Negative Points

• Fintech service revenue growth of 13.3% was below guidance, impacted by the Uganda election shutdown, Ghana float rate change, and Nigeria airtime advance suspension.

• South Africa's prepaid voice segment remains a drag on growth, with a deliberate reset on airtime advances impacting revenue.

• Nigeria's service revenue growth was significantly affected by the FCCPC directive to suspend airtime advance, with a 13% print including this impact.

• Higher global oil prices have increased diesel costs in Nigeria, pressuring EBITDA margins, expected to be at the lower end of the guidance range.

• Impairment on Irancell investment of ZAR3.9 billion and hyperinflationary effects in Sudan, South Sudan, and Iran negatively impacted basic EPS.

• Contingent liabilities for uncertain tax exposures have doubled year-on-year, reflecting new tax assessments across the portfolio.

• The IHS transaction is complex, with regulatory approvals still pending in Nigeria, South Africa, and other regions, and requires additional debt funding.

Q & A Highlights

Q: How has the reaction to the Nigeria slowdown changed how MTN will communicate temporary disruptions or headwinds, and what are the specific changes to guidance? A: Ralph Mupita (Group President and CEO) stated that MTN operates in dynamic, non-linear markets and will not provide quarterly guidance, as fluctuations are expected. He reaffirmed the medium-term guidance, noting that in Nigeria, two effects (tariff increase normalization and the restoration of airtime advance) will reverse in H2, giving confidence in meeting the 20% service revenue growth target. However, due to higher energy prices, the EBITDA margin for Nigeria will be at the lower end of the range (around 53%).

Q: What is the impact of dealing with four parties for airtime credit in Nigeria? Does it increase complexity or allow for quicker targets? A: Ralph Mupita explained that MTN is working within a regulatory framework requiring multiple providers. The team will optimize the white-listed base by allocating it to providers with the best performance, creating competitive dynamics. He noted that some providers will have a learning curve, so a full recovery to Q1 levels won't happen immediately, but performance should improve significantly by Q4.

Q: What interventions are being implemented to accelerate fintech revenue growth, which remains below guidance even after stripping out the three non-operating factors? A: Ralph Mupita highlighted that the key drivers will be restoring airtime advance to Q1 levels (which impacted growth by ~5 percentage points) and accelerating advanced services, particularly lending. Serigne Dioum (Group Chief Fintech Officer) added that basic services decelerated due to tariff adjustments in markets like Cameroon, but growth should improve next year. The focus is on accelerating lending in Ghana and Uganda, with Nigeria to follow.

Q: How much further does MTN South Africa need to go with the XtraTime rationalization, and when will the top-line improvement begin? A: Ferdi Moolman (CEO, MTN South Africa) stated that the company has reached a comfortable level of XtraTime penetration and has started to push it back into the market responsibly. The focus is on avoiding the previous over-penetration in the wrong market segments. The impact on revenue is direct, and the company is managing the recovery carefully.

Q: Is Cell C up to date on payments, and when will negotiations on the updated roaming pricing framework be finalized? A: Ferdi Moolman said the relationship with Cell C is healthy and ongoing. He declined to provide specific details due to a non-disclosure agreement, noting the contracts are large, complex, and subject to ongoing discussions.

Q: Will South Africa's CapEx accelerate in the second half, given the current run rate is half of the main peer's? A: Ferdi Moolman confirmed that CapEx always accelerates in the second half. MTN South Africa is currently undertaking a substantial upgrade of its radio systems, which will drive increased spending. He noted that the procurement process for the rand upgrade took longer than anticipated, but the rollout is progressing well and showing improved quality and data growth.

Q: What is the growth profile and runway for the Ghana business, and how should we think about cannibalization and capital intensity as it shifts to home connectivity? A: Ralph Mupita stated that Ghana's next major growth vector is moving from mobility to home connectivity, which will be driven by fiber and fixed wireless access. The potential acquisition of low-band and mid-band spectrum is attractive for this opportunity. He noted that Ghana's balance sheet can accommodate debt to finance spectrum acquisition without jeopardizing earnings or cash upstreaming.

Q: Given the high EBITDA margin in Ghana (61.8%), what flexibility does MTN have if regulators take notice, and how does the company think about the sustainability of these margins? A: Ralph Mupita responded that the high margins are a result of sustained investment through the cycle and meeting nascent demand, particularly in data. He noted that MTN is already subject to Significant Market Power (SMP) regulations in Ghana with several restrictions. While the operating leverage has driven margins up, he acknowledged they may not sustain at this level forever, and the team is focused on making a social contribution beyond taxes.

Q: Is it possible to execute the ZAR6 billion share buyback faster than the three-year plan, for example, within a year? A: Ralph Mupita declined to provide specific timing, stating that the program is set to be executed up to a maximum of 2028. He noted that the company will provide updates at the end of each quarter, but revealing more would give insight into the company's internal view of fair value.

Q: How much runway is there for cost efficiencies in South Africa before cutting into the muscle? A: Ferdi Moolman explained that the cost initiative requires structural change, not just vendor discounts. He cited the use of AI to improve power consumption efficiency as an example. The program is structural in nature and has significant runway, with a timeline of two to three years to fully unlock the benefits.

Q: What proportion of South Africa's voice and data traffic is carried on spectrum accessed through sharing agreements, and is there a path to self-sufficiency? A: Ferdi Moolman stated that the majority of traffic is carried on MTN's own spectrum. He emphasized that spectrum is the "lifeblood" of the industry and that having more spectrum always unlocks efficiency. He pointed to Nigeria's clear spectrum acquisition strategy as a model for growth, indicating MTN will always seek to acquire more spectrum.

Q: Are there any markets where MTN sees room for in-market consolidation, and where is there ability to price up given inflation? A: Ralph Mupita noted that many of MTN's markets have moved to a 1.5-player structure, which is globally attractive for investment. He highlighted South Africa as a market that "screams for consolidation" due to insufficient profit pools to sustain the required investment. He cited global examples where consolidation has led to sustained investment and stable or falling prices for consumers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .