MTN Sudan *

		Launch date September 2005 MTN shareholding (%) 85 Market share (%) 31,8 Mobile penetration (%) 73 Population (million) 34,4 Forecast market size in 2014 (million) 28,5
Muhammad Ziaullah Siddiqui MTN Sudan CEO

2012 performance

MTN Sudan delivered a strong performance in a very difficult economic environment. We managed to increase both subscriber numbers and market share through our consistent value proposition as well as our continually expanding and better quality network.

Competition remains tough with three mobile operators and aggressive tariff reductions and promotions by the competition. The market also has a very large multiple-SIM segment.

Despite challenges, the subscriber base increased by approximately 2,2 million new subscribers and total revenue in local currency grew by 28%. Data revenue significantly increased in the period, with the number of data users rising to more than 1,7 million from 744 000 in 2011. We were also able to increase the EBITDA margin from 22,4% to 27,7%. This is a good result given significant cost pressures.

Sudan suffered a sharp depreciation of its currency, high inflation and a shortage of foreign exchange during the year. As a result there was a large revaluation loss on foreign currency debt. This also negatively affected capital expenditure as infrastructure imports are denominated in foreign currency, making them significantly more costly.

* Not including South Sudan.

An increase in security issues in Darfur and the southern region was a key challenge for the rollout in those areas. Many of our sites were affected by the conflict, where they were either damaged in attacks or were not regularly maintained due to lack of access. Despite this, we delivered on our aggressive capital expenditure plans, successfully rolling out 332 2G sites and 146 3G sites and swapping 469 sites, mainly in Khartoum and surrounding areas.

We continued to work closely with the regulator on our plans to register the personal details of all of our subscribers. There is no deadline for this but the majority of our subscribers are already registered.

Outlook

There are encouraging signs of a resolution of the conflict with South Sudan, which should also assist with foreign exchange inflows and positively impact on the economy In 2013, we expect to increase our subscriber base by approximately 17% to around 9,2 million. We also plan to invest R774 million into our capital expenditure programme for 2013. We expect that the pace of growth in data will increase and that the data share in revenue will increase significantly. Mobile number portability will be launched during the year.

A snapshot of our performance

Delivery against strategic objectives

Creating and managing stakeholder value

• Increased our engagement with employees and implemented a retention strategy aimed at retaining the top 20% of our people in particular. This is an effort to counter the effects of a wave of emigration by skilled and experienced Sudanese.
• Partnered with a major NGO in Sudan and conducted various "eye camps" all around Sudan, bringing back vision for around 50 000 people. MTN Sudan is the first and only organisation to undertake such an activity in the Darfur region.

Creating a distinct customer experience

• Modernised the network by rolling out 332 2G sites and 146 3G sites and swapping 469 sites in Khartoum and surrounding areas.
• Launched a customer retention programme to reduce churn value loss.
• Customer care was expanded to cater for the low value segment.
• Increased our distribution footprint and are working at improving our point of sale capabilities.
• Optimised our top 30 revenue sites to improve the experience of those customers who generate over 70% of our revenues.

Driving sustainable growth

• Expanded our data business, more than doubling data's contribution to revenue.
• Aggressive share of wallet strategies (tactical promotions) were adopted without compromising on ARPU to gain market share and improve revenues.
• Bulk SMS, End of First Call announcement, Balance Enquiry, Recharge notification and several other IN-based instant notifications were used to interact and communicate with customers. This greatly improved the adoption rate of various products and promotions.

Transforming our operating model

• Many cost optimisation initiatives were launched. These included site electrification to reduce diesel consumption, generator rehabilitation and local packaging of SIMs.

Innovation and best practice

• Began work with vendors on managing rural capacity, which are micro BTSs.
• Created a dedicated profile for the low ARPU/activity customers. Through this profile we targeted customers with segmented offers and promotions and strengthen their BTL communication techniques by using instant notification messages. As a result, the adoption level of MTN promotions increased from 17% to 33% and the churn rate reduced from 12% to 9% for this segment.
• Engaged with customers with online competitions using social media.
• Mobile kiosks have created more brand visibility and an increase in the point of sale around Sudan.