(formely M-Cell Limited) - Business Report 2003 - MTN Group

LOOKING AHEAD
The positive results of our established
operations together with the strong
performance and resulting reduced financial
pressure by MTN Nigeria, has encouraged us to
explore further expansion opportunities on the
continent as and when opportunities arise that
fulfil our key investment criteria. These criteria
include promising market potential, stable
regulatory, political and economic conditions, as
well as the prospects of achieving our minimum
financial hurdle rates in what we consider to be
strategic geographic locations. Given the limited
supply of greenfield opportunities, we expect
that new investments will be made mainly
through mergers and acquisitions.
The lifting, by the South African Reserve Bank, of
the investment ceiling from R750 million to
R2 billion per investment for South African
companies investing in sub-Saharan Africa, gives
the Group the required flexibility to use excess
cash generated in South Africa for further
expansion in sub-Saharan Africa.
Mobile telephony is highly capital-intensive.
Over the past year, we invested approximately
R4,2 billion in the Group’s operations, the
majority of it in network infrastructure. In the
coming year, we expect to spend slightly more,
most of it in Nigeria which still requires
significant infrastructural investment.
While our operations in Nigeria, Cameroon and
to some extent Uganda are still expanding their
networks, MTN South Africa reduced its capex
to revenue ratio and cumulative capex per
subscriber to a commendable 8% and
R1 845 respectively. This has been achieved
through tight controls over capital expenditure
and the use of network optimisation tools
without sacrificing network and call quality.
However, in the long-run we are of the view that
a capex to revenue ratio of around 10% would
be sustainable.
ORGANISING FOR GROWTH
Of all the measures taken to ensure continuing
prosperity in a highly competitive environment,
the nurturing of our human capital remains
uppermost. At present approximately 6% of our
staff budget is spent on training and
development. We have also developed our own
management training programmes in close
cooperation with the Gordon Institute of
Business Science in South Africa and the Institute
of Management Development in Switzerland.
In addition, we are in the process of restructuring
the Group in order to manage our growing
international businesses more efficiently and
to leverage our skills base and purchasing
power across Group companies. As part of this
reorganisation, Ms Santie Botha has been
appointed as Executive Director Marketing to
provide a consistent brand and marketing
strategy across all operations and countries.
CONCLUSION
I wish to thank my colleagues on the Board for
their guidance, and members of staff for their
loyalty, hard work and dedication. At the end of
my first year as Chief Executive Officer I believe
more firmly than ever that our flourishing Group
has a bright future ahead of it.
Phuthuma Nhleko
Group Chief Executive Officer
19 June 2003
MTN BUSINESS REPORT 2003
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