MTN Group Limited (MTN) Earnings Call Transcript & Summary

Well, we certainly hope that does address the concerns that we've had from our guests, but as you say, ongoing conversations. But some clarity being provided there. A follow-up question to you, Karl, that is related to an outline, if you can provide one, an outline on the interrelation between USSD and bank charges. There seems to be some issues across the market in this regard. What resolution is being sought to address this issue?

So there are 2 issues here. There's the banking commission issue for which there was a dispute around the Easter weekend. Again, with that, there was really no impact on our revenue numbers. It was primarily commercial disputes, and I'm very pleased that we got support from both the financial and the telecoms regulators. We pretty much resolved that. We continue to look for methods to optimize our cost of sales commission through changes in the commission structure and exploring new and diverse digital channels to recharge. So we think that's in the past. We continue to optimize. We continue to give a diverse set of channels for customers with a -- on a continuously cost-optimized basis for recharge. So that's on one hand. And then there's the cost of the USSD service to access banking services. A memorandum of understanding was agreed in principle between the industry players, that's the bankers, the telcos and the industry regulators, the Central Bank of Nigeria and the NCC, sometimes late in April also. The details of those -- of that memorandum of understanding have been a subject of intense engagement right up to yesterday. But I think we will come to the firm closure on a very, very civilized basis on that issue. And we'll start to charge a fee, which covers not just the cost of the current access of the USSD channel, but also addresses the historical debt and gives us an opportunity to recover that over an extended period of time. Thank you.

Thanks so much for that, Karl. There's another question also related to the regulatory environment, and this time around regarding the PSB license. And perhaps twofold, if you can elaborate for us here. The first question wants us to provide a difference in terms of understanding the benefits and the difference between the PSB license over a super-agent license. And a follow-up that we have from Richard Hasson. Richard asks, "The allocation of the PSB license in Nigeria seems to be taking longer than expected. Where are we? And in your engagements with the regulators, have you raised some major issues or concerns? Or is this purely just a timing issue?" So a twofold question there related to PSB licensing.

So let me first try and explain that the super-agent license is primarily a service which distributes banking services. With a PSB license, we can open wallets and offer a significantly wider range of services, including savings, cash in, cash out, retail payments. And we can invest uploads into Treasury Bills under the current regulations. So there's quite a difference, but we still believe that even with this super-agent license, there's quite a bit of value to be created by MTN, particularly with our one distribution network. In terms of the PSB license issuance, as you know, 2 -- 3 players have been issued license. The biggest telcos, which is us also and a competitor, asked earlier to get the license. We've been engaging in a very constructive manner. And I think as time evolves, it becomes more and more clear that if you don't have the big players in telco, the agenda of accelerating financial inclusion would be [ under threat ]. So PSB remains a very firm priority. And it's the largest opportunity for financial inclusion and alignment with the nation states and value creation for MTN itself as well. It's taken some time. I think we've gone through significant constructive engagements with the Central Bank of Nigeria. We feel that there's a better understanding of the value that we can add. We can't give a firm commitment on when we will get the license, but it is a very, very clear priority of ours. And we think we're headed in the right direction.

Thanks so much for that, Karl. I think there's much to -- for us to take away. Certainly the ongoing engagements and conversations that do take place in both opcos from a regulatory point of view that are leading to some favorable outcomes. But we will come back to South Africa now for a question that Jaynesh Bhana of Mazi Asset Management has asked, and it's all about MoMo. He wants you to add more color in terms of how successful MoMo has been in South Africa. And if you can give us a sense of the revenue contribution of all active subscriber numbers, how has it been performing?

Thanks, Gugu. I think it's a very useful question because we have had difficult parts when it comes to MoMo. We are actually making a remarkable progress on MoMo on -- by historical standards. Why am I saying what I'm saying? We have registered -- in hardly a year, we've registered over 3 million customers, of which 300,000 of them are 30-day active. We never saw a run rate like this in the past. So we're on the right trajectory. Of course, a lot is still to be done. The point around revenue is an important point, but the strategy is, you start by getting the base. We're trying to get to 5 million customers by 2025. Then once they're in the [ group ], you add more services and then you start basically monetizing. So the single most important KPI is customer acquisition, but that is active. So the registration and the 30-day active and then the product pipeline, so from payments to P2P to P2Cs or the innovation base around it, we need to accelerate so we can then unlock more value.

