MTN GROUP LIMITED

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 General Overview
MTN Group Limited
Telecommunications Industry
Products:
Key Drivers:
- Mobile Financial Services
- Smartphone adoption in - Data
emerging markets - Mobile voice
- Technology - From voice to - Digital
digital - Enterprise services
- Regulation – always changing,
country specific & inconsistent
- Increased competition
- Customer expectations

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 MTN GROUP LIMITED
Consumer Bargaining
Rivalry intensity
Power
- Telkom SA SOC Limited
- Vodafone Group Plc - Consumer (high)
- Bharti Airtel Limited switching costs
- Emirates Telecommunications Group - Large and Informed
Company PJSC customer base
- Price pressures

Supplier Bargaining Power New Entrants

- Low. - High barriers to entry

- Vertical integration to avoid disruptions in - Existing incumbents are well
the supply chain. established and globally recognized
- Independent Communications Authority of - Large capital required
South Africa (Icasa) - Limited Spectrum - R&D and Government regulations.
- over-the-top (OTT) players
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Strategy and Corporate Governance
BRIGHT STRATEGY –Introduced in 2017.
Group CEO – Rob Shuter
Group CFO– Ralph Mupita (CFO of the International Advisory Board
year 2019)
- Former statesmen
- Improve compliance

MTN Board of directors

- Non-executive directors(15) Notable Mentions

- Executive directors(2) Mcebisi Jonas
- Female Representation (4) Thabo Mbeki
- White Members(4) Lamido Sanusi
- Non-white(13)

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 MTN GROUP LIMITED
Key Ratios 2016 2017 2018

Debt to EBITDA 4.01 3.16 3.24

Net Debt to EBITDA 1.2 1.3

EBITDA Interest Cover 2.73 3.68 4.67

Cash from Operations / EBITDA 136.64% 81.96% 83.62%

Profit after Tax. -R 3,103, 000,000 R4,541, 000, 000 R9,578, 000, 000, 000

CAPEX Intensity 23.80% 23.70% 19.30%

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Debt Exposure

- Increased Domestic currency

denominated debt

- Foreign exchange risk

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 Guarantor

Issuer

Subsidiary Guarantors

Issued notes:

- Listed on the JSE

- Guaranteed by
the BESA
Guarantee Fund
Trust

Unlisted notes: not

guaranteed
Every MTN
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Group
 ZAR 20 000 000 000 Medium Term Note Programme
Seniority Issue Amount Issue Date Coupon Rate Maturity Term
(000' Rs) Date
Senior 1 500 000 13-Jul-17 ZAR-JIBAR-SAFEX + 1.8% 13-Jul-20 3
Unsecured
Senior 1 000 000 13-Jul-17 ZAR-JIBAR-SAFEX + 2% 13-Jul-22 5
Unsecured
Senior 454 11-Oct-17 ZAR-JIBAR-SAFEX + 1.75% 11-Oct-20 3
Unsecured
Senior 529 11-Oct-17 ZAR-JIBAR-SAFEX + 1.95% 11-Oct-22 5
Unsecured
Senior 1 017 000 11-Oct-17 ZAR-JIBAR-SAFEX + 2.2% 11-Oct-24 7
Unsecured
Senior 250 04-Jun-18 ZAR-JIBAR-SAFEX + 1.49% 04-Jun-21 3
Unsecured
Senior 600 04-Jun-18 ZAR-JIBAR-SAFEX + 1.74% 04-Jun-23 5
Unsecured
Senior 900 04-Jun-18 ZAR-JIBAR-SAFEX + 2.02% 04-Jun-25 7
Unsecured
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 Investor Protection
Bond Covenants
- Events of default – Cross default
- Change of ownership/control
- Regulated by the Company’s act of 2008.

Additional Protection
-Floating rates
- One negative pledge: Increases the flexibility of
company to operate.
-Rated Bonds: Added credibility. S&P 2016:Junk
2019:BB+
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 In Conclusion…
 Weaknesses.
Liquidity position is compromised. Hence, it has to rely debt very often.
Hence the revolving loan and high debt ratios.

 Opportunities
Artificial Intelligence and global network services.
Growing Telecommunication industry. A lot of value to unlock.

 Threats
Price pressures. Data must fall
Power shortages affecting infrastructure- i.e. SA has been experiencing load shedding.
Competition

Regulation and Compliance issues. Exchange rate risk.

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 …
Strengths
- Great and competent corporate governance
- Powerful brand and visibility
- First mover advantage- emerging markets. This has led to a great success of the
business.
- Expected to meet all its debt commitment in the next 3 years
-Resilient. Only provider in South Africa that had a successful 2018.

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