West Africa investor event 13 and 14 May Agenda 01 West Africa investor event Ghana presentation 13 and 14 May 2014 West Africa investor event //13 and 14 May 2014 WEST AFRICA INVESTOR EVENT Serame Taukubong, CEO – Ghana Agenda 01 Overview 02 Licences and network 03 Strategy 04 Distribution and marketing 05 Financials 06 Looking ahead 2 2 West Africa investor event //13 and 14 May 2014 3 West Africa investor event //13 and 14 May 2014 Overview Say goodbye to the briefcase and say welcome to the tablet. Welcome to the Bold New Digital World. Country overview Population 26m Market sizing 31.8m (2016) Penetration 96% Economics GDP per capita USD 1,838 Inflation (YOY) 14.5% (GIA, Mar ‘14) Commercial banks' prime lending rate 27% (Dec ‘13)) Exchange rate 2.18 (Dec ‘13) (LC/USD) 2.84 (Apr ‘14) Demographics English, several local Language languages Religion Christian and Muslim 4 4 West Africa investor event //13 and 14 May 2014 5 West Africa investor event //13 and 14 May 2014 Market overview Political Multi-party democracy system since 1992 Six consecutive elections; change of power twice Stable and peaceful environment Economic GDP Growth: 7.9%(CIA Facts, Dec 13) Gross International Reserves: US$4.7 billion (BoG, Mar 14) (2.6 months of imports) Unstable exchange rate, the Ghana cedi depreciated over 17.6% in Q1 of 2014 compared to about 2% in Q1 of 2013 VAT increased by 2.5% to 15%, resulting in a total VAT/NHIL of 17.5% Communication Sector Contribution to Inflation: 5% (GSS Mar 14) General cost of doing business has increased Regulatory Mandatory SIM Registration from March 3, 2012 Mobile Number Portability - July 7, 2011 International Call (Ghana Termination) levy 6 cents from 1 Jun 10 (Minimum charge 19 cents) Issue of 3 WiMax licences to operators expected Stringent site build permit guidelines introduced 5 Mobile network operators – March 2014 KASAPA/ MTN TIGO VODAFONE AIRTEL Expresso Globacom Launch/ Re-launch 1996 (Spacefon) 1992 (Mobitel) (OneTouch) 1997 (Zain) 1998 (Celtel) date 2007 (re-launch) 2006 (Tigo) 2009 (re-launch) 2010 (re-launch) 2010 (re-launch) 2012 Glo (launch) Subscribers 13.05m 3.48m 5.18m 3.11m 0.91m 1.40m Market share 49.57% 13.22% 19.70% 11.83% 0.35% 5.33% • MTN Zone • Tigo Cash • Vodafone • Smart Zone • Free Night • Internet Modem • Mobile Money • Tigo Insurance World – • (Payback/F&F/ Calls Offers • Magic Voice • Smart Talk Roaming Free Night • Bonus on • Me2U/EasyShare • MTN Pay4me • Unlimited Service Calls) incoming • Data Bundle • Caller Tunes Internet • Promo – • Me2U • Internet • SMS Bundle • CLIR/So CLIR • TIGO SOS – Vodafone Red, • Airtel Insurance Modem Offers • Voice bundle • DSTV Mobile negative talk Double Value, • Magic Voice • Promos –(Good • Call me back time 1Gh for your • Promos -(Airtel morning Ghana, Initiatives • Me2U • Tigo my pocket, double talk chaw, too GISTA, Big 5, • Data Bundle control- (PAYG bonus on much, SMS Bounce, Glo Offers top up on PM) recharge Bunch, Kasa Green Card, • SMS Bundle • Blackberry • ULCH Sales saa) Bounty) offers Service • Blackberry • Airtel Money • Blackberry • SMS Bundle • Vodafone • Caller Tunes Service Offers Broadband • Internet Modem • 3.5G • Promos (Free Offers Bonto) • 3.5G 6 6 West Africa investor event //13 and 14 May 2014 7 West Africa investor event //13 and 14 May 2014 Licences and network Say goodbye to the briefcase and say welcome to the tablet. Welcome to the Bold New Digital World. Licences Period 2G granted in 2004 – 2019 (Further renewable for 10 years) Spectrum –900MHz and 1800MHz 3G granted in January 2009 (15 years) 2X10MHz plus additional 2X5 MHz International Gateway licence Upfront fees 2G - USD 22.5million fully paid over 6 years ended Dec 2009 3G – USD 27.0 million paid on issue of licence Other fees Regulatory fee – 1% net revenue quarterly Ghana Investment Fund (development of telecommunications in rural areas) – 1% net revenue annually Coverage 2G Year 8 of licence required active presence in all regions of Ghana 3G Coverage in Metropolitan, Municipal and district capitals existing at the time the licence was granted, within 5 years of operation 2G coverage – 45% 3G coverage – 18% 8 8 West Africa investor event //13 and 14 May 2014 9 West Africa investor event //13 and 14 May 2014 Network nodes and sites (operational) • Three state of the Art Switching Centres in Accra & Kumasi providing world class switching and data facilities • Advance IP/MPLS & Internet POP network • 2,306 2G Sites on Air • 249 Collocated sites through Infrastructure sharing • 1,054 Cities & Towns covered • 33 BSC, 10 RNC, 6 HLR, 6 MBC, 21 MGW, 2 SGSN & 2 GGSN 9 2G network rollout All 10 regions and Districts covered Widest Nationwide Coverage Population Coverage of 79.5% Geographic Coverage of 43.5% Best Quality network 10 10 West Africa investor event //13 and 14 May 2014 11 West Africa investor event //13 and 14 May 2014 3G network rollout • There are currently 1,114 3G sites on air • A total of 175 3G sites were added to the network in 2013 • Geographic Coverage of 20.6% 11 Strategy Say goodbye to the briefcase and say welcome to the tablet. Welcome to the Bold New Digital World. 