MTN - MTN Group Limited - 16TH Annual General Meet22 Jun 2011
MTN
MTN                                                                             
MTN - MTN Group Limited - 16TH Annual General Meeting - Business update and     
management of international operations                                          
MTN Group Limited                                                               
(Incorporated in the Republic of South Africa)                                  
(Registration number 1994/009584/06)                                            
(Share code MTN)                                                                
(ISIN ZAE000042164)                                                             
("MTN" or "the Group")                                                          
16TH ANNUAL GENERAL MEETING - BUSINESS UPDATE AND MANAGEMENT OF INTERNATIONAL   
OPERATIONS                                                                      
1.   BUSINESS UPDATE                                                            
At the Annual General Meeting to be held later today, Chief executive and       
president, Sifiso Dabengwa will make the following comments regarding the       
Group`s performance for the first four months of 2011 in comparison with the    
same period for 2010:                                                           
The majority of the markets in which MTN operates have continued to show strong 
subscriber growth despite increased competition. The Group increased its        
subscriber base by 7.4 million subscribers or 5% to 149 million customers for   
the four months to 30 April 2011 and has subsequently passed 150 million mobile 
subscribers across its 21 operations.                                           
Group revenue improved only marginally mainly as a result of the continued      
strengthening of the rand against the USD and increased competition. Due to     
political unrest, operational performance has been impacted negatively in Cote  
d` Ivoire and to a lesser extent in Yemen and Syria. The average rand/USD       
exchange rate to April 2011 was R6.86 compared to R7.48 in the same period last 
year. Had there been no movement in the exchange rate, revenue and earnings     
before interest, tax, depreciation and amortization ("EBITDA") would have been  
meaningfully higher. Total revenue was still driven primarily by voice revenue  
however non voice revenue contribution continues to increase.                   
Group EBITDA margins were up when compared with the same period last year but in
line with the overall margin at 31 December 2010. Margins in the majority of    
MTN`s key markets remained robust. This was primarily due to the benefit of     
ongoing cost control and efficiency initiatives despite the negative impact of  
inflationary pressures and higher fuel costs. However, margins are under        
significant pressure in markets experiencing high levels of price competition.  
MTN`s spend on capital expenditure was lower than anticipated to the end of     
April mainly due to slower than planned rollout in Nigeria, South Africa and    
Ghana. However, a significant amount of the capital expenditure originally      
anticipated for the period has already been committed. It is expected that these
projects will catch up in the second half of the year bringing the full year    
capital expenditure substantially in line with the original guidance.           
MTN South Africa sustained a sound financial performance in a relatively mature 
market as data maintained good momentum. The operation`s EBITDA margin continued
to show a healthy trend upward mainly due to lower selling and distribution     
costs and to a lesser extent the containment of network operating costs. It is  
expected that the registration deadline on the 30 June 2011 will result in some 
disconnections. As at 22 June approximately 93% of the prepaid and 98% of the   
postpaid base had been registered.                                              
MTN Nigeria revenue growth slowed marginally as increased usage offset, in part,
the decrease in tariffs implemented as part of a revised package offering in    
February 2011. EBITDA margins remained robust at the same level as those        
reported at 31 December 2010, despite the various competitive and operational   
challenges.                                                                     
MTN Irancell continued to deliver a solid performance growing local currency    
revenue in the high 20 percent levels when compared to the same period last     
year. EBITDA margins remained similar to those reported at 31 December 2010.    
MTN believes that its current initiatives place it in good stead to take        
advantage of value accretive opportunities while mitigating the various risks it
faces. MTN will continue to leverage its scale, operational capability and      
intellectual capacity in an industry which has become more competitive as it    
matures and evolves.                                                            
2.   International operation                                                    
The board has decided that the formation of a formalized subsidiary company     
board for the international operations will not be progressed at this point in  
time. This follows their review of the work completed by the sub-committee of   
the board appointed to investigate the matter.                                  
The information in this Business Update has not been reported on by the Group`s 
external auditors.                                                              
Fairland                                                                        
22 June 2011                                                                    
Sponsor                                                                         
Deutsche Securities (SA) (Pty) Ltd                                              
Date: 22/06/2011 14:43:16 Produced by the JSE SENS Department.                  
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