Commentary

REVIEW OF RESULTS

MTN Group achieved solid performance in the 12-month period ending 31 December 2006. Although the Group‘s profile changed significantly through acquisitions concluded during the year, strong organic growth in the traditional markets underpinned the Group’s performance. South Africa and Nigeria had revenue growth of 22% and 31% respectively in highly competitive markets compared to the prior 12 months*. MTN Nigeria launched an ultra modern fibre-optic transmission network that will cover over 3 500 km when completed and span the length and breadth of the country. US$99 million has been invested in this project to date.

Acquisitions had a significant impact on the Group’s results during the current year, notably through the Investcom transaction.

The Group changed its financial year-end to 31 December, in line with its operational cycle and international peer group.Consequently, the Group‘s prior year‘s audited results ended December 2005 cover a 9-month period. In certain instances, in order to provide meaningful comparatives, the unaudited 12-month period ended 31 December 2005 has been used.

In line with MTN’s vision of being the leading provider of telecommunications services in emerging markets, the Group made a cash and share offer of US$5,526 billion on 23 May 2006 to acquire the entire issued share capital of Investcom LLC (“Investcom”),a company listed on the Dubai and London bourses. Investcom contributed meaningfully to growth over the period since the acquisition and has been successfully integrated into the Group. In addition, existing operations continued to perform well.

The Investcom transaction became unconditional on 12 July 2006 and settlement took place during July 2006. In terms of the offer, US$3,7 billion was settled in cash and 183 million MTN Group Limited shares were issued to previous Investcom shareholders in exchange for all of Investcom’s issued share capital. Investcom was subsequently delisted in both Dubai and London. We have consolidated the results of Investcom for the six months ended 31 December 2006 in compliance with IFRS reporting requirements.

MTN uses segmental reporting to reflect the performance of the Group within operationally defined operating regions, viz: South and East Africa (“SEA”),West and Central Africa (“WECA”) and Middle East and North Africa (“MENA”). Investcom operations have expanded our footprint from 11 to 21 countries and contributed to earnings of the WECA and MENA regions.

The Group’s revenue increased by 49% to R52 billion when compared to the prior 12-month period to 31 December 2005*. The revenue increase was driven mainly by the acquisition of Investcom and increased subscriber numbers. Excluding the R6 billion revenue impact from Investcom, the year-on-year growth in revenue would have been 32%*. SEA is the largest contributor at 52% followed by WECA and MENA at 41% and 7% respectively.

The Group’s earnings before interest, tax, depreciation and amortisation (“EBITDA”) increased 53% to R22 billion when compared to the prior 12-month period*. Excluding the R2,4 billion impact of Investcom, the year-on-year growth in EBITDA would have been 36%*. SEA contributed 42%, which is lower than its higher revenue contribution given its lower EBITDA margins. WECA contributed 50% of total EBITDA. The start-up nature of many of the MENA operations has resulted in a relatively small contribution of 5% to Group EBITDA.

Adjusted profit after tax (“PAT”) increased to R12 billion compared to R7 billion for the nine months to December 2005.

Basic headline earnings per share (“EPS”) rose to 606,5 cents for the period, 69% above the 359,8 cents for the nine months ended 31 December 2005.

MTN Group subscriber numbers increased by a healthy 73% on the back of both organic and acquisitive growth, bringing the total number of subscribers at 31 December 2006 to 40 million.Subscribers in SEA increased by 27% to 16 million, the WECA region by 80% to 20 million and MENA recorded five million. Excluding the impact of Investcom’s 8,4 million subscribers, the year-on-year growth was 36% with Nigeria and South Africa accounting for 17% and 10% respectively. Investcom subscribers have grown 38% in the six months since July 2006 reflecting the lower base and greater growth opportunities in these relatively underpenetrated markets.

Impact of Investcom

Since acquisition, Investcom operations have generated R6 billion of revenue which is included in the consolidated results to 31 December 2006, and R10 billion** for the full year (2005: R5,7 billion**). Investcom generated R2,4 billion in EBITDA in the second half of the year and R4 billion** for the full year (2005: R2,5 billion**).

A preliminary allocation of goodwill of R23 billion, representing the difference between the purchase price and the fair value of net assets of Investcom has been recognised in the current reporting period. Total debt of approximately R25 billion was raised to finance part of the acquisition of Investcom. This included R5 billion four-year and R1,3 billion eight-year bonds as well as syndicated facilities consisting of two five-year term loans of US$750 million and R7 billion each and a three-year revolving credit facility of US$1,25 billion. US$862 million of the revolving credit facility was drawn to settle Investcom shareholders and repaid in full by February 2007.The Group’s target is to reduce total net debt to 0,4 times EBITDA by the end of 2008.

