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Annual Report : Chief Operating Officer’s report   Next : MTN South Africa
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Review of operations - Contents

Chief Operating Officer’s report

MTN today is Africa’s largest multinational telecommunications company operating in 11 countries and servicing 23,2 million subscribers

Non-South African operations contributed 43% of revenue and 49% of adjusted headline earnings per share. This contribution will continue to increase in line with our expansion strategy


Sifiso DabengwaOVERVIEW

MTN experienced tremendous subscriber growth of 48% for the nine months ended 31 December 2005. Mobile penetration varies in the different operational regions, with low penetration levels presenting opportunities for growth despite the associated decrease in ARPU. All operations focused on increasing market share, improving customer service and improving operational efficiency.

Our strategic objective of market expansion was achieved as we entered Côte d’Ivoire, Zambia, Botswana and the Republic of Congo (Brazzaville); the integration of these operations into MTN remains a focus for the year ahead. Iran poses a great opportunity with the installation and commissioning of a network in that country being a crucial challenge.

CORPORATE GOVERNANCE

As a multinational group, the MTN Group endeavours to apply global best practices in governance throughout its operations. In South Africa, MTN aims to comply with the requirements and recommendations of both King II and the JSE Limited and other applicable legislation. In addition, the MTN Group vigorously pursues corporate social investment activities in all territories of operation.

The Group has been restructured into three regions namely West Africa, Southern Africa and Middle East, North and East Africa each headed by an executive vice-president. The executive vice-presidents will ensure effective implementation of MTN’s strategies and priorities.

HUMAN RESOURCES

MTN’s 8 360-strong workforce reflects the demographic diversity of our markets. In South Africa, MTN is aligned with the requirements of the industry charter for economic empowerment, entrenching our status as a leading black economic empowerment company.

The continued availability of top people is vital for MTN to achieve its expansion targets. To this end, highly competitive remuneration structures and incentive schemes are in place. An aggressive succession strategy is being implemented across all operations, aligning resources with strategic objectives.

OPERATIONS

During the period MTN invested R6,7 billion in network infrastructure, upgrades and capacity expansion, providing 3G coverage in South Africa and GPRS and MMS capability in other markets. Capital expenditure is expected to increase to R12,9 billion in 2006.

In April 2005, MTN embarked on a global brand relaunch, positioning MTN as one of Africa’s pre-eminent brands with the now familiar Everywhere You Go payoff line.

Legal and regulatory change defines the telecommunication industry in our markets. Our approach is a facilitative one – contributing to the development of appropriate frameworks that benefit the consumer and encourage fair competition. Key issues remain liberalisation and convergence.

Sifiso Dabengwa



Group Chief Operating Officer
22 March 2006