MTN’s Post

Transcript

Since its inception, MTN Group, Africa's leading telecommunications operator, has built a unique legacy connecting people, driving economic growth and transforming lives across South Africa and the African continent. Today, MTN says more than 288 million customers across 18 markets and in 2023, it's fintech transactions. Topped $272 billion. What might the next 30 years look like? I had an opportunity to ask Group CEO Ralph and Peter that question, and many more. We started our first call on the 1st of June 1994, after, you know, securing the license in September 1993. We had a business plan then. We thought the case was that, you know, over the next five years, there'll be 300,000 subscribers on the MTN network, 2/3 of them 200,000 would be businesses. And we said there's very limited opportunity. For individuals and in fact the individual market was seen as people who had car phones. So that was the market assessment then. But Fast forward five years later, the 300, 000 was 2 million in South Africa. So that business case was, you know was didn't really capture the market opportunity and you know, MTN started as a story in South Africa. And by 1997 started to expand its wings, moved to firstly Rwanda, Rwanda is our first born child and then we went to Uganda's pretty much the same time and Eswatini and then you know the expansion into Nigeria 2001 and then the rest is history. So it's been a journey that has been amazing in seeing us from. You know this company that now has 288 million subscribers. So to your question about the impact, I think our telecommunications more generally has transformed the Global South. If we think about where we came from, the early 90s, you know, teledensity, the number of people who have a fixed line in most African markets was very low. I mean, Zimbabwe was 1.2. Telephone lines for 100 people, South Africa was 8.9. Most African markets were like zero point something. So what telecommunications wireless is, it's been a real revolution in in that stability to connect people to the Internet and give them all the benefits of the Internet. And what we've also been able to do is MTN is leverage the capabilities, skills and brand that we had to launch Mobile money in 2009. And we now have 288 million subscribers using our network regularly and we have 63 million people using Mobile Money. So the social economic impact has been significant. We are in most markets SA, the largest taxpayer. One of the biggest employers and we're number one and #2 in our markets so the socioeconomic, you know benefits we would like to believe that MTN has delivered in in the various host markets, you know has been significant. People experts talk about telecommunications now as the new infrastructure. In the past we spoke about roads, railways, but now people are talking about telecommunications is that are the backbone that. And the economy is just talk a little bit about how you see that and how you see the role of MTN. Yeah, If you think about it today, everything is connected to data networks. I mean, we think of ourselves as building base stations, fiber, realizing the networks, connecting people, connecting businesses. But if you step back from it, you know, wireless communication has become critical national infrastructure. You know, every bank is having transactions flowing through our network. Hospitals depend on networks being on schools. Just general society is underpinned by wireless telecommunication. And now the line between wireless and fixed is blurring. As we move into this 5G era, we're seeing a bit more of that blurring, but you know, it is the new and most important form of critical infrastructure, I mean roads, rail, airports, ports, etcetera. Still have a role to play, you know, no doubt about that. Yeah. But what is really transforming societies, and again, I come back to the point about societies in the global S, like in our markets, is the role of the digital economy, you know, to drive, you know, you know, socioeconomic growth. So, you know, it's a very interesting form of infrastructure that is almost a public good, but provided by private capital. There's very little that looks like that. Anywhere in the world. So in today's world where the digital economy is powering growth, you know, wireless networks, fixed networks, you know, are the bedrock of any society. Yeah. And it's not a journey you've made alone, right. You've had stakeholders along the way, partnerships that have been critical in the growth of the company. Let's talk a little bit about their impact and who they are. No, I mean, in in the the success and progress of Mt and over the last 30 years. I mean, there's a broad stakeholder group. I mean the customers are the most important. If you think about, you know these people trust us to you know to be reliably connected onto networks and we've built as I said the base of 288 million to date across our 18 markets. The regulators and the markets who create their regulatory frameworks that enable us to operate, you know these are have been critical. The host nations, every country will operate, has an ambition around its own strategy where they want to take their people to. We try and align ourselves with that. And so they've been critical in enabling us to grow and to do everything we do to invest in the networks and to be able to repatriate dividends and all of those good things, you know. And in most markets actually we've gone in with partners, we have gone into new markets and found locals to partner with. And I think that's probably been the most unique thing about MTN. We have not wanted to go into a market without local power partners. Our staff, I think one of the things that makes MTN unique is we're truly Pan African organization. We have 70 nationalities in this company, 70 nationalities. And I and I take a lot of pride when I look at my executive committee as an example, you have a Senegalese. Yeah, you have Nigerians, you have Ghanaians, S Africans, Lebanese, you name them. And I think that's part of the what I call the yellow magic, which is this diversity. So our staff has been very important