12 West Africa investor event //13 and 14 May 2014 13 West Africa investor event //13 and 14 May 2014 Strategy Grow faster than our competitors • Entrench MTN Ghana the market leader (number one, across all areas) • Consistent delivery is key Deliver the best service in Ghana • Be the definitive benchmark of service in Ghana – across all industries Attract and keep the best talent • Attract the best employees and keep them • With strong alignment of our Values & Vital behaviours Do business with integrity • Doing what we say we will do, ALL the time • Brand – what people say about you when you’re NOT in the room 13 Management team Serame Taukobong Chief Executive Officer Hendrik Vorster Nigel Williams Abbad Reda Eric Nsarkoh Chief Technical Chief Financial Chief Information Sales & Distribution Officer Officer Officer Executive Amma Benneh Cynthia Lumor Jemima Kotei Amposah Rahul De Corporate Services Customer Care Human Resources Chief Marketing Officer Executive Executive Executive TBA Yuvi Rajha William Tetteh GM, Enterprise GM, Business Risk GM, Capital Projects Business Management 14 14 West Africa investor event //13 and 14 May 2014 15 West Africa investor event //13 and 14 May 2014 Distribution and marketing Say goodbye to the briefcase and say welcome to the tablet. Welcome to the Bold New Digital World. Distribution network Distribution strategy Efficient distribution channels spread across the Use of… 10 regions of Ghana: – 9 Territorial Distributors Large Scale Distribution Model – 48 MTN branches For effective – 32 connect stores and efficient customer – 8 web based and wholesale dealers reach Drive through… – Over 600 LAS & RAS to deepen rural reach Distributor route to market Direct Sales Channel Rollout Trade Automation Solution to support visibility (Including B2B) on distribution footprints and product presence Strategic thrust… Use MTN branches to deliver enhanced customer service Dominate POP (Availability and Weighted Distribution) Aggressive acquisition drive to defend and grow market share (MNP & Gross Adds) Rural acquisition campaign DSR using TAS to sell 16 16 West Africa investor event //13 and 14 May 2014 17 West Africa investor event //13 and 14 May 2014 Value propositions - March 2014 Offer Customer benefit Target segment Mobile Money Send and receive money, pay bills, shopping, top-up airtime High and Medium Value Aben Wo Ha Differentiated plans to enjoy low calls, internet and IDD rates. Low charges on-net, off-net, Mid to Low value data and IDD calls. MTN Protect Secure Your Vital Info. Track your lost or stolen device Medium to High value (High-end device users) Magic Voice Offers subs to opt for 3 distinctly funny voices: Animated Cartoon’s Voice, the Husky King’s Mid to Low value Voice and the Shrill Female Voice 3.5G Internet at fast speed Medium to High value Caller Tunes Entertain your callers even before you answer their call, with tunes All MTN Pay4me Make on-net calls and receiver pays Low Value DSTV Mobile Watch DSTV any time, anywhere on your mobile phone Medium to High value (High-end device users) Call me back Get in touch even if you do not have any money in your MTN account Low value CLIR/So CLIR Keep your phone number anonymous when you make calls High value Me2U Ability to share airtime Mid to Low value Blackberry Service Offers users of Blackberry handsets value-added perks such as BBM, Email, browser, etc Medium to High value SMS Bundle offers Cap the amount you pay for SMS Mid to Low value Data Bundle Offers Cap the amount you pay for Data Medium to High value Just For You A unique offer that rewards all customers based on their tenure, usage, telecom lifestyle Mid to Low value amongst other behavioral factors Go Rio Points-based promo to reward customers with Handsets, Flat screen TVs, Cars and tickets to All watch World Cup in Brazil MTN Zone More talk-time with call discounts as high as 95%. Mid to Low value Data - ISP Subscribers 6,739,391 (Dec 13) Customers Current Products Lease lines – Local & International (including Global MPLS) Dedicated Internet Service Calling Sol. – Hosted PBX/ISDN, Audio Conference, Directory Services APN/VPN over mobile Data Centre services – Co-location and Cloud based services Security – Vehicle Tracking 18 18 West Africa investor event //13 and 14 May 2014 19 West Africa investor event //13 and 14 May 2014 Financials Say goodbye to the briefcase and say welcome to the tablet. Welcome to the Bold New Digital World.