MTN Group | Material matters impacting value creation

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MTN operates in a diverse macroeconomic environment focused on pan-African markets. In the short term, these economies have experienced higher levels of inflation and interest rates as well as foreign exchange volatility in line with global trends. In many of our markets, the trends in these key indicators started to abate in H2 2024, and showed signs of stabilising.

Africa's economies present the prospect for superior long-term growth, driven by young, fast-growing populations (referred to as the demographic dividend) and comparatively nascent penetration of a broad array of services, including the telecommunications, financial and digital spheres within which MTN operates. The structural growth in demand for these services strengthens MTN's compelling investment case.

Implications for value creation

Investor confidence (including the value they ascribe to MTN) and business performance (revenue, costs, profit and cash flow generation) are impacted by macroeconomic conditions.
Inflation and interest rates affect consumer spending, corporate input costs, as well as the cost of funding business operations. As these metrics rise, they can impede MTN's ability to grow its connectivity operations and platforms and lead to an erosion of value. The recent broad decline and stabilisation of trends offer better opportunities to accelerate growth and value creation.
A reduction in foreign aid funding could impact government spending, and potentially consumer spending in the affected markets. This can erode value through lower consumption of telecom and related services. Additionally, it may result in increased taxes to raise fiscal revenues, and a greater financial burden on corporates to make social interventions.
Fluctuations in the availability of foreign exchange influence the input costs of operations, particularly in tower leases. They also affect the cost and ability of deploying capex as well and the Group's ability to transfer cash from the Opcos.
The above macroeconomic indicators also impact capital markets and asset valuations, which in turn influences the company's ability to execute key strategic initiatives, such as those within our portfolio optimisation strategic priority.

Strategic response

Support our subscribers through work to enhance our CVM and streamline offerings to drive engagement and optimise pricing.
Continue to diversify the currencies in which we transact when procuring IT and network equipment, including smart procurement to manage the effects of forex volatility. Deliver cost savings and protect cash flow generation through our EEP.
Ensure our borrowings are held in currencies reflective of the markets in which we operate, with minimal exposure to hard currency.
Reduce debt, continue to optimise and simplify our portfolio, reduce risk and improve returns through the delivery of our strategy.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Portfolio optimisation

Outlook

Moderating inflation and interests rates support faster economic growth, improved consumer spending power and lower business costs, which drive our strategic growth ambitions.
Reduced forex volatility is supportive of better economic stability and ability to plan, as well as improved visibility around cash upstreaming.
Recent changes in the global geopolitical and economic order, with rising protectionism, increase the risks to global economic stability and growth prospects.

Opportunities

Growing penetration and a structurally higher demand for data and fintech services in our markets.
Focused execution of our strategy, disciplined capital allocation and our risk management framework are key to our ability to overcome macroeconomic challenges and capture growth opportunities.
Financial resilience and flexibility enable us to weather the short-term challenges and capture medium-term and longer-term growth opportunities.
Sustained investment in new network technologies and rural broadband coverage to maintain the scale and competitive edge in our markets.
Innovative and differentiated offerings to serve all customer segments.

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The global geopolitical landscape is characterised by increasing flux and uncertainty. This includes ongoing conflicts around the world, including the conflict between Russia and Ukraine, in the Middle East, as well as in parts of East and West Africa, some of which impact our operations directly. The escalation of political upheaval in global trade relations, changes in tariff policies and the termination of international aid funding and grant programmes further heighten the risks around economic growth prospects, especially in emerging markets, including our footprint.

The prospects within the pan-African footprint in which MTN operates, have a meaningful dependency on global geopolitical developments. While many markets continue to implement important reforms, escalating tensions in world geopolitics present headwinds to the budding recovery and acceleration in macroeconomic growth. This will have a direct bearing on MTN's value creation, preservation or erosion journey.

