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Our executive chairman’s report
continued
As we make the far-reaching changes necessary to
reclaim the Group’s position as a formidable
competitor and pioneer in our markets, we recognise
the importance of striking the right balance between
driving performance and ensuring the health of our
organisation. The events of the last 18 months have
understandably put the organisation under
significant strain in a number of areas.
This is likely to continue in the short term. However,
the transformation plan was developed in a
consultative way and should support the resolve
and resilience that will be required to ensure the
Group’s normality, enabling it to meet its vision.
Moreover, we established a Group transformation
office to support our people through the change and
ensure the effective implementation of all related
initiatives and enablers. This office reports directly
to a Group transformation board, which I chair.
We shall also continue to focus on our people
management initiatives as a matter of course. The
progress made in employment equity in South Africa
and elsewhere in terms of the relevant localisation
and diversity requirements are an important aspect
of our employee value proposition and ethos of the
Group.
Looking beyond the immediate need to transform,
the opportunities that derive from our strong position
are compelling and the Group has enormous scope
for growth in the medium to longer term. We are
online with the 240,4 million customers across our
base and we have extensive distribution platforms
to reach them. Our markets have attractive growth
profiles given their relative underdevelopment and
the extraordinary power of ICT to accelerate socio-
economic advances. Our portfolio of new revenue
streams is already plugged into this potential, and
we will accelerate their development in the years
ahead.
Our markets
have attractive
growth profiles
given their
relative under-
development.
Our lifestyle and mobile financial services offerings
supported growth of 44,2% in digital services
revenue in 2016. Most notably, we expect
MTN Mobile Money to be a significant revenue
driver in our medium-sized markets as the service
reaches critical mass. The number of customers of
the service has grown to 41 million across the Group,
with the number of 30-day active customers up
55,3% to 15,4 million across 15 countries. In addition
to financial services such as remittances, we
launched our micro-lending and savings offerings
MoKash in Uganda and Zambia and Ayo, our
insurance joint venture with MMI Holdings, in
Uganda.
Our e-commerce offerings recorded mixed results
in the year. We experienced slower growth in the
Africa business mainly due to Nigeria’s weak
economy, somewhat offset by our entry into new
markets like Morocco and Ivory Coast. The Middle
East business posted double-digit monthly growth
in revenue and customer numbers across all
business lines. Our Iranian e-commerce business,
which is the market leader, gained significant
momentum based on favourable demographics and
the economic revival of that country.
In our Enterprise Business Unit (EBU), the tough
economic environment prompted customers to
optimise operational efficiencies, resulting in the
consolidation of accounts. In line with the Group
strategic objective to accelerate growth in this area,
we appointed a new executive head of Group EBU.
To leverage the Group’s infrastructure base more
effectively, on 1 February 2017 we exchanged our
51% share of Nigeria Tower InterCo B.V. (the parent
of Nigerian telecoms tower operator INT Towers
Limited) for an increased stake, from approximately
15% to approximately 29%, in IHS Holdings Limited
(IHS). IHS is the largest independent tower operator
in Africa and Middle East with over 23 000 towers.
The transaction has enabled MTN to simplify the
ownership structure and diversify our exposure to
tower infrastructure across the IHS Group. MTN will
no longer equity account our INT joint venture from
1 February 2017 onwards.
Our commitment to the sustainable development of
the markets we serve is an important aspect of the
responsibility we assume as a significant corporate
citizen of the countries in which we operate. During
the year, we successfully extended our black
economic empowerment scheme in South Africa
with the MTN Zakhele Futhi share offer, which gave
MTN Group Limited
Integrated Report 2016
26