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Risk
rank^ Risk name and impact if not managed
Mitigation and opportunities
5 Political and economic risk in our keymarkets:
SouthAfrica, Iran and Nigeria
Despite recent improvements, political and
economic conditions in South Africa still pose a
risk of a further downgrade of the sovereign credit
rating. This in return could impact MTN’s cost of
funding and the performance of MTN South Africa.
Deteriorating relations between the US, Saudi
Arabia and Iran may lead to further sanctions
and/or pressure on the Iran nuclear deal, which
in return may negatively impact MTN’s interests
in Iran.
Furthermore, political instability and sanctions in a
number of MENA countries increase the risk of
profitability fluctuations and uncertainty in respect
of fund repatriation.
•
•
Ensure sufficient levels of committed funding
facilities at group level to respond to market
stress scenarios.
•
•
Ensure appropriate mix of fixed and floating
rate funding.
•
•
Mitigate forex risks through measures described
in risk number 1.
•
•
Continuously monitor developments across
MENA and perform ongoing scenario and
sensitivityanalyses tonavigate difficult
conditions.
•
•
Maintain the group’s approach of self-funding
of MENA operations and maximise cash
repatriations.
•
•
Closely monitor compliance to sanctions policies.
•
•
Ensure continuity of operations, protect staff
and assets through strong business continuity
management measures.
6 Spectrum cost and availability
Non-availability of adequate spectrum has
a direct impact on our quality of service and
ability to deliver on our dual-data strategy.
An increased cost of spectrum impacts the cost
of our products and services and puts pressure
on margins.
•
•
Co-ordinate and liaise closely with regulators
for acquisition of spectrum in line with
recently refined spectrum plan.
•
•
Continue to explore ways to enhance
spectrum planning and usage optimisation.
•
•
Ongoing cost benefit analysis of spectrum
acquisition focusing on products/services
and their pricing.
7 Ability to successfully execute large group
strategic and change programmes
A number of large programmes are currently
being executed as part of the implementation
of the BRIGHT strategy. An inability to
successfully implement these programmes or
programmes not delivering desired results will
directly impact business objectives.
•
•
Careful monitoring and oversight from the
group transformation board and group
operations committees.
•
•
Establishment of a project management
office at group level.
•
•
Independent programme assurance led by
the business risk management function.
8 Returns on capex deployed
With the rapid pace of development of new
technologies and competition from OTT
players, the focus of the telecoms industry is
to maximise returns on capital deployed. If
innovative ways of sweating capital deployment
are not identified and implemented, margins
may decrease continually.
•
•
Ensure that capex is deployed in areas with
optimal returns.
•
•
Reduce capex intensity year-on-year.
9 Optimisation of investment portfolio
Decreasing margins in the telecoms industry as
well as economic and political challenges in
certain markets place pressure on the investment
portfolio. Inability to effectively deal with non-
performing investments may impact the group’s
competitiveness and returns to shareholders.
•
•
Continuous monitoring of investment returns.
•
•
Implementation of an effective capital
allocation policy.
•
•
Investment and/or divestment strategy.
10 Increasing cyber and information risks
An increase in cyber attacks worldwide and
new hardware and software vulnerabilities
could compromise our networks, systems,
customer information and corporate
information.
•
•
Continue implementation of the group cyber
approach.
•
•
Continue to strengthen the information security
function at group and opco level.
•
•
Enhance security monitoring, threat intelligence
and incident management capabilities.
^ In 2017 we reviewed our risk universe, which resulted in a change in the categorisation and nomenclature of risks.Therefore a direct comparison
of risks disclosed in 2017, with those reported in 2016, is not possible.
Top risks to value creation
continued
24
MTN Group Limited
Integrated Report 2017