Implications for value creation

Investor confidence and business performance are affected by geopolitical instability.
In some markets, unpredictability in political conflicts can cause disruptions to our business and our capacity to add value for our stakeholders.
Social unrest, conflict and sanctions affect MTN's capacity to conduct business in certain areas.
Geopolitical instability can affect business performance and investor confidence in the company's ability to create and preserve value, with higher risk of value erosion from external factors.
The perceived risk profile of our business from the broader geopolitical context also affects investors' assessments of asset values, including those of the Group.

Strategic response

Implement our comprehensive stakeholder relations plan, which is premised on being proactive, inclusive and principles-driven.
Use political and economic scenario analysis as part of our risk management.
Analyse the presence and strategies of competitors in various regions. This helps in identifying opportunities for differentiation and strategic partnerships.
Sustain the health and flexibility of our balance sheet to weather any short-term volatility arising from geopolitical risks.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Portfolio optimisation

Outlook

Increased risks to stability and economic growth in our markets.
Young, rapidly growing population presents exciting demographic potential, which underpins our long-term value creation journey and prospects, alongside a relatively low adoption of data, fintech and digital services MT, LT.
Opportunity to deepen stakeholder relations and partnerships in the socioeconomic and digital development of our nation states.

Opportunities

Maintain positive and collaborative relationships with regulators.
Provide resources to assist nation states in implementing regulation requirements.
Leverage balance sheet strength to capture any value-enhancing opportunities arising from geopolitical flux.
Actively engage governments and regulators to help shape industry dynamics across markets.

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Our industry and the markets in which we operate have complex and dynamic regulatory environments, with increasing compliance requirements. It is not uncommon for governments to consider increasing taxation to finance the fiscus. Stricter regulations – including those on price increases – impact growth, profitability and our ability to serve our customers.

Guided by our regulatory and stakeholder management and engagement policies, we continue to engage with our nation state and regulatory stakeholders.

Implications for value creation

The customer experience may be affected by a compliance burden in the short term, but when laws and regulations are implemented properly, they offer greater protection for customers, operators and the long-term sustainability of the industry.
Changes in regulatory obligations increase compliance requirements and can impact our overall growth, revenue and profitability, resulting in value erosion.
Tax regulations and directives can have material impacts on our cash flow and balance sheet, which in turn have implications for MTN's enterprise value.
Well-structured tax policies encourage responsible corporate behaviour, which supports the sustainability of the industry.

Strategic response

Maintain positive, collaborative relations with regulators and actively engage with them on developments affecting the industry and required tariff adjustments.
Advocate for the harmonisation of regulations across our markets to support efforts to promote digital and financial inclusion.
Provide resources to assist nation states in implementing regulatory requirements (e.g. SIM registration).
Actively monitor and manage negative media coverage concerning tax matters in order to mitigate reputational risks.
Continuously develop and implement policies governing tax compliance.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Portfolio optimisation

Outlook

Maintain compliance with ongoing regulatory directives ST, MT,LT.
Implement localisations in accordance with local regulations, subject to conducive market conditions MT,LT.
Strengthen capital markets in the countries where we operate and support their economic development ST, MT,LT.
Foster a more sustainable and secure operating environment through value-adding regulations.

Opportunities

Maintain positive and collaborative relationships with regulators.
Provide resources to assist nation states in implementing regulation requirements (e.g. SIM registration).
Fulfil localisation commitments in line with local regulations and our priority to create shared value.
Actively engage governments and regulators on developments affecting the industry across markets.

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In a challenging and uncertain macroeconomic and geopolitical climate, financial resilience is key: a robust balance sheet is essential to act as a shock absorber, giving us the flexibility to manage heightened macro and operational risks, as well as pursue our strategic priorities. Our ability to sustainably grow revenue and generate cash supports our capacity to make investments.

A healthy balance sheet underpinned by cash upstreaming from Opcos and disciplined capital allocation provide a vital foundation to mitigate value erosion during times of increased macro uncertainty, as well as capture opportunities that create and preserve value.

