a brief analysis of mtn group

Business

MTN is a pan-African leading mobile telecommunication operator with the strategic intent of ‘Leading digital solutions for Africa’s progress’. Inspired by their belief that everyone deserves the benefits of a modern connected life, they provide a diverse range of

• voice,
• data,
• fintech,
• digital, enterprise,
• wholesale, and
• API services to more than 272 million customers in 19 markets.

Established in South Africa at the dawn of democracy in 1994 as a leader in transformation. Since then, they have grown by investing in sophisticated communication infrastructure, developing new technologies and by harnessing the talent of their diverse people to now offer services to communities across Africa and the Middle East. MTN Group Limited is a publicly owned entity whose shares are traded on the JSE with a market capitalisation of around US$12 billion. MTN strategy is to build the largest and most valuable platform business with a clear focus on Africa.

Brands

​Below an image showing some of MTN's Group main brands and investments. South Africans are sure to recognize several the brands in the image below.

Key Data

MTN Income Statements

Sales  per business - break down MTN revenue sources

​MTN Group sales per business break down by activity as follows: mobile telecommunication is the biggest revenue contributor 73,5% as 2021, following by digital & fintech and interconnect and roaming, while sale of cell phones and accessories contribute 5,4%.

MTN - Price fluctuations

5 years price summary

1000 trading days - MTN price distribtion

Monthly MTN stock
price fluctuations

Last 15 Months
MTN stock Returns 

Median Price,
RSI & ROC

Yearly MTN
​stock price
fluctuations

Valuation

​PE Ratio vs competitors: MTN is good value based on its Price-To-Earnings Ratio (11.0x) compared to the peer average (18.5x). Industrial average PE ratio is currently at 14.5x, MTN PE ratio is well below industrial and its competitors. We can conclude that base of historical data MTN is slightly undervalued compared to its fair value.

Opportunities

​There is a structurally higher demand for data services and accelerating transaction values in fintech businesses. To support this, MTN Group is investing in the coverage, capacity and resilience of their networks, as well as the scaling of their platforms. They are increasing investment in the networks to R34.4 billion. MTN expect capex intensity to decelerate as the business grows, with Group capex intensity anticipated to reduce in the range of 18% to 15%. They have enhanced their medium-term guidance, raising our targets for Group service revenue growth and returns, in turn creating shared value.
781m (72%) people in SSA still not connected to mobile internet SSA mobile internet users to grow to 474m by 2025 from 303m in 2020 ~46% of Africa’s population is unbanked 95% of payments remain cash based with 90% of economies driven by small business. 

Segments - Group

At least mid-teens growth

• South Africa: mid-single-digit growth
• Nigeria: at least 20% growth Accelerate fintech platform growth
•  >20% service revenue contribution Holdco leverage
• ≤ 1.5x, faster non-ZAR deleveraging Asset realisation
• >R25 billion Adjusted RoE
• Improvement towards 25

Revenue VS PE Ratio

MTN GROUP
​FINANCIAL HEALTH

Management

Ralph Mupita(50Y)
5.5 years tenure è average management tenure is only 2.1 years
R51, 310, 000 salary
Mr. Ralph Tendai Mupita, BSc (Hons)(Eng.), MBA, GMP (Harvard), serves as Non-Executive Director of MTN Nigeria Communications PLC since April 13, 2017. He served as a Non-Executive Director at Scancom Plc since June 1, 2018 until May 25, 2021. He served as an Independent Non-Executive Director of Rand Merchant Investment Holdings Limited since March 31, 2018 until November 24, 2021.

He was Group Chief Financial Officer at Mobile Telephone Networks Holdings Limited until August 31, 2020 and has been its Executive Director since April 3, 2017. He is Group President and Chief Executive Officer of Mobile Telephone Networks Holdings Limited since September 01, 2020. Mr. Mupita had been Group Chief Financial Officer of MTN Group Limited since April 3, 2017 until August 31, 2020. He has been Executive Director of MTN Group Limited since April 3, 2017 and serves as its Group President and Chief Executive Officer since September 01, 2020.

He served as the Director of Special Growth Projects for Old Mutual Life Assurance Company (South Africa) Limited. He joined Old Mutual in 2000, he was seconded to Old Mutual Zimbabwe where he worked on a strategy project that led to re-structuring several functional areas within Old Mutual Properties (Zimbabwe). On re-joining Old Mutual South Africa in July 2001, Mr. Mupita looked after the strategy & business planning functions for Individual Life as a Strategy Director. He has extensive experience in the financial services sector, having had a distinguished career at Old Mutual over.
​
He worked on engineering and construction projects in SA. A key responsibility in this role was the Vision 2002 Programme. From October 2002 to October 2003, he became responsible for customer development for the retail middle market business (Personal Finance). From October 2003 to October 2004, he was responsible for Group Direct Sales (Old Mutual's direct marketing & sales business unit) as well as retail Customer Management.

He served as Managing Director of Old Mutual Unit Trusts since October 1, 2004. He served as a Non- Executive Director of UAP Holdings Limited since June 19, 2015 until January 31, 2017. He served as a Director of Kotak Mahindra Old Mutual Life Insurance Ltd. from May 1, 2011 to March 27, 2013.
Mr. Mupita holds B. Sc. Engineering (Hons), with construction projects in South Africa and completed his MBA at the University of Cape Town in 2000. He is a graduate of Harvard Business School's GMP programme and has also attended executive programmes at London Business School and INSEAD.

Ownership Structure

Top Institutional Holders