If we can build on that, is that, I guess, part of the secret sauce in the strategy that's now resulting in these more positive outcomes given the implementation of MoMo?

Essentially a number of things. The first one is the tech. We now have a platform, the Ericsson Converged Wallet in all our 15 markets. So we know from a tech perspective how to design these and run these. The second part is the people. We've got to see this Felix Kamenga. Again, he has done this in many countries before. And then now he's -- so much at what we did in B2B -- actually in B2B, while replicating that invested in fintech, getting experienced people who have done these things, so Felix is pushing that. And then the third part is the opportunity still exist in South Africa. There are 11 million people that are [ underpinned or unplanned ]. But we're also seeing a lot of convergence between the developed markets and the emerging markets, if you look at the innovation in the fintech space. I use MoMo, I am properly [ planned ], but the situations where it's more applicable to base the use. So with more innovation, with more customer acquisitions and they look at all the verticals like your lending, your e-commerce, over and above the traditional MoMo space. We believe that in South Africa, there's a huge, huge opportunity for fintech. We will continue pushing.

You mentioned the 5 million target in terms of customers. Are you able to provide numbers and clarity in terms of its revenue contribution to the group?

Yes, we have the number for the revenue opportunity part, but we're not at the moment in a position to declare it to the whole world.

Yes. We will await those announcements to come through for the investment community. There's a follow-up question here, Godfrey, this time around focusing on channel optimization. And requesting if you can add some color on what sort of mechanisms you've used in channel optimization, who drove the margin uplift -- which drove the margin uplift in South Africa? Can this be sustained is the question.

Yes, it can be sustained and it should be sustained. If you look at the margin's expansion in South Africa from 35% to 37% to 39%, and as I say, we're looking at 39% to 41%, of course, we are strengthening the top line, but we have really implemented what we call basic smart commissions. Talking about devices, we can't be selling devices to the market at a loss. So at a minimum, it should basically break even. Also look at the packages that we basically have in the marketplace around SIM cards, why do we have to put a wrapping that cost ZAR 10, when you can say, "Wrap this thing with plastic," that cost ZAR 0.20. So -- also, why should we pay distributors for customers that they churn in 3 months' time? So it's basically a mixed number of initiatives that we have. And to be honest with you, Gugu, there's a lot of these things that we have to do and we are going to do. So to the point that, is this sustainable? We'll basically make sure that it is sustainable because the 39% to 41% EBITDA guidance is really very important for us. And we are able to implement smart commissions and still be able to find growth and also our partners, our good partners, they're also able to make money.

Makes a valid point there. We know that Dineo did provide us with some clarity, and there's some details regarding the positioning of how the necessary capital is available to ensure that we're able to meet our targets. But this particular question now speaks about cash flow. And it asks here, "South African cash flow has always been a key to the overall group profile. Please provide some context on cash flow at MTN SA. How has this evolved? And how are you going to drive it going forward?"

No, the way we manage the business, first of all, you have to generate growth from the top line. So we've given the single-digit's guidance of 4% to 6%. Make sure the top line is growing. The second part, of course, cost containment. Be hard on costs. We've spoken about it. Then the third one, of course, is CapEx investment. So we have stabilized the CapEx. As I say, for 3 years in a row, we've stabilized the CapEx, but our network is still second to none. Of course, we -- also with more spectrum, it makes things even better for us. So we believe that grow the top line, contain costs, stabilize the CapEx, generate different EBITDA and then you basically have the cash for the group. So there's the master equation that we have to basically master every week, every month, every quarter, every year for the next period until 2025. That's how we plan to run.

Takes a lot of discipline to execute that effectively, right?

But it's fine.

But it's fine. That's important for your job, to be fine as well. I guess keeping with the CapEx theme and perhaps then directing this to you, Karl, to give us some insight within the Nigerian market. If you can talk about the availability of U.S. dollars and its impact specifically on the ability to actually roll out CapEx, can you share some insight on that for us, Karl?

Yes. So I mean there are constraints in ForEx liquidity in Nigeria, but through a mix of much of trade lines looking for solutions for vendors where we can [ fee ] them in local currency and adequate planning in advance. We've been able to keep up our CapEx program well in place. It remains a risk that we're very conscious of. Modupe referred to our mix of local and foreign funding to ensure that we don't go over certain thresholds in terms of ForEx exposure. However, with a very smart and agile work through our treasury and finance functions, we've been able to kind of keep our CapEx rollouts in line and perhaps even slightly ahead of the plan and deliver the equipment that we've needed. It's a bit of an art and a bit of a science, but so far, really good.