Implications for value creation

A strong balance sheet provides flexibility to deliver on our strategic ambitions.
The quantum of cash we upstream from Opcos underpins our ability to deleverage the Holdco balance sheet and how much we can pay in dividends to shareholders.
Foreign exchange volatility and availability impact our opex, capex and cash upstreaming.
Volatile macro conditions can impact the cost and ability of the company to raise funding for its operational and strategic needs.

Strategic response

Manage debt profile and our exposure to US dollar debt through liability management opportunities as well as the innovative execution of our portfolio optimisation priority.
Continue to execute on our EEP.
Prioritise and expedite capex in line with our capital allocation framework.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Portfolio optimisation

Outlook

Maintain capex envelope and deliver on the asset realisation programme (ARP) ST.
Continue to manage non-rand debt through further liability management ST,MT.
Continue to pursue the EEP to reduce costs and support cash flows ST,MT.
Invest capex in the coverage and capacity of our networks and drive growth on select platforms MT,LT.

Opportunities

Deliver on the medium-term guidance.
Pursue our growth plans, leveraging greater balance sheet flexibility.
Explore potential and options to return cash to shareholders in line with our capital allocation framework.

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To create and unlock more value and attract capital, telecoms operators are adopting a de-layering approach. This promotes efficiency, innovation and service quality by enabling each de-layered entity to focus on its core competencies and flourish. The structural separation of the different layers of the traditional telco also provides financial breathing room.

Our platform strategy allows us to spur on innovation and unlock value through economies of scale. How quickly and how far this evolution proceeds depends to a large extent on the varied and complex regulatory environments in which we operate.

Implications for value creation

MTN and our stakeholders will benefit from the value unlock that comes about through the successful de-layering of the telecoms business model.
De-layering accelerates digital and financial inclusion.
Our platform strategy and the execution of the de-layering approach to our business model enables speed of execution through value-adding strategic partnerships and compliance with regulatory requirements.
This approach also improves our risk profile and investors' assessment of our enterprise value.

Strategic response

Progress the structural separation of the fintech business at the Opco level. This is key to unlocking the proceeds from the agreed minority equity investment of US$200 million made by Mastercard.
Remain focused on making additional investments into our Fintech operations to support long-term growth with our partners.
Continuously review our strategic InsurTech partnership with Sanlam, through aYo, including initiatives in high-opportunity, scalable markets such as Ghana, Uganda, Nigeria, Cameroon and South Africa.
Advance the separation of our fibre business, Bayobab.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Portfolio optimisation

Outlook

Advance the structural separation of the fintech operations through relevant regulatory processes.
Carefully consider selected minority investments of up 30% in Group Fintech ST.
Progress the separation of our fibre assets ST.
Continue to engage with regulators on the importance of harmonising regulations across Africa ST,MT, LT.

Opportunities

Accelerate digital and financial inclusion across Africa through the structural separation of our businesses.
Enable MTN to benefit from economies of scale, unlocking value and further innovation.
Leverage our leading African brand and enter more strategic partnerships with sector specialists to propel further growth.

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The landscape across our markets is constantly evolving due to changes in pricing and competitive behaviours, and the entrance of new players. Innovative, competitive offerings and a compelling customer experience are key to maintaining our leading market positions as well as our ability to seize the opportunities for expansion into new markets.

Innovation and customer value management assist in protecting market and value share by leveraging our established market position. The financial burden of the investment requirements, along with the imperative to generate adequate returns, heightens the need for consolidation in our markets, which is also a global trend in the telecommunications industry.

Implications for value creation

Intensifying competition putting pressure on profit margins, but this may ultimately benefit customers through more compelling offerings.
As new players enter the market, such as in the fintech space, we must continuously innovate to differentiate our services and offerings, providing leading digital solutions for Africa's progress.
The continued need to invest in our businesses, combined with pressure on returns, increases the risk of value erosion, and highlights the urgency for consolidation to create and preserve long-term value.

Strategic response

Leverage economies of scale and greater efficiencies so that we can pass on savings to our customers while continuing to offer them a second-tonone network and customer experience.
Pursue our strategic goals by delivering greater digital and financial inclusion and offerings that enable the benefits of a modern connected life to everyone in our markets.
Continue to explore new markets and geographies where expansion would make sense, leveraging our leading brand, strong management, leading position in most of our markets and solid infrastructure base.
Monitor the landscape for opportunities that could create value through consolidation and optimise our portfolio.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Portfolio optimisation

Outlook

Continue to pursue delivery of the best customer experience and a second-to-none network ST,MT,LT.
Advocate for harmonised regulations across Africa ST,MT,LT.

Opportunities

Maintain positive relationships with all stakeholders, including regulators.
Actively engage governments and regulators on developments affecting the industry across markets.

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AI – most particularly generative AI – has the potential to reshape the nature of business operations and customer value delivery. LEO satellites can complement our terrestrial network and help extend mobile connectivity to more rural and remote areas where the terrain can be difficult for radio sites and backhaul transport. At the same time, sparse population distribution in these areas often makes regular cellular rollout uneconomical.

AI has the potential to provide additional insights into customer behaviours in a way that enables improved customer experience. It can help uplift revenue and enhance enterprise-wide cost initiatives. We are also cognisant of the imperative to deploy AI responsibly and ensure sound governance guardrails.

In terms of LEO satellites, these present both a competitive threat and an opportunity to leverage healthy partnerships to create value. We continuously monitor the evolution of emerging technologies, assessing their potential to create or erode value.

Implications for value creation

Given its potential to drive innovation and efficiency, AI has the potential to enhance value for MTN.
AI implementation also comes with risks, including those related to ethical implications and its impact on society.
LEO satellites may help us reach our goal of providing universal access, but businesses that offer LEO satellite services may pose greater competition to us, particularly in the home segment.
New technologies and innovative are central to our long-term sustainability and ability to create value.

Strategic response

Follow a disciplined approach to investing in the development of capabilities, governance, partnerships and proof points of value across all AI domains – diagnostic, predictive and prescriptive.
Refine our AI solutions while monitoring global developments and exploring additional use cases to deliver impact across areas such as CVM, network operations and operational efficiency.
Use our Responsible AI Policy and practices to mitigate potential risks.
Carry out direct-to-cell trials with LEO satellite partners.
Engage with other LEO satellite operators on various pilots, partnerships and diverse financing models.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Portfolio optimisation

Outlook

Refine our AI-powered assistance solutions ST.
Monitor developments in AI across the world, exploring additional use cases to support revenue generation, operational efficiency, cybersecurity, etc. ST,MT.
Continue to explore opportunities to collaborate with technology partners and LEO satellite operators ST,MT,LT.

Opportunities

Continue to harness the power of digital technologies responsibly, ensuring that our actions promote environmental sustainability.
Connect the unconnected using innovative yet accessible technology – including LEO satellites – thus paving the way for an 'always-on' future, where a modern connected life is accessible to everyone.

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Our people are key to driving the execution of our strategy. Across the world, digitalisation has accelerated the demand for digital skills, which we need to deliver on our purpose across our markets.

MTN invests in training programmes to upskill and reskill our current workforce, ensuring they are equipped with the latest skills.

We are looking at rolling out skills strategies through programmes like the MTN Skills Academy. This initiative is designed to address the high demand for digital skills by providing young Africans with access to training in digital and financial skills. By doing so, it not only enhances employment opportunities but also equips the workforce to tackle future challenges.

Implications for value creation

With the right skills, we can provide leading digital solutions for Africa's progress.
Without future-fit skills, there is a risk to sustainable value creation across all of our stakeholder groups.
As networks become more data-driven, proficiency in data analytics will be crucial for optimising network performance and improving customer experience.

