The MTN Group has expressed concern over inaccurate media reporting on some of the topics discussed with members of the media at a press briefing held after 2O15 results presentation.

The media session was addressed by Executive Chairman Phuthuma Nhleko and his senior leadership team. The team used the opportunity to address a number of topics, and engage members of the media on matters of interest to them.

“MTN is thus particularly perturbed that despite the extensive engagements in the day, the media coverage around our results has been characterised by grossly inaccurate media reports and misinformation.

We are disturbed by this as the issues being misrepresented are very material to our operations and stakeholders. Of particular concern are reports attributed to our senior executives, purporting that MTN Group is planning to list in Nigeria. This is grossly inaccurate.

The correct comment, as expressed by the Executive Chairman, is that MTN could consider listing the local operation, MTN Nigeria, not the Group. As a result, reports that MTN is considering a secondary listing in Nigeria are misleading.

Furthermore, the listing of MTN Nigeria, as indicated in the media briefing, remains a consideration, it is not a planned listing, as suggested in some of the media reports. Also important to correct is that the current shareholding in MTN Nigeria available for Over-The-Counter (OTC) trading constitutes approximately 10% of MTN Nigeria.

Also worrying are reports that MTN has $22 billion stuck in Nigeria. This is completely inaccurate. MTN Nigeria has the cash equivalent of approximately R24.6bn with some R26.2bn in debt implying a net debt position of R1.7bn”

About the MTN Group
Launched in 1994, the MTN Group is a leading emerging market operator, connecting subscribers in 22 countries in Africa, Asia and the Middle East. The MTN Group is listed on the JSE Securities Exchange in South Africa under the share code: “MTN.”

As of 31 December 2015, MTN recorded 232.5 million subscribers across its operations in Afghanistan, Benin, Botswana, Cameroon, Cote d’Ivoire, Cyprus, Ghana, Guinea Bissau, Guinea Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo-Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia.

The number of 4G mobile connections worldwide has surpassed the one billion mark and is on track to account for a third of all mobile connections by 2020, according to a new study by the GSMA.

The series of reports points to an accelerating technology shift to 3G 4G mobile broadband networks across both developed and developing markets, which is fuelling digital innovation, smartphone adoption and mobile data growth.

The study calculates that the mobile industry made a $3.1 trillion contribution to the world economy last year, equivalent to 4.2 per cent of global GDP.

“Our new report reveals that mobile broadband is now a truly global phenomenon, extending high-speed connectivity and services to citizens in all corners of the world,” said Mats Granryd, Director General of the GSMA.

“The unprecedented growth in mobile broadband last year is testament to the billions of dollars that mobile operators have invested in next-generation networks, services and spectrum in recent years. Mobile is now the most ubiquitous platform for people and businesses to connect and innovate in today’s digital economy.”

4G accounted for one billion of the 7.3 billion mobile connections reached by the end of 2015. The number of 4G connections doubled in 2015, largely as a result of the increase in 4G network deployments in the developing world.

At the end of the year, there were 451 live 4G (LTE) networks available in 151 countries, with almost half of these in the developing world. 4G is forecast to account for around a third of the almost nine billion mobile connections expected by 2020.

Mobile broadband networks (3G and 4G) accounted for 50 per cent of connections in 2015, a figure set to rise to 70 per cent by 2020.

The combination of increasing mobile broadband access and rising smartphone adoption is contributing to an explosion in mobile data usage. Smartphones accounted for 45 per cent of mobile connections in 2015 (up from just 8 per cent in 2010) and a further 2.6 billion smartphone connections are expected to be added over the next five years.

Mobile data volumes are forecast to grow at a CAGR of 49 per cent over the next five years – a more than seven-fold increase – approaching 40 exabytes per month by 20202. This will be equivalent to a global average of 7 gigabytes per subscriber per month.

The number of unique mobile subscribers3 worldwide stood at 4.7 billion at the end of 2015, equivalent to 63 per cent of the world’s population. Unique subscribers are forecast to reach 5.6 billion by 2020, by which point more than 70 per cent of the global population are expected to have a mobile subscription. More than 90 per cent of subscriber growth over the next five years is forecast to come from developing world markets.

Mobile Contributing to GDP, Jobs and Public Funding
The global mobile industry added $3.1 trillion in economic value to the global economy in 2015, equivalent to 4.2 per cent of GDP4. This is predicted to rise to $3.7 trillion by 2020.