Really some positive steps that are certainly unfolding there, Karl. We come back to South Africa for -- with a question that we have from Ziyad Joosub of Nedbank. And this one really speaks to the detail that Ralph had provided in terms of the tower arrangements and agreements we had, and he did allude very briefly to Cell C in South Africa. This question asked for more insight. The question asks, "The Cell C roaming deal appears to be a clear win-win situation beyond high-margin growth in the enterprise segment. Could you explain the mechanics of how the new Cell C roaming arrangement will enable MTN SA to have improved spectrum access?" Quite loaded there, Godfrey, but if you could share some details.

Yes, yes. The Cell C deal, maybe to just simplify it, when it started in 2018, Cell C was roaming on our spectrum in the rural areas. And then because it was just expensive for them to be deploying network everywhere, they saw the benefits of that, they liked it. And then they said to us, "Why don't you also take over the urban areas?" And then the question also came and say that for us to absorb even the urban areas, we do not have enough spectrum. And then we basically said, "Okay, we should be able to roam on your spectrum and then you roam on our spectrum." Put simply, where there is not enough capacity, especially in the urban areas, we're able to basically then build extra radios, the modern solution, where we can actually run the traffic on the Cell C spectrum. So put -- in summary, you have the yellow spectrum and you've got the orange spectrum. As opposed to building more towers, you're basically going to be utilizing the spectrum basically first. It creates a lot of efficiencies for MTN. It creates a lot of efficiencies for Cell C because the benefits, of course, will pass through to Cell C. And by the way, we're much more optimistic with all due respect with Cell C. Cell C now basically paying -- are now paying us. Of course, they [ can't distinguish ] what they owe us, but for what they are using, they're actually able to pay us. So it's getting better. It's not getting worse.

Getting better, which is a clear strategy and a better direction to move into. So the prospects do still remain to keep that as a sustainable partnership. Thank you so much, gentlemen. We certainly have a lot of invigorating questions that have come through for the -- both these 2 opcos, which are very important to the MTN Group and, of course, aligned quite closely and clearly with Ambition 2025. Karl, we thank you for your participation today and for joining us all the way from Lagos to communicate and share with this messaging, and having Godfrey here with us in studio to share some feedback. So a big thank you to both the CEOs of MTN Nigeria, Karl Toriola, as well as MTN South Africa, Godfrey Motsa. Well, we've come to the end of the second session for today. We've absorbed a lot of information about the key drivers behind the strategy here. Key opcos being Nigeria and South Africa. And of course, the conversations we had earlier about doubling data, FiberCo and owning the home. We still have opportunities for you to view these presentations that have been shared through the presentation packs. And we want you to continue to engage with us as we also take a look at other emerging markets earlier -- later on in today's program and get more details and insight into the positioning of Ambition 2025. For the moment, though, we do want you to take a lunch break. So stretch your legs, get some refreshments, and we will commence with this programming at the Capital Markets Day at 12:45. 12:45, that's when we'll commence after this lunch break to pick up on more themes that we need to explore under the MTN Group. [Break]

Welcome back to MTN's Capital Markets Day, where we're taking you, the investor community and select media, through the company's Ambition 2025 strategy. We trust that you enjoyed your lunch break and had some refreshments as we now deep dive into the second half of today's program. And of course, emerging market telcos have an opportunity to connect people, not only to each other, but to broader digital services platforms and platforms that enhance the way of life. MTN's Ambition 2025 strategy is anchored in building the largest and most valuable platform business in Africa. Meanwhile, Mobile Money has transformed the face of financial services. MTN continues to scale its fintech business with the goal being to transition to an end-to-end platform focused on creating a digital marketplace that connects consumers to businesses and businesses to businesses. Let's check out how the business is going to go about in terms of building Africa's largest and most valuable fintech platforms. [Presentation]

I think it's safe to say that when we talk about all things fintech, the energy and excitement is palpable. But we certainly want to hear more about the growth targets and the ambitions that were highlighted earlier. As we know, ZAR 100 million is the target that we're looking for as we implement Ambition 2025 for MoMo subscribers. But someone who will tell us not only about MoMo, but many more of the various levers and unicorns within the fintech space. We are now going to take a look at a presentation from Group Chief Digital and Fintech Officer, Serigne Dioum, who will talk us through the latest and future plans in the fintech and digital services streams. Following Serigne's presentations, we'll go straight into a Q&A session where we'll unpack and peel back at the many layers of the developments in fintech. Both Serigne and Group CEO and President, Ralph Mupita, will join us for that session.

