard, particularly the commercial agreements, which we expect will support the accelerated growth of the business. Early in 2024, we concluded the definitive agreements for Mastercard to invest up to US$200 million for a minority equity stake in MTN Group Fintech at a valuation of US$5.2 billion.

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We also gained traction with the structural separation of the fibre business in 2023, with Bayobab, securing regulatory clearances and new fibre operating licences in markets like Uganda, Côte d'Ivoire and Central African Republic. Bayobab also acquired the fibre network of MTN Zambia in a sale-and-leaseback arrangement, while the work to progress Project East2West was commenced in partnership with infrastructure investment platform Africa50.

What was particularly pleasing in progressing our platform strategy was our ability to leverage partnerships to enable faster scaling of these growth drivers in line with our philosophy (partnerships for progress). We will continue to look for strategic partnerships to accelerate the execution of Ambition 2025.

In our priority to simplify and transform the portfolio, we finalised the sale of MTN Afghanistan, which completed the Group's planned exit of consolidated subsidiaries in the Middle East. We also accepted an unsolicited offer, subject to conditions precedent, including regulatory approvals for MTN's equity interests in MTN Guinea-Bissau and MTN Guinea-Conakry.

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We made good progress in advancing key sustainability initiatives and achieving our strategic priority to create shared value (see details on the next page). Overall we believe that the strides we continued to make in our strategy execution position the business well to weather the current volatility in the short term and deliver on our growth ambitions over the medium and long terms.

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MTN Group President and CEO Ralph Mupita receives the Corporate Social Responsibility Award on behalf of MTN at the Africa-America Institute’s 70th Anniversary Gala and Awards Ceremony on the margins of the 78th Session of the United Nations General Assembly in September 2023

You often speak of MTN’s responsibility to help create a sustainable, inclusive world. What progress did MTN make in this regard?

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As mentioned, creating shared value with ESG at the core is critical and is one of our four strategic priorities. On Views from our Chairman, the Chairman covers much of the progress in this regard in 2023, and I also direct readers to a more comprehensive review of our sustainability performance on Our strategic performance, including the improved scores with our focus ESG raters and rankers.

Doing for planet

In terms of our eco-responsibility priorities, we achieved a 13.1% absolute reduction in Scope 1 and 2 emissions in 2023. This is part of our environmental commitment to reach Net Zero emissions by 2040. We are also prioritising the reduction in Scope 3 emissions, with a fifth of our suppliers by expenditure already having committed to setting their own emission-reduction targets by 2026.

Doing for people

Diversity and inclusion are fundamental to MTN's values, and we continue to advance gender equality. In 2023, women represented 40% of our workforce, unchanged from 2022, but on track to meet our 2030 gender parity target. We also closely track women in leadership, which was 28% in 2023 vs our 2025 target of 30%, and women in technology, which at 24% in 2023 was ahead of our 2025 target of 21%. We remain focused on fostering an environment where women are meaningfully supported to thrive, grow and contribute to our collective success.

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We are dedicated to advancing internet access in rural and remote areas to promote digital and financial inclusion. In 2023, we achieved broadband coverage of 89.2% (2022: 87.8%) against a target of 95% by 2025. This brought connectivity to an additional 8.4 million people in 2023 by deploying 6 600 sites in rural areas. Our social and economic contribution of approximately R159 billion in 2023 made a meaningful impact on lives and livelihoods in our markets. In aligning with national and continental priorities in the year, we invested more than R195 million in corporate social investment (CSI) programmes across communities in our host nations. Our flagship initiative is the MTN Skills Academy, which empowers individuals in eight markets to participate in their economies as producers, consumers and innovators in digital technologies.

Doing it right

In 2023, we once again exceeded our target for reputation, with a score of 79.5% in our annual Reputation Index Survey of stakeholders. This is above our target of 75% and outstrips most international reputation index benchmarks. To support the widespread adoption of the new IFRS S1 and S2 investor-focused standards of the International Sustainability Standards Board, MTN Group has pledged to begin adopting these standards. We see this as an opportunity to understand our sustainability-related risks and opportunities better and to streamline our sustainability reporting processes to meet the needs of our stakeholders.

What are MTN’s key focus areas ahead?

Our operating context - detailed on Our market context - is expected to remain challenging and uncertain in the short term. As noted, we are starting to see inflation subside in key markets, which we believe will benefit the business. In addition, we believe the structural policy interventions implemented in Nigeria bode well for medium to longer-term stability and growth of that country. In this context, we are encouraged by the resilience of our business to navigate the current macro-volatility and will continue to execute our commercial and strategic initiatives. To further safeguard our medium- and long-term prospects, we are focused on some key priorities that underpin the execution of our growth outlook and strategy.

MTN SA will focus on completing its network resilience programme in the short term to sustain improved network availability and quality that underpins the momentum we saw in 2023 and the medium-term recovery of the business. The Opco will, thus, explore avenues to drive further resilience and power efficiencies in its network. We will focus on commercial initiatives in MTN SA to drive growth, including sustaining prepaid momentum and acceleration of the device strategy to support our data ambitions. While we expect the latter to temporarily slow the recovery profile of MTN SA's EBITDA margin in the short term, it will support medium-term growth and profitability. With a keen focus on efficiencies, MTN SA will prioritise returning top-line growth and the EBITDA margin to targeted medium-term ranges over time.

MTN Nigeria remains committed to accelerating service revenue growth, improving profitability and strengthening its financial position, particularly the negative retained earnings and equity position reported as at 31 December 2023. To this end, the engagements with regulatory authorities on much-needed tariff increases for the industry remain a key short-term priority; and there is comprehensive work in progress to reduce and mitigate forex exposures impacting the business, including tower operating costs. MTN Nigeria will unlock efficiencies to drive operating leverage, re-establish earnings growth, sustain strong free cash flow generation and restore its reserves and balance sheet position over the medium term.

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Led by MTN Ghana, we will work to capture growth opportunities in our broader Markets portfolio by investing in connectivity and further developing platforms. For our fintech business, our priority is to drive the expansion of the ecosystem to support growth in usage and monetisation. Through focused commercial interventions and leveraging our distribution, we will accelerate the scaling of the business. More broadly within our portfolio, price optimisation and regulatory discussions regarding tariff increases remain ongoing priorities.

The execution of our platform strategy has gained encouraging traction and momentum. Following the Mastercard agreement, we will continue to explore opportunities for other value-enhancing partnerships and investments in our platforms over the medium term. More broadly, we will accelerate the commercial monetisation within our platforms as they continue to scale. The ongoing efforts in our localisation programmes - particularly Ghana and Uganda - are also key to creating shared value.

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The financial resilience of our business is another ongoing theme and priority; the CFO Q&A (Q&A with the CFO) provides further detail on our continued drive to realise expense efficiencies and maintain a strong balance sheet and liquidity.

We are encouraged by our business's medium and long-term prospects and have, therefore, reiterated our overall medium-term guidance framework. The only change is a simplification of the fintech measure (see Our outlook).