Strategic response

Future-proof our talent pipelines through deliberate upskilling and reskilling and talent acquisition and retention through appropriate and competitive remuneration for scarce and critical skills.
Ensure that our Board of Directors has the requisite skills to guide management in our pursuit of strategic delivery.
Continue the work of the MTN Skills Academy and extend it to more markets and disciplines.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Outlook

Refine and evolve our training programmes focused on data science, fintech, digital product management, emerging tech, AI and machine learning ST,MT.
Prioritise efforts to accelerate digital literacy across our markets and platforms, further expanding the MTN Skills Academy ST, MT,LT.

Opportunities

Reposition our skills base for the future, ensuring we have the digital skills we need to support our platform and connectivity businesses.
Continue to drive digital skills for jobs to reach one million people by the end of 2025.

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World-class governance structures, practices and policies ensure the efficient, ethical and effective functioning of organisations. In a dynamic environment, multinationals like MTN need to be agile, responding to changes in their operational context, including regulatory changes. They need to be transparent and ensure a consistent approach across multiple jurisdictions.

The fast-evolving macro and technological environment in which we operate poses both risks and opportunities for developing future-fit governance and risk management frameworks.

Implications for value creation

An organisation that has clear governance structures, policies and practices is likely to be more successful and sustainable. Such an organisation fosters relationships with stakeholders built trust and provides them with a safe environment.
Effective risk management is necessary to ensure operational integrity and sustainability. Conversely, failures in governance, ethics and risk management could damage a company's operational and financial performance, reputation and licence to operate, and put both its employees and customers at risk.
Implementing sound governance and risk frameworks, and promoting ethical behaviour are critical in minimising value erosion that can arise from breaches in these codes.

Strategic response

Evolve our governance framework within the Group and subsidiaries, safeguarding ethical and effective control, clear decision making and a sound tone from the top.
Conduct independent Board evaluations on a regular basis.
Work to ensure ever-greater accountability, transparency, efficiency and compliance, as well as continual improvements in risk mitigation, reporting and staff retention.
Continue to enhance our risk management practices.
Endeavour to protect the rights of all people who use our services. Our approach to digital human rights is underpinned by a sound policy and due diligence framework.

Create shared
value

Portfolio optimisation

Outlook

Monitor the governance landscape and be responsive to it, while continuing to set and align with best practices ST, MT,LT.
Continue to refine and evolve our ethics-related policies ST, MT,LT.

Opportunities

Remain at the forefront of ethical and effective corporate governance and risk management across multiple markets and jurisdictions. By doing this, we will continue to enhance our reputation and the trust of our stakeholders and ensure the delivery of our strategy.

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We aim to give Africans hope, dignity and opportunity by enhancing digital and financial inclusion, delivering on our purpose to enable the benefits of a modern connected life for everyone in our markets.

Financial inclusion empowers individuals and small businesses by providing them with tools to save, invest, and manage their finances more effectively. This can lead to increased economic activity and growth in the regions where we operate. It is an essential element in accelerating Africa's digital future and the socioeconomic development of our nation states.

Implications for value creation

By enabling digital and financial inclusion, all our stakeholders – nation states, governments, regulators, customers, suppliers and investors – benefit.
Conversely, if people across our markets remain digitally and financially excluded, they have limited opportunities, with unemployment and poverty remaining their reality.

Strategic response

Build the largest and most valuable platforms, focusing on connectivity, fintech and digital infrastructure.
Portfolio optimisation, including the structural separation of our fintech business in particular.
Follow our CHASE framework to advance broadband internet access in rural and remote areas; make devices more affordable; reduce the cost to communicate; and extend digital skills.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Portfolio optimisation

Outlook

Consider further partnerships across all stakeholder groups in our work to extend digital and financial inclusion and to deliver on our CHASE framework ST,MT ,LT.
Remain committed to our strategic intent of leading digital solutions for Africa's progress ST.