Thank you, Gugu. Good morning or good afternoon to everyone, depending on from where you are listening to us. I'm going today to present to you our digital and fintech vision, strategy and how we will be implementing the strategy. The penetration of financial services and e-commerce is marginal across African markets. The opportunity exists for Africa to accelerate digital disruption within financial services, insurance, lending, remittance, payment and e-commerce. Our vision is to be the leading platform for Africa, unlocking economic growth through financial and digital solutions for customers and businesses of all sizes. Meet [ Kafu Win ], entrepreneur in Ghana, how she goes about her everyday life is a journey we strive to provide to all our customers. She uses Mobile Money to manage her business and payment and also sells our products online with MoMo market. [ Kafu ] now hardly receives physical cash. She received a business loan with MoMo advanced investing, buying new products to support her community. She uses [ Ayo ] to ensure her inventory and reduce her business risks. She sends money and often shares [ with the world ] on a local Ayoba channel to her son studying in Cape Coast somewhere in Ghana. [ Kafu Win ] is also the leader of an Ayoba group chat, where local, small shop owners coordinate to buy products in bulk at reduced prices. She enjoys listening to one of Ayoba's channel on weekends and watches live Sunday functions on Ayoba when she travels [ through aircraft ] for businesses. I'm excited to say that MTN is building Africa's version of WeChat. This slide shows you the ecosystem in more detail, where we will build on a scale platform, end network and offer financial services and e-commerce solutions, not only to consumers, but also to businesses to support Africa's growth. On the left side, we have the services offered to consumers. And on the right side, you will see the services we offer to businesses. These are brought together through integrated platform and supported by integrated partners such as banks, logistics networks and content providers, delivering through a bold strategy. We have bold ambitions to accelerate growth in MTN territories through excellent delivery and evolve to a full OTT play. Africa is ripe to accelerate digital disruption with tech, and we are well placed to take advantage of the ZAR 25 billion revenue opportunity. Ultimately, we expect to be the biggest digital and fintech platform in Africa and delivering 6 unicorns in 1 business. The unicorns underpinning this opportunity includes mobile wallet, which is already a unicorn and has scaled already with 47 million active monthly customers. E-commerce and payments are predominant because of small, informal businesses, and it is really booming. Fueled by COVID-19, we have already more than 500,000 merchants. Current lending mechanisms have limited reach and are not implicit. We are disbursing more than USD 100 million loan to our customers. Insurance adoption is at 2.8%. We have more than 11 million policies to date. Remittance are showing strong growth underpinned by inter-Africa trade, we have processed more than $1 billion remittance transactions end of last year. Securing several partnerships will help us to ensure success and to scale faster also in implementing our strategy. And really part of our strategy is make sure that we find the right partnership to scale the new unicorn insurtech, banktech, remittance, payment and e-commerce. This partnership will provide important expertise as well as potentially becoming equity investors, leveraging our assets, building Africa's largest and most valuable fintech platform. Our fintech business is already a scale business. We currently have more than 48 million monthly active users. We delivered more than ZAR 13 billion revenue in 2020 despite P2P zero rating due to COVID. Our fintech platform process, more than USD 150 billion in 2020. We are processing more than 16,000 transaction every minute, but still have a lot of things to do to capture the USD 25 billion fintech opportunity in Africa. Payment remained cash-based with 95% of transactions still cash. 75% of Mobile Money customers do not have access to lending. Insurance has only 2.6% penetration across Africa. We believe that we will be able to deliver by 2025, 100 million fintech users and more than 20% contribution to MTN Group service revenue. We are on track to be the largest fintech player in Africa. We expect to be the #1 Mobile Money wallet by end of this year in terms of deployment, scale, number of active users. No other big players have absorbed these services into 1 super app platform and MTN ambition is to go beyond traditional telco-led model with the OTT super app, Ayoba. Also, there are several nontelco players in Africa, fintech and super app space, none of them has gained momentum or succeeded in multiple countries, while we have. We believe MTN is well positioned to combine the increased penetration of smartphones with the reach of mobile wallet and our unique asset to become the continent's leading player in the digital economy space. The intention with this slide is to give to you an indication of how big MTN Mobile Money