as stakeholders as well. And finally and probably it goes without saying, it's just, you know, governments more generally, particularly the ministries that are you know, oversee us beyond the regulators, ministries of finance, competition authorities without that whole. Setup of stakeholders, I don't think MTM we would we wouldn't have made this progress. Yeah. And 30 years of building the largest African telecommunications company. I wanna talk about what the next 30 years or what the MTN group of the future looks like. Yeah, look, we rest on the shoulders of giants, mini MTN's, CEO's and their teams and boards, etcetera, before my time. And it's it's, it's always a little bit easier when somebody has done the hard work, not that the hard work has ended, but, but, but as we look forward, we're excited about the future I got when we see the demand for data and Internet services and what the Internet can bring to drive social economic progress. So we still see waves. Waves of data growth. The big wave we see now is consumer within enterprise is the next 5G in our minds is a big industrial application for business, smart cities, safe cities, ports, logistics, mining, safe mining. So there's another wave of growth on the enterprise side that we see. And I think we're just beginning fintech. I think we're only beginning right now. We are. Very far from saying the job is yet done to include more Africans. We're gonna play in infrastructure, but in a partnership model. So the, you know, the infrastructure, particular fibre and to some extent data centers, more and more needs to get built and there's a role for us to play this. So I'm in the next 30 years of MTV and I think, you know, we are going to be, you know, pursuing the next, you know, waves of generation and growth we've gone through. 4G to 5G6G will come, which is really going to be about always being connected. Where you leverage, you know, satellites, terrestrial networks, undersea cables to ensure that you're always on. Are you talking about me in my rural home? In your rural home, you'll have a high speed connection. That time is coming and it's going to be affordable. And we'll be balancing terrestrial networks with with Leo satellites. When you go to your rural area, your home that you love so dearly, you you'll be connected. But it'll be the combination of all these forms of technology. That create this I'm always on this ubiquitous always connected with a good quality connection at that time is coming and you know that's the next decade or so. It sounds like a lot of money that needs to be invested money for sure is going to come into it and that's why I keep referring to partnership capital part of the future of MTN. We're not going to do everything alone. We need to be smart about how we partner and you've seen us now thinking about the fintech business to say we're not going to do everything we're going to partner. With the likes of MasterCard on payments in particular and also thinking about remittance, we're gonna partner insurance with a company like Sunland and so forth, so. A lot of capital is going to be required, but we need to think smartly about how we crowd in other people's capital. Yeah, aside our capital, we we don't have the balance sheet and the most MMO won't have the balance sheet to fund all of that. So smart partnerships are going to be the real deal going forward. And that's something that we know we need to do and we are reading ourselves for that. You know, as we look at the next decade, you reminding me of what the banks of the past where I think I remember you took the asset management. You talk to insurance and then you talked obviously the commercial banking and those type of things. And then we heard about the fact that no, the banks wanted to divest a little bit because their pie was being eaten by the telecommunications company. That space for telecommunications companies in terms of integrating banking, telecommunications and all these other things that you guys are able to do. Will there be a company like that in the future that looks like MGM? I'd like to say that we don't compete with banks and most banks agree with me, but sometimes you don't. What we're trying to do is I think about what we're doing as financial inclusion. We're including those who've been left out, you know, you know, because they, they, they are quite limited in their financial resources. So you know, I would love for you to be a customer of ours in our mobile money fintech business, but you know, the traditional customer because you're well banked and that was served. So where we going is where people are underserved and that's why we think of what we're doing in fintech as financial inclusion. Is we go and we talk to that customer who can spend or you know a dollar, you know maybe $2.50 maximum on financial services a month. That's the customer we are after. So you know traditional banks and insurance companies do not get to those customers. They will not make an economic return because of the infrastructure they need to build. But what we've been able to do is leverage our capability, our distribution, the technology that we have to get to those. Customers for sure over the next 5 to 10 years, what you're going to see is a much more epified experience of. Of our fintech business, so it will start looking a bit like banking, sure. But that customer that we're dealing with their, their needs are quite different from ours. And we see that mostly when we're outside of South Africa when we look at across our markets. So we're not trying to compete with banks. I don't think banks also trying to become telecommunications operators because they didn't have to put in this enormous CapEx that we put into the ground. So the smart thing in the futures partnerships, you know is, is to find win, win partnerships between. So compete and cooperate over time, I think is going to become the norm is in one minute you're talking to somebody competitively, in another moment you're looking to collaborate smart partnerships with the partnership with the future. Ralph, thank you very much for your time, much appreciate it.