ANNUAL REPORT2017 ANNUAL REPORT 2017 REPORT ANNUAL Hello! You are about to CONNECT to a world of ingenuity, innovation and creativity 3 MT:AR ’17 MT:AR ’17 2 VISION Our Vision is to connect everyone to what is essential to them AMBITION Our Ambition is to offer an unmatched customer experience CORE VALUES Passion Professionalism Creativity & Innovation Agility & Speed Respect & Responsibility 1 MT:AR ’17 MT:AR ’17 2 CONTENTS 04 05 05 06 Group Key Financial Certificate Corporate Financial Figures by Company Profile Highlights Secretary 11 17 18 22 Board of Company Chairman’s Chief Directors Secretary Statement Executive Officer’s Review 28 33 40 42 Group Corporate Statement of Board and Executive Governance Compliance Board Committee Report Committee Attendance 43 48 52 62 Directors’ Highlights Business The Mauritius Annual 2017 Review Telecom Report Foundation 66 68 69 71 Independent Consolidated Consolidated Consolidated Auditor’s and Separate and Separate and Separate Report Statements Statements of Profit Statements of Financial or Loss and Other of Changes Position Comprehensive in Equity Income 72 74 128 Consolidated Notes to the Glossary and Separate Consolidated and of Terms Statements of Separate Financial Cash Flows Statements 3 MT:AR ’17 GROUP FINANCIAL HIGHLIGHTS FOR YEAR ENDED 31 DECEMBER 2017 OPERATING REVENUE - continuing operations Rs Million 9,800 9,700 OPERATING REVENUE 9,737 9,600 The Group revenue on continuing operations progressed by 4.3% during the year to reach 9,500 Rs 9.7 bn. Total revenue for the group stands 9,400 at Rs 9.9 bn. 9,300 9,340 9,200 GROSS PROFIT 9,100 9,160 is at Rs 7.3 bn and increased by Rs 33 m 9,000 on continuing operations during the year. 8,900 8,800 2015 2016 2017 CAPITAL EXPENDITURE has been at Rs 3.9 bn, representing 40% of GROSS PROFIT - continuing operations operating revenue. Rs Million 7,320 RETURN ON EQUITY 7,300 stands at 14%. 7,306 7,280 7,260 7,273 7,240 7,220 7,228 7,200 7,180 REVENUE GROWTH ON CONTINUING 3 2015 2016 2017 ACTIVITIES +4 % SHAREHOLDERS EQUITY Rs Million 7,800 7,600 CAPITAL 7,715 Rs 9 EXPENDITURE 7,400 Bn 7,412 3 7,200 7,000 6,800 6,600 GROWTH IN 6,602 NET ASSETS + 6 6,400 8 % 6,200 6,000 2015 2016 2017 MT:AR ’17 4 KEY FINANCIAL FIGURES FOR THE GROUP Continuing Total for the Group Operations 2017 2016 2017 2016 Rs Million Rs Million Rs Million Rs Million INCOME STATEMENT Operating revenue 9,737 9,340 9,892 10,067 Gross Profit 7,306 7,273 7,412 7,784 Net Profit 586 854 1,045 1,203 Earnings per share (Rs) 5.50 6.33 2017 2016 BALANCE SHEET Rs Million Rs Million Total Assets 18,643 18,583 Total Liabilities 10,928 11,171 Shareholders' Funds 7,715 7,412 Capital Expenditure 3,934 3,946 Net Asset Value per Share (Rs) 68.09 62.69 CERTIFICATE BY COMPANY SECRETARY CERTIFICATE BY SECRETARY REQUIRED UNDER THE COMPANIES ACT 2001 I certify to the best of my knowledge and belief that the Company has filed with the Registrar of Companies all such returns as are required of the Company under the Companies Act 2001 as at 31 December 2017. P. C. COLIMALAY Company Secretary 27 April 2018 5 MT:AR ’17 CORPORATE This is having a multiplier effect, opening up PROFILE new employment opportunities and enhancing the attractiveness of Mauritius as a global ICT destination for foreign investors by giving a new impetus to the ICT/BPO sector. It has also given rise to a new generation of techno-entrepreneurs. MAURITIUS TELECOM (MT) HAS BEEN AT THE FOREFRONT OF INNOVATION IN THE The Company is sparing no effort in contributing to FIELD OF ICT, BREAKING NEW GROUND the transformation of Mauritius into a smart island, AND OPENING UP NEW OPPORTUNITIES acting as one of the engines of its growth towards becoming a high-income economy. FOR THE MAURITIAN POPULATION. CREATING VALUE FOR OUR CUSTOMERS Mauritius Telecom aims to provide each and every The expertise gathered by Mauritius Telecom has customer with an unmatched experience. Since 2015, also been acknowledged at international level as innovation has been at the heart of the Company’s testified by the numerous awards received in the key actions. The team is committed to providing recent three years. our customers with new tools and capabilities that simplify their lives in this increasingly complex Mauritius Telecom was named Africa Operator of connected world. the Year in consecutive years, 2016 and 2017 by the FTTX Council. Moreover, the Company received With the convergence of technologies, where the Best Network Improvement 2017 Award from our customers want to be connected anywhere, AfricaCom, while the FTTX Council conferred the everywhere and all the time, Mauritius Telecom coveted title of Industry Personality of the Year 2017 has decided to evolve its commercial strategy to to the CEO of Mauritius Telecom, Sherry Singh. make it easier for our customers to make the most of any moment. In this