platform is in terms of user penetration and transaction value per country. The left-hand of this slide shows the current penetration by region across Africa, across also financial services, credit cards and insurance. Fintech has scaled its wallet platform and secured licenses in several markets. You have seen that now in most of our countries, we have telco-led licensees secured by MTN. Zooming into this market, the right-hand side indicates the number of active mobile wallet users compared to the total population figure by country. You will notice in countries like Ghana, where the value per GDP is up 120%, highlighting the trajectory for growth for other markets when there is scale. We are going to talk about how we're going to unlock the potential on mobile wallets across Africa. Our plan is to continue harvesting within MTN base, open Mobile Money to non-MTN customers in existing markets and launch new markets. We have seen progress in South Africa and Nigeria. In South Africa, we've launched Mobile Money. And we are building distribution in Nigeria. Also, we have launched super-agent licenses and have applied for PSB. We expect a notable uptick before 2025, as explained by Karl and Godfrey in their respective presentations. We -- as MTN, also, we are well positioned to save the payment and e-commerce opportunity across Africa. Looking at e-commerce. In only 2 years, MTN has managed to become 1 of the largest merchant acquirer with more than 500,000 active merchants, and we are well positioned to capitalize on the payment and e-commerce opportunity through our institutional knowledge, distribution network and regulatory environment and also on all other assets that MTN has. And if you look at it carefully, we have 47 million customers, we have more than 500,000 merchants and we want to really create a platform which will help to put together the merchants and our customers and to create the biggest e-commerce platform within Africa. On banktech side, we are prioritizing the development of a value proposition for 4 segments, for MTM consumers, for our consumers, MTN overall with really what we call airtime advance with MoMo consumers, with merchant and agents. Each of these segments we have a unique value proposition which will help really to unlock the potential of lending in Africa. MTN has really unique assets, combining its data wealth and the scale Mobile Money wallet, we have facilitated already 100 million loans per month, and we think that we can do much better with what we are putting together. We are building our own product and technical capabilities. We have circuit partnerships with regional banks and fintechs. We are already live in Uganda with our product, and we have opco-led project running in 8 markets. Our objective is really to be live in all our markets by 2023 with the 4 services I described earlier. Insurtech has a very big opportunity in Africa, which is really underserved today. Currently, we've sold more than 11 million insurance policies since inception. We are live in only 3 markets with 2 additionals coming this year, Nigeria and Ivory Coast. Our objective is to gain 33 million active customers and deliver revenue more than USD 455 million through a full portfolio of micro, life, retirement, saving and general insurance. Our plan is to expand in more countries by leveraging our core MTN and fintech platforms and leveraging strategic partnerships such as Sanlam to accelerate [ Ayo ]. Onboarding Sanlam as a strategic partner will boost our growth. [ Ayo ] will be leveraging Sanlam footprint coverage of 33 markets, licenses, expertise to accelerate performance. Sanlam becoming an African champion matches with our fintech ambition. We are already in a very strong position when it comes to international and regional remittance. Already, we were processing more than $1 billion as remittance transaction per year. Remittances in Sub-Sahara Africa are growing at 10% per year. Our plan is to multiply by our remittance volumes for 4x by 2025, through growing our ecosystem partner, launching inbound remittances in Nigeria, driving aggressive pricing and volumes using airtime and data. As Ralph explained earlier, we have a plan to restructure our fintech. This is underpinned by the need to comply with local regulators, our operating model attract strategic partners and realize our fintech valuation. Our target dates includes the following. From 2020 to end of 2021 this year, we plan to create our opco, finco and to give -- put substance in the opco, fincos. In 2022, we'll consolidate our fintech operations under 1 fintech Topco. Once we are completed consolidating our fintech business under our fintech Topco, our primary focus will be to attract strategic investors to accelerate growth. An IPO will only be [ a result ] at a later stage. We aim to have 100 million active MoMo users by 2025, contributing more than 20% to MTN Group service revenue; continue driving strong synergies to move from 40% to 70% penetration with our GSM base; grow and expand beyond MTN customers and new markets. We will leverage our wallet as our first unicorn to unlock 4 more: payment, insurtech, banktech and remittance. Ayoba is our platform to