The industry also directly and indirectly supported 32 million jobs in 2015 (forecast to rise to 36 million in 2020) and contributed $430 billion to public funding in the form of various types of taxation, a figure expected to grow to $480 billion in 2020 based on current levels of taxation.

This public funding contribution excludes fees paid by operators for spectrum licences, which generated more than $90 billion for governments around the world last year as operators continued to acquire the spectrum they require to deploy mobile broadband.

The widespread availability of mobile networks is accelerating the ability to achieve the UN Sustainable Development Goals.
From improving access to vital services such as education, healthcare and financial services, to delivering smart agriculture and electricity management solutions, building resilient infrastructures or closing the gender gap, mobile technology is central in addressing a range of socio-economic development challenges. However, the report also notes the need for regulation to keep pace with rapid innovation.

“The fast pace of change means regulation can quickly become obsolete, irrelevant or, in some cases, harmful – distorting competition, slowing innovation and ultimately depriving consumers of the benefits of technological progress,” added Granryd.

“Recognising these challenges, the mobile industry is calling on policy-makers worldwide to adapt out-dated market regulations to reflect the new digital ecosystem.”

Canalys’ recently published country level forecasts predict that over 1.5 billion smart phones will ship in 2016.

Despite turbulence for certain vendors and countries, the industry will still grow by over 10% this year thanks to new opportunities. Canalys estimates total worldwide mobile phone shipments of just under 2 billion units with the smart phone share at 77%.

Industry growth is decelerating, making it a much tougher environment for vendors. In Q4 2015 in Asia Pacific, the total mobile phone market shrunk annually for the first time ever, with shipments decreasing by 2% to reach a total of 263 million units.

In China, total mobile phone shipments reached 117 million units, with year-on-year growth of 3% in Q4 2015. Smart phones grew 5% annually as vendors such as Xiaomi and Huawei released new devices. Smart phone shipment growth in Asia also came from India, Indonesia and the Philippines.

Ishan Dutt, a Canalys Research Analyst in Singapore, said:
“Growth in 2016 will come from budget-conscious first-time smart phone adopters in emerging markets outside the BRIC countries. Countries such as Pakistan, Bangladesh, Myanmar and Sri Lanka are gaining interest from smart phone vendors as operators in these markets move from voice to data-driven services. Subsequent upgrades and refreshes will largely depend on the value that data can provide to these consumers, which will require a strong ecosystem.’ Smart phone shipments to all of Asia Pacific are expected to exceed the 1 billion mark in 2019.”

In 2015, the North American smart phone market shrunk slightly by 0.4% year on year. It was affected by the huge upgrade cycle that has taken place through mobile operator promotion. Canalys expects smart phone shipments to grow by 4% in 2016 to 182 million, with growth driven by shortening refresh cycles as carriers move away from two-year contracts.

Latin America represented less than 10% of global smart phone shipments in 2015, with currency fluctuations and weakening economies slowing the high growth previously seen in the region.

“There are still strong areas of opportunity for smart phone vendors,’ said Dutt. ‘Those that have the finances and resources to invest in not only hardware innovation, but also developing and supporting channels and services in new and existing markets will create the right environment for growth.”

The MTN Group yesterday announced its annual results for the year ended 31 December 2015. The results reflect the difficult operating environment the business experienced during the period under review.

The Nigerian operation in particular experienced a very challenging year. Weak economic conditions and the limited availability of US dollars contributed to a lower-than-expected performance. Heightened regulatory pressure also severely impacted MTN Nigeria.

This was particularly evident in the suspension of regulatory services and the subscriber registration requirements, which meant that MTN had to disconnect 6.7 million subscribers. MTN Nigeria is working hard to complete the registration process in line with the NCC’s requirements.

On 24 February, MTN Nigeria made a without prejudice good faith payment of N50 billion (approx. US$ 250 million) to the Federal Government of Nigeria in relation to the NCC fine relating to the late disconnection of subscribers, on the basis that this would be applied towards a settlement.

MTN Nigeria also agreed to withdraw the matter from the Federal High Court. While negotiations with the regulatory authorities are on-going, for the purposes of this results announcement, MTN Nigeria recorded a R9 287 million provision for the fine at the end of the reporting period, negatively impacting the Group EBITDA by 13,6% and HEPS by 402 cents*.

Commenting on the provision, MTN Group Executive Chairman, Phuthuma Nhleko said: “MTN’s auditors have required that the company make a provision in line with the International Financial Reporting Standards (IFRS). Discussions with the Nigerian authorities continue on the matter.”

Meanwhile, the management of MTN Nigeria has clarifed that the R9287 million set aside in the recently released MTN Group Financial results is in accordance with the Principle of Prudence in generally accepted accounting standards. This requires that reasonable provisions be made for contingent liabilities.

The company said discussions with the Nigerian authorities are still on-going and that stakeholders will be advised accordingly when a settlement is reached.

MTN Executive, Amina Oyagbola said: “MTN’s auditors have required that the company make a provision in line with the International Financial Reporting Standards (IFRS).”

In the period under review, MTN Nigeria invested US$94 million in renewing its 2G licenses. It also concluded the acquisition of Visafone Communications. These developments, combined with the acquisition of a 4G/LTE licence and digital TV spectrum, highlight MTN’s long term commitment to improving the quality of Broadband services, a national priority for the government.
Ferdi Moolman, CEO of MTN Nigeria said: “We have invested more than US$16 billion in Nigeria over the past 15 years and contribute an estimated 4.5% to GDP. We are proud of the fact that we are an integral part of the Nigerian economic and social fabric.

We remain committed to the country and our top priorities are to improve network and service quality, as well as data speeds for our customers. Compliance with regulatory requirements also remains a focus. Although subscriber registration is highly complex given limited national identity databases and personal documentation, we remain committed to registering subscribers with the use of improved systems and processes.”

In line with the Group’s vision of “leading the delivery of a Bold, New Digital World to customers,” MTN continues to invest in digital services, ranging from e-commerce to digital media and mobile financial and lifestyle services.

MTN Nigeria is the largest music distributor in Africa and its investments in Mobile Money and Africa Internet Holdings (which houses well-known brands like online retailer, Jumia and real estate player, Lamudi) provide an exciting platform for the next phase of evolution of the mobile telecoms sector.

Moolman concluded: “We have put in place the operating and management structures, as well as made critical investments, to ensure that we improve our competitiveness in 2016. MTN is an enabler of socio economic growth in Nigeria. Our infrastructure supports critical sectors of the economy, from financial services to oil & gas and commerce. We remain committed to Nigeria and will continue to invest in the country through our operations and the MTN Foundation.”

The MTN Foundation— which has invested N18 billion in 550 projects and empowered more than 3 million people in communities across Nigeria since its inception –continues to focus on sustainable projects in three key areas, namely health, education and economic empowerment.

MTN donated US$10 million in Ebola awareness during the year.

SimbaPay, a leading digital money transfer provider, has expanded its instant Africa money transfer service to 5 new EU countries. The new countries are France, Germany, Ireland, Italy and Spain. This follows a pilot that has been running for 3 months in the new EU countries.

Africans living in these EU countries will now be able to send money back home instantly and free of charge. Money transferred via the service to Africa is credited instantly at the destination mobile money wallet, merchant or bank account.

According to Nyasinga Onyancha, CEO for SimbaPay “Our goal of connecting all Africans living abroad to any Mobile Money wallet or Bank Account in Africa just moved one step closer.”

He also expressed that “We’re quite pleased to deliver this to Africans in the EU and partner banks in Africa that have been requesting we expand the service to these new territories.”

Future Countries
SimbaPay will be expanding to another 6 countries by the end of March 2016.

According to the World Bank, Africans abroad currently send home an estimated $64 billion annually which is more than double the $30 billion that it receives in Foreign Aid.

How the Service Works
To send money via SimbaPay, Africans living in the EU with a bank account or debit card simply need to download the SimbaPay app from the Apple AppStore or Google Play and proceed to make money transfers straight from any mobile phone, tablet or computer.

Apart from sending money direct to mobile money services such as M-Pesa, customers can also send money to bank accounts in Africa and to Pay Bill merchants such as schools, utility companies, etc.

Accolades
In 2015, SimbaPay was named the Overall Winner at the prestigious Demo Africa 2015. SimbaPay was also nominated as finalist in the Best FinTech Innovation category at the annual Apps Africa Innovation awards.

SimbaPay also launched free, instant transfers to all Nigerian banks last year.

In June 2015 it became the first platform in the world to allow Kenyans living abroad make M-Pesa PayBill payments and continues to disrupt the cross-border remittance industry with its focus on extreme speed and convenience.