Income statement analysis

When compared with the unaudited 12-month period ending 31 December 2005, Group consolidated revenue increased by 49% (with R6 billion being attributable to the Investcom acquisition) to R52 billion still driven mainly by South Africa, which increased by 22% to R25 billion, and Nigeria, which increased by 31% to R15 billion*. Ghana and Sudan revenues for the July to December 2006 period were R1,7 billion and R570 million respectively.

Group EBITDA increased by 53% to R22 billion when compared with the unaudited 12-month period ending 31 December 2005, as a result of revenue growth, positive exchange rate movements and initiatives to improve operational efficiency. Group EBITDA margin improved to 43,4% from 42,4% for the unaudited 12-month period ended 31 December 2005 on strong margins in the key operations of South Africa 33,9% (2005: 34,3%) and Nigeria 57,2% (2005: 53,2%). For the six months ended 31 December 2006, margins for Ghana and Sudan were 52% and 17% respectively.

Group depreciation increased by R1,8 billion compared to the unaudited 12 months to December 2005*. Nigeria’s depreciation charge was a major contributor with an increase of R867 million, with a significant portion attributable to additional capital expenditure and the strengthening of the Naira against the Rand.

The full-year impact of depreciation related to operations acquired in 2005 (Côte d’Ivoire, Zambia, Botswana, Congo Brazzaville and Iran) was an additional R165 million compared to the proportional depreciation charge for 2005.

Investcom operations incurred R562 million in depreciation charges for the six months to December 2006, contributing 31% of the increase in the Group’s depreciation charge for the year.

Amortisation of intangible assets for the Group increased by R1 billion when compared to the nine months to 31 December 2005. The amortisation of intangible assets as a result of the Investcom acquisition totalled R587 million for the 6-month period.

Net finance costs of the Group increased by R1,1 billion when compared to the nine months to 31 December 2005, which primarily relates to financing for the acquisition of Investcom.

The Group incurred total foreign exchange losses of R700 million for the current year. This included recognition of the fair value and foreign exchange adjustments related to the Nigeria put option of R270 million, R100 million of losses on the importation of mobile handsets, R71 million in respect of Guinea Conakry due to the sharp devaluation in the currency over the 6 month period and other charges on foreign currency transactions.

Functional currency gains of R452 million were included in finance income for the year.

The Group’s tax charge has increased by R1,2 billion compared to the nine months to 31 December 2005 due to the higher profit levels as well as additional tax charges of R233 million relating to the former Investcom operations.

The Board continues to report adjusted headline EPS in addition to basic headline EPS. The adjustments are in respect of:

• The positive impact on earnings due to the Nigerian deferred tax credit.This decreases adjusted headline EPS by 37,1 cents.
• IFRS requires the Group to account for a written put option held by minority shareholders of certain subsidiaries, which gives them the right but not the obligation to require the subsidiary to purchase their shareholding at fair value.The net impact is an increase in adjusted headline EPS of 15,3 cents.

Adjusted headline EPS of 584,7 cents for the period compares favourably to adjusted headline EPS of 338,2 cents for the 9-month period ended 31 December 2005.

Balance sheet and cash flow

MTN’s balance sheet transformed substantially following the acquisition of 100% of Investcom as well as the acquisition of additional shares in MTN Uganda, MTN Nigeria and other acquisitions during the year. These acquisitions had a material impact on the balance sheet of the Group, with a cash outflow of R28,7 billion as well as the issue of more than 189 million new shares, and corresponding increases in tangible and intangible assets and long-term borrowings.

The total assets for the Group increased by R52 billion to R97 billion at 31 December 2006 from a balance of R45 billion at 31 December 2005.

The Group’s closing balance sheet has also been impacted by the depreciation of the South African Rand against foreign currencies.The most significant impact was the 11% depreciation of the Rand against the Nigerian Naira.

Property, plant and equipment increased by R9,9 billion from the beginning of the financial year. Acquisitions of property, plant and equipment across the Group amounted to R9,8 billion and included R3,6 billion for the Nigeria network rollout and R2,2 billion in South Africa.Of the closing property, plant and equipment values, R3,8 billion relates to Investcom operations. Exchange rate differences noted previously increased property, plant and equipment closing values by R1,7 billion while depreciation decreased property, plant and equipment by R5 billion.

