MTN Uganda

		Launch date October 1998 MTN shareholding (%) 96 Market share (%) 52,5 Mobile penetration (%) 41 Population (million) 36,1 Forecast market size in 2014 (million) 27
Mazen Mroué MTN Uganda CEO

2012 performance

2012 was a good year for MTN Uganda, in which we increased revenue and EBITDA as well as data's contribution. This performance was driven by our better management of minutes of use (MOU) per subscriber as well as effective tariffs, after the sharp drop in market rates in 2011.

In a highly competitive environment, with seven network operators, MTN Uganda maintained its leading position in subscriber numbers and market share. By year end, we had 7,7 million subscribers and total market share of 53%, up from 52% in 2011. This was despite a regulatory requirement to register the personal details of all users, which led to a 1% decline in the overall market's subscriber base. By year end, MTN Uganda had registered more than five million subscribers, or around 74% of the base. We continue to actively encourage registration by all users.

Data revenue grew 86%, as the number of customers using our network for data transmission expanded. We also benefited from improved network performance, increased 3G coverage and speeds of up to 21mbps. The effective use of international route diversity via our access to two submarine cables also supported this growth, as did sustained marketing campaigns leveraging the theme "The UN has declared that Internet; access is your right" as well as improved coordination of our corporate offering with simplified communication.

Furthermore, there was a notable improvement in the performance and uptake of MTN Mobile Money, with revenue rising 96%, lifting its contribution to annual revenue to 9%.

Uganda has been through a sustained period of high inflation, averaging 18,7% in 2011 and 14% in 2012, which has had a significant effect on MTN Uganda. However, we were highly focused on managing operating costs in the year, and managed to limit the increase in costs to 13% in local currency.

Customers also benefited from network expansion. We spent more than R435 million in capital investment, focusing on optimising the network, upgrading existing infrastructure and rolling out new 3G sites and extended fibre backbone.

Outlook

MTN Uganda's data proposition is solid and we have established the groundwork to increase the contribution of data to overall revenues in 2013. In the year ahead, we will roll out LTE and deploy WiFi hotspots, and so give Ugandans world-class and universal access to the internet. We will also continue upgrading the 3G network and extend services to more remote areas. We are continuing to work actively to register all subscribers' personal details in line with regulatory requirements.

We anticipate that the new telecoms bill, which increases the telecoms levy to at least 2,0% of turnover from 1,0%, will come into effect in 2013. MTN Uganda expects to add another 800 000 subscribers to the network. The market, however, remains competitive, with the country's eighth licensed telecom provider launching services in January 2013.

A snapshot of our performance

Delivery against strategic objectives

Creating and managing stakeholder value

• Continued to drive employee satisfaction and motivation.
• Encouraged team work with more engagement and communication to improve operational efficiency and increase productivity.
• Positive results from the Group culture audit survey, which showed that employees believe and are incentivised by MTN's focus on community development, performance management and training.
• Voted the "best training and development employer" of the year by the Federation of Uganda Employers.

Creating a distinct customer experience

• Improved our product development cycle, resulting in faster first-to-market offerings of relevant and innovative products and services.
• Increased data customer numbers to 1,1 million and 3G network usage through the launch of 21,6 mbps attractive bundles and simplified communication.
• Leveraged social networks more effectively to better engage the youth and enhance customer awareness.
• Introduced Crazy Fridays and Overload promotions with a customised MTN Zone offering.
• Launched MTN Business to provide converged communications solutions.
• Introduced a self-service option which reduces the need for agents to deal with elementary queries and improves our answer rates and service levels.

Driving sustainable growth

• Recorded continued strong growth in MTN Mobile Money with 46% increase in subscribers, bringing the number of people accessing this service to 3,5 million. We were supported by the addition of new services such as electricity payments and global transfers.
• MTN Uganda was awarded "best mobile money service provider in Uganda" by the KACITA business association.
• Added another 600km of fibre backbone, bringing the fibre system to 2 800km, which allows high-speed data connectivity and a wider backbone for national 3G coverage.

Transforming our operating model

• Concluded a deal to sell 962 of our existing network sites to ATC Uganda for US$175 million, in line with the Group objective to optimise our assets through infrastructure sharing.
• Participated in implementing the Group's new procurement toolkit, resulting in a reduction in costs and an overall improvement in the supply chain process.

Innovation and best practice

• Re-engineered the MTN Zone dynamic tariffing proposition to better manage customer satisfaction and provide more value for money with optimised traffic growth. By year end, more than 70% of our subscribers were on MTN Zone.
• Benefited from the experience of MTN Ghana in implementing the sale of our towers by adopting best practice and ensuring a smooth transition to a leased tower model.