context Mauritius Telecom The Company can pride itself on having a customer regrouped all its services under a single commercial base of 1.3 million subscribers, ranking itself as the brand, my.t in November 2017. The new brand leading provider of ICT services and solutions in promise is “live the wow”. Mauritius. The Company has a rich legacy. The history of PRODUCTS AND SERVICES Mauritius Telecom is closely linked to the introduction and development of telecommunications in Mauritius Telecom provides a broad range of Mauritius. The installation of the first telephone line voice, data and content services supported by dates back to 1883. fixed-line, mobile, internet and TV platforms. All the commercial offers of Mauritius Telecom for From a state-owned entity, Mauritius Telecom has consumer and business markets are now under one successfully undertaken its transition into a private convergent brand, my.t. company in the context of the liberalisation of the country’s telecommunications sector. One of the most notable advances during 2017 was the islandwide coverage of Mauritius with very high In 2000, Mauritius Telecom entered into a strategic speed 4G mobile network to ensure that customers partnership with France Telecom, now Orange S.A, can enjoy an enhanced mobile internet experience which acquired 40% of its shares. on their smartphones and tablets. Moreover, the Mauritius Telecom has been and will continue to my.t home TV offering has been enhanced with new be one of the key drivers of the socio-economic TV channels such as StarTimes football, Food Food transformation of the Republic of Mauritius by as well as new offers such as Cine Pack and Smart creating and nurturing an environment conducive to Box with YouTube access. the growth of the ICT industry, which has become a Over and above the usual internet and mobile major pillar of our country’s economy. solutions, Mauritius Telecom also launched several In addition to heavy investments in the latest apps such as Traffic Watch updated with Live Drone technological platforms, Mauritius Telecom gives view, my.t Top Up, Chake App and, more recently, special attention to the quality of its service so my.t weather, which has attracted more than 53,000 as to provide its customers with an unmatched downloads. experience. Mauritius Telecom launched 350 free public Wi- Furthermore, to bridge the digital gap, Mauritius Fi hotspots across the island in April 2017 to Telecom is actively engaged in the deployment support the Ministry of Technology, Innovation and of Wi-Fi spots all over the island so that the Communication in its initiative to promote free underprivileged can have access free-of-charge to broadband access. the internet. For businesses, Mauritius Telecom is a one-stop Mauritius Telecom is completing the island- solution provider. In addition to IP-based services, wide deployment of fibre which has required an virtual private networks, high-speed internet access investment of some Rs 5.1 billion. Households and and application services, it offers Fibre-To-The- businesses all over the island now reap the benefits Home, Fibre-To-The-Business, a Gigabit Passive of ultra-high-speed broadband internet. Optical Network, ADSL and SHDSL technologies, telepresence and cloud computing solutions. MT:AR ’17 6 Its latest offering targeting small and medium other submarine fibre cable projects, such as the enterprises, Business Boost, a fibre based very high- Europe-India Gateway and the West Africa Cable speed broadband offer, will undoubtedly contribute System, to enhance the resilience of its international to their growth and evolution to the next stage of connectivity. their development. Commercially, this initiative has resulted in a significant increase in the Company’s Furthermore, following the 2016/2017 budget broadband base in the SME/mid-market segment. measures, which laid down the foundations for an investment-driven development model and towards a fully-fledged digital society, major investment SHAREHOLDING is being undertaken to increase bandwidth and The Government of Mauritius, the State Bank of capacity. Mauritius Telecom has thus initiated the Mauritius (through its wholly owned subsidiary SBM Mauritius and Rodrigues Submarine Cable Project Holdings Ltd) and the National Pensions Fund hold (MARS) which will be completed by 2019, thereby 59% of the shares in the Company. One percent transforming the digital landscape of Rodrigues by of Mauritius Telecom shares were sold to eligible bringing in 500 times more bandwidth and up to employees and pensioners in 2007 at a discounted 100 Gbps bandwidth capacity. rate under an employee share-participation scheme, Moreover, Mauritius Telecom signed an agreement while the remaining 40% are held by Orange, in September 2017 to be the anchor tenant of the through its investment vehicle, RIMCOM.