MTN is undertaking “a deep and fundamental” strategic review of its operations, reflecting the pressure on its voice revenue, customer demand for data, and “more complex and competitive” markets.

The group is looking at housing new revenue streams, particularly from digital services, outside the core business. “This will allow for more agility and greater flexibility to accelerate growth in these areas”, it said.

New digital revenue streams are expected to increase their contribution over the next 12 to 18 months.

Other areas up for discussion include an advanced analytics unit that will enable the deployment of high-speed connectivity where it is most needed; improving operational efficiencies and customer care, with an emphasis on leveraging digital channels and reusing its mobile money service for distribution; and seeking “value-accretive” opportunities in select markets across Africa and the Middle East.

The group said it has “external assistance” for its review, without naming names.

The review was announced in line with MTN’s first half results, which saw the group report an impressive sounding 14 per cent growth in revenue to ZAR79 billion ($5.8 billion).

But the figure was boosted by kind foreign exchanges movements, as the South African Rand declined in value significantly against other currencies.

Organically, revenue grew by a less impressive 1.5 per cent.

Performance was impacted by factors such as a decline in outgoing voice and data revenue in Nigeria following the withdrawal of regulatory services from MTN’s local unit until May 2016.

This setback was only partially offset by higher revenue growth at MTN South Africa, supported by strong device sales and an increase in data revenue.

Outgoing voice revenue increased by 8 per cent on a reported basis, although it did feel the impact from competition, disconnections and free minutes used for subscriber re-registration campaigns.

Meanwhile, group data revenue increased by 32 per cent and represented 25 per cent of total revenue. Digital revenue, including mobile financial services, contributed 32 per cent of data revenue.

The group’s results were significantly impacted by the Nigerian regulatory fine.

In June MTN Nigeria resolved this matter with the country’s government and agreed to pay a total cash amount of NGN330 billion ($1.67 billion) over three years in a full and final settlement.

The US$250 million paid “in good faith and without prejudice” by MTN Nigeria in February 2016 forms part of the monetary component of the settlement, leaving a balance of $1.42 billion.

In June 2016 the first scheduled payment of $124 million was made. The remaining cash payable at 30 June 2016 amounted to $882 million.

First half EBITDA decreased by 38.4 per cent to ZAR18.9 billion, taking into account the Nigerian fine, hyperinflation, and deferred profit from the sale of towers in Ghana. Excluding this, EBITDA increased  3.3 per cent ZAR 29.3 billion.

Net loss attributable to shareholders was ZAR5.5 billion, compared with a prior-year profit of ZAR11.9 billion. MobileWorldLive