MTN Cameroon

		Launch date February 2000 MTN shareholding (%) 70 Market share (%) 56 Mobile penetration (%) 62 Population (million) 21,1 Forecast market size in 2014 (million) 17
Karl Toriola MTN Cameroon CEO

2012 performance

2012 was a year of transformation for MTN Cameroon. We delivered strong financial results, increased our market share through an aggressive acquisition drive and worked to ensure better engagement with all stakeholders. We invested in top-class infrastructure, rolling out 193 new sites to pass the key 1 000 site mark, and modernised 50% of our network.

The operating environment in Cameroon is difficult with a low rate of economic growth, high taxation and an unpredictable regulatory framework. Despite this, we grew local currency revenue by 8,9% and EBITDA by 14%.

We rolled out a comprehensive new distribution strategy with numerous "foot soldiers" selling SIM cards. As a result, we increased our subscriber base by 26% to 7,3 million and our market share by one percentage point to 56%.

In 2012, we saw data usage on our 2G network grow 400% thanks to our clear and deliberate strategy to expand this offering and revenue stream. We had many promotions, such as free Sunday browsing, to encourage uptake. We also recorded a 20% increase in SMS revenue, in local currency in the year.

We increased our capital investment to R724 million. Ahead of the advent of 3G services in Cameroon, we are modernising and expanding our WiMax network, particularly to drive growth in WiMax in the SME and consumer space.

There remains a great deal of uncertainty in the regulatory environment. We are preparing to renew our licence in February 2015 and are also applying for a 3G licence. We are still restricted from laying fibre, which is carried out by a separate state-owned infrastructure company, as well as being restricted from accessing the new WACS submarine cable. This limits our access to quality broadband.

A great deal of our focus in 2012 was on organisational development, improved governance and performance management. We now have a strong and competent middle management, which will be the growth engine of the Company going forward.

Outlook

The outlook for 2013 is positive. We are expecting good revenue growth, underpinned by our voice offering and an increasing contribution from data. We are expecting our subscriber base to expand to 8,3 million from 7,3 million. We are earmarking capex of approximately R697 million, however, this will increase significantly if we receive a 3G licence.

A snapshot of our performance

Delivery against strategic objectives

Creating and managing stakeholder value

• Strengthened our team and took steps to create an environment of accountability, equity and transparency.
• MTN Cameroon Foundation supported victims of the floods in the north, and won the Group president and CEO's award for 21 days of Y'ello Care employee volunteering initiative, during which we built a school in Waffango. We expect the Foundation to gain even more traction in 2013, with plans to roll out a number of other projects.

Creating a distinct customer experience

• Enhanced our network by extending our site numbers to 1 062 and modernising half the network.
• Consolidated dealers within regions.
• Launched new value proposition MTN One, where we dropped the headline tariff by 30%.
• Provided MTN Prestige loyalty cards, branded gifts and VIP airport lounge access to our top-tier customers.

Driving sustainable growth

• Data revenues (excluding SMS) increased 25% year-onyear in local currency.

Transforming our operating model

• Continued to drive competencies and the culture of the organisation. We now have a better understanding of what customers want and are able to offer better customer service.
• Signed an agreement for the sale of 827 towers to tower manager IHS. We are transferring ownership of 25% of these sites in early 2013.
• Managed to save 6% of budgeted operating expenses through effective cost management.

Innovation and best practice

• Offered MTN Prolongation - the first MTN operation to do so - in February 2012. This is an innovative credit advance solution which allows customers to be lent airtime, which is then recouped when they next recharge. There has been significant uptake with approximately 30% of our base using this service.
• Launched a number of innovative offerings including a new value plan which gives users a first call free after recharging.
• Implemented ST-Ericsson's capacity-optimisation technology, VAMOS in May. This allows us to deliver more calls from the same number of sites without compromising voice quality.