Goodwill and other intangible assets have increased by R33,3 billion, comprising goodwill of R24 billion, licences of R5,3 billion and subscriber bases of R3,5 billion primarily as a result of the Investcom acquisition. Goodwill of R24 billion was effectively reduced by a R2,5 billion gain from hedging the cash settlement of the Investcom transaction.

Current assets increased by R6,9 billion to R20,6 billion at 31 December 2006. The majority of this increase was attributable to Investcom (R5,6 billion) which included cash balances of R3,6 billion.

The Group’s cash balances increased by R2,5 billion to R10,1 billion after cash outflows of R9,8 billion for capital expenditure, R1 billion for dividends and R4,8 billion for the additional equity purchased in Côte d’Ivoire, Botswana, Uganda and Nigeria.

OPERATIONAL REVIEW

South Africa MTN South Africa recorded a solid 22% growth in subscribers from 10,2 million to 12,5 million following the introduction of new products and services and an increased focus on distribution. Average revenue per user (“ARPU”) increased in the prepaid segment to R94, an increase of 1% from the prior period, due to the launch of attractive packages and competitive tariffs. Postpaid ARPU continued to trend lower at R487 for the year due to increased connections of lower-end packages.

Building on the consumer, corporate and reseller business unit structure established in 2005, a major focus in 2006 was establishing customer-centric processes and a clear value proposition for each market. Internal campaigns to improve customer service across all levels of interaction are showing promising results and reflected in MTN South Africa securing a number of sizeable tenders in the corporate market.

MTN South Africa maintained its market share for the year at 36%.

Major innovations during the year included the launch of a prepaid value wallet, MTN@Access, an entertainment portal focused on music, games and World Cup soccer.

Infrastructural enhancement continued during the year, with 263 new base transceiver stations (“BTSs”), bringing the total to 4 932, integrated into the network which is experiencing significantly higher SMS traffic and increasing GPRS/data volumes. MTN’s banking product made good progress during the year and recorded 83 000 subscribers.

Nigeria In an exceptional performance, MTN Nigeria increased its subscriber base by 47% over the prior reported period, recording some 3,9 million net connections for the year with more than 12,3 million subscribers at year-end. In addition, MTN Nigeria recorded market share of 46% and reduced churn levels from 35% to 30%. This performance was largely due to the successful introduction of a segmented value proposition and distributor campaigns.

ARPU declined by 18% from US$22 in the prior year to US$18, consistent with increased penetration and reflecting the continued acquisition of subscribers at the lower end of the market.

Product innovation played an important role in keeping the MTN brand at the forefront of consumer awareness in the highly competitive Nigerian market. Over the last six months, MTN Nigeria’s brand preference and customer satisfaction increased from 49% to 54% and 69% to 80% respectively. Among the numerous product offerings introduced during the review period, MTN Loaded has proved immensely popular. The MTN Loaded portal service provides customers with easy and direct access to a virtual island of fun and entertainment ranging from downloadable ringtones to popular logos.The MTN Xtra Ordinary range of new prepaid per-second-plans offer unique value to different customer segments, while MTN Xtra Connect offers cost-effective calls such as discounts on calls to friends and family members and at low-traffic times. In the first product of its kind in Nigeria, MTN X-Change introduced a revolutionary electronic wallet through which subscribers purchase airtime and make payments from ATMs in MTN service centres,ConnectStores and selected external ATMs.The impact of these products has been most evident in subscriber retention and increased minutes of use. For corporate users, MTN Nigeria launched a mail package incorporating multimedia messaging and GPRS.

Ghana MTN’s Ghana operation was incorporated into the MTN Group as part of the Investcom acquisition in July 2006. In that time, the company launched several innovative services into the Ghanaian market, improved service and call quality and made further progress in expanding the network infrastructure.

Year-on-year subscriber growth was over 42%, from 1,8 million to 2,6 million, comprising mainly prepaid subscribers. Due to a delayed network rollout and competitors’ offerings, market share dropped to 52%. Levels of churn among postpaid subscribers have declined following improved credit control measures and heightened awareness of service. ARPU decreased from US$18 for the full year to 31 December 2005 to US$17 for the six months to 31 December 2006, primarily due to lower tariff and interconnection charges but also due to the addition of lower-end customers.

MTN’s Ghana operation introduced discounted off-peak calls, bulk SMS, GPRS and EDGE services and a wireless mobile office package that is particularly effective in rural areas with limited data connectivity. The company also introduced GPRS roaming with South Africa and Nigeria.These initiatives have proved successful and will be intensified in the new financial year.