Opportunities

Partner with like-minded organisations to drive coverage and device and data affordability; and extend digital literacy.
Provide simple and convenient financial services to the millions across our markets who remain outside of the formal financial services sector.

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Cyber-attacks continue to escalate across the world with increased third-party incidents and data breaches and more sophisticated ransomware. There is concern about the violation of children's rights, particularly online sexual abuse and bullying. Organisations must continuously assess the evolving security threat landscape and enhance their security and other mitigations.

In an increasingly digital world, the responsibility of operators in the digital and fintech spheres has risen to protect the digital rights and safety of all our stakeholders.

Implications for value creation

A cyber-attack aimed at MTN could erode value by disrupting operations and compromising the personal and confidential data of our customers, MTNers, partners and suppliers.
A cyber-attack could result in significant business interruptions and reputational damage, an associated financial impact, as well as exposing MTN to increased regulatory scrutiny.
Establishing strong policies and systems are critical to the company's ability to preserve value.

Strategic response

Continuously improve our overall security capabilities, as well as those in our supply chain and in our platform businesses.
Focus on enhancing our security resilience roadmap to address the threat of ransomware.
Conduct simulations of Opco information security crises.
Collaborate with organisations like the Internet Watch Foundation.
Continue to educate children, parents, teachers and caregivers on the responsible use of digital technology through our comprehensive child online protection programme.

Build the largest and
most valuable platforms

Drive industry-leading
connectivity operations

Create shared
value

Outlook

An increase in sophisticated cyber-attacks, including ransomware and threats of data privacy breaches ST,MT, LT.
Ongoing security assessments of MTN systems to identify vulnerabilities requiring remediation ST,MT, LT.
Continue to evolve our solutions for child online protection ST,MT, LT.

Opportunities

Deploy and optimise integrated and scalable security capabilities to drive a mature security posture.

Key		Denotes higher probability of occurrence/impact and/or inability to remediate
		Denotes medium probability of occurrence/impact and/or inability to remediate
		Denotes lower probability of occurrence/impact and/or inability to remediate

MTN Group Limited Integrated Report for the year ended 31 December 2024

Downloads

Material matters impacting value creation

MM

1

Macroeconomic conditions

MM

2

Geopolitical landscape

MM

3

Complex regulatory and tax environment

MM

4

Financial resilience

MM

5

De-layering of the telecoms business model

MM

6

Competitive landscape and market structure

MM

7

AI, LEOs and other emerging technologies

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8

Future-fit skills

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9

Governance, ethics and risk management

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10

Enabling digital and financial inclusion

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11

Cybersecurity and digital safety

About MTN

Reporting centre

Definitions and glossary

^	Denotes that these are new ‘headline’ material matters for 2024, or included as underlying elements in previous reporting.
^#	Denotes the ‘headline’ material matters under which the matter was previously categorised.

Downloads

Material matters impacting value creation

MM 1 Macroeconomic conditions

MM 2 Geopolitical landscape

MM 3 Complex regulatory and tax environment

MM 4 Financial resilience

MM 5 De-layering of the telecoms business model

MM 6 Competitive landscape and market structure

MM 7 AI, LEOs and other emerging technologies

MM 8 Future-fit skills

MM 9 Governance, ethics and risk management

MM 10 Enabling digital and financial inclusion

MM 11 Cybersecurity and digital safety

About MTN

Reporting centre

Definitions and glossary

MM

1

Macroeconomic conditions

MM

2

Geopolitical landscape

MM

3

Complex regulatory and tax environment

MM

4

Financial resilience

MM

5

De-layering of the telecoms business model

MM

6

Competitive landscape and market structure

MM

7

AI, LEOs and other emerging technologies

MM

8

Future-fit skills

MM

9

Governance, ethics and risk management

MM

10

Enabling digital and financial inclusion

MM

11

Cybersecurity and digital safety