Following a slow rollout in the first half of the year, network quality and capacity improved significantly in the last four months with 297 BTSs being completed compared with only 159 in the first eight months. Substantial progress was also made in completing microwave backbone transmission rings that will enable the company to reduce transmission costs in future and penetrate new areas.

Iran The MTN Group holds 49% of MTN Irancell, with the balance held by the Iran Electronic Development Company. The company has a 15 year renewable GSM license and launched commercial operations on 21 October 2006.

In the two months between launch and year-end, MTN Irancell acquired 154 000 postpaid subscribers at an ARPU of US$9, a weaker start than expected due to a late launch and uncompetitive national coverage. Network coverage for MTN Irancell was initially only at 16% of the national population making it difficult to attract subscribers against a well entrenched competitor. Coverage and network quality continues to improve and MTN Irancell's focus for 2007 is to continue extending coverage as rapidly as possible, supported by attractive promotional campaigns and continued customer service.

Already 2007 has shown faster subscriber growth as the company improves its coverage, distribution and brand awareness. By 25 March 2007, MTN Irancell had recorded more than one million subscribers commissioned 588 BTSs and covered 49 cities. Bedding down the Iran operation remains material to the Group‘s performance.

The United Nations Security Council passed formal sanctions against Iran on 24 March 2007 in respect of Iran’s uranium enrichment nuclear programme and military issues.

We hope that the current situation will be resolved through peaceful diplomatic means.

Sudan The Sudan operation recorded an exceptional increase in subscriber numbers for the period from 269 000 in December 2005 to exceed the million mark at year-end. This is despite regulatory and logistical challenges with rollout as well as increased competition in the second half of the year.A range of initiatives and country-firsts enabled it to lift its market share from the mid-teens to almost 25%.

Strong growth in subscriber numbers was supported by an equally strong increase in the staff complement – particularly in senior positions – aggressive advertising and marketing campaigns, and significant expansions to network infrastructure and coverage. ARPU was US$16 for the six months to 31 December 2006.

During the period, 480 BTSs were rolled out, one mobile switching centre and 19 base station controllers were added to the network.

Prospects The ability to execute MTN's vision to be the leading operator in emerging markets has been enhanced by the Group‘s increased footprint and scale.The focus for 2007 includes driving regional synergies, taking advantage of opportunities within the value chain and improving operational efficiency through our least-cost operator strategy. In addition, we will continue to focus on rolling out our networks and pursuing strategic expansion opportunities to diversify earnings.The Group will also focus on implementing mobile money/payment solutions in our key markets to facilitate the transfer of funds in underserviced markets.

Assuming the continuation of current market conditions, the Board expects the Group to continue showing healthy subscriber growth and maintain its strong market position in key operations.

MTN Nigeria‘s pioneer status ends on 1 April 2007 and 2007 will also be the first year in which profits will be taxed.This and the initial dilution impact of the Investcom acquisition will result in earnings consolidation in 2007.

DIVIDEND DECLERATION

In light of the Group’s strong free cash flow generation coupled with its strong financial position, a dividend of 90 cents per share (December 2005: 65 cents per share) has been declared.

Notice is hereby given that a dividend (number 8) of 90 cents per ordinary share has been declared and is payable to shareholders recorded in the register of the MTN Group at the close of business on Friday, 20 April 2007.

In compliance with the requirements of STRATE, the electronic settlement and custody system used by the JSE , the MTN Group has determined the following salient dates for the payment of the dividend:

Share certificates may not be dematerialised/rematerialised between Monday, 16 April 2007 and Friday, 20 April 2007, both days inclusive.

On Monday, 23 April 2007 the dividend will be electronically transferred to the bank accounts of certificated shareholders who make use of this facility. In respect of those who do not use this facility, cheques dated Monday, 23 April 2007 will be posted on or about that date. Shareholders who have dematerialised their shares will have their accounts held by their Central Securities Depository Participant or broker credited on Monday, 23 April 2007.

For and on behalf of the Board

Fairland
28 March 2007

Certain statements in this announcement that are neither reported financial results nor other historical information are forward-looking statements, relating to matters such as future earnings, savings, synergies, events, trends, plans or objectives.

Undue reliance should not be placed on such statements because they are inherently subject to known and unknown risks and uncertainties and can be affected by other factors, that could cause actual results and company plans and objectives to differ materially from those expressed or implied in the forward-looking statements (or from past results).

Unfortunately the company cannot undertake to publicly update or revise any of these forward-looking statements,whether to reflect new information of future events or circumstances or otherwise.

*Compared to previous unaudited 12-month period
**Unaudited