harness Africa's unique digital ecosystem and contents. Even through (sic) [ though ] there is major potential for an Africa super app, the continent presents its own challenges to faster growth and adoption. Therefore, MTN's mission with Ayoba is to act as the African digital economic catalyst, made possible through its triple play of free messaging, content, distribution service and e-commerce, opening the platform to third-party services delivered through channels, BOTs and app in app. We aim to build a super app that meets the needs of African, particularly in those markets where we operate in. We have identified the gap in our markets, particularly in term of literacy of subscribers, current ownership of 2G-enabled handsets only. And we aim to take advantage of the existing opportunity to grow this space. We aim to reach 19 million active users for Ayoba by 2021, end of this year, and 100 million users by end of 2025. Although Ayoba is only 2 years old, it already has over 5 million active users, and we aim to reach 19 million by end of this year. We spent the first half of this year fixing the basics, and we'll scale further during the second half of this year to achieve this goal. We will launch a very aggressive campaign to increase Ayoba awareness within Africa and the diaspora, leveraging our MTN footprint and network assets to attract 19 million monthly active users by end of this year. And by end of 2023, we aim for 41 million. The Ayoba platform aims to harness growth in the African digital economy. Today, we have over 5 million users in 20 markets. We believe the opportunity is USD 10 billion GMV, and our ambition is to reach 100 million users by end of 2025 and to capture 12% of the GMV of the digital economy to reach USD 1 billion. There is a significant potential for a super app to capture the African digital opportunity. Our network and distribution assets enable a unique opportunity to become Africa's digital giant. Africa's enablers for the digital economy are coming into place for a strong acceleration in the coming 4 years. By end of 2025, we expect mobile data penetration to accelerate 3x and smartphone penetration to grow to 71%. Digital value chains and digital services are also building fast. In addition, the digitalization of services and e-commerce is ongoing. Currently, mobile and PC capturing 85% of video consumption. Lastly, localization is still required to succeed in the continent. This is MTN sweet spot, capturing the large share of the GMV of the digital economy. The big opportunity is to capture a large share of the GMV of the digital economy. The main verticals that will cover with our app in app play should represent a total market potential of more than ZAR 118 billion. We aim to capture more than 10% of the GMV of the digital sector in our footprint to reach between ZAR 10 billion and ZAR 15 billion GMV by end of 2025. Development phase of Ayoba is organized around 3 stage, as you can see. In phase 1, we will build the enablers. In phase 2, we will upgrade the enablers. And in phase 3, we will expand and monetize the opportunity. We will be completing stage 1 end of this year and stage 2 by end of 2023. Our ambition is to reach 100 million active Ayoba users by end of 2025 and capture 12% of USD 1 billion GMV of the digital sector. Africa's enablers for the digital economy are getting into place for a strong acceleration in the coming 4 years. As our ambition are very, very high, we've identified a risk on how to execute our strategy. Here, I'm going to present to you the main risk we've identified and also what we found to really make sure that we mitigate them. Let me take you through the mitigations with our new operating model implemented together with topco and consolidation. We'll be able to mitigate really the speed of the execution. Ongoing investment in technology and strategic partnership. Rapid execution of the 6 unicorns with integrated product and platform. Strategic investment and partnership to support rapid growth. Free data and SMS continuity as differentiator. Services, diversification through app in app to reduce dependency on instant messaging. [indiscernible] process automation continue GSMA certification. MTN is the largest group with the largest number of operation, which has GSMA certification so far. Combining the increased penetration of smartphones with the reach of mobile wallets, and MTN unique assets offers a unique opportunity for MTN to become the Africa's largest fintech giant. Our vision is supported by 2 platforms that are complementary and being developed in parallel to essentially create a full integrated ecosystem. Our fintech business to become Africa's super app with 5 unicorns. And Ayoba, the sixth unicorn, will be the super app of Africa, a single portal for a range of financial, telecom and contact product and services. Ayoba and fintech platforms are developed currently in parallel and will converge to create a fully integrated ecosystem. Now I'm going to present to you the digital revenue ambition by 2025. We aim to grow and diversify revenue and contribute to more than 20% of MTN Group service revenue between 2023 and 2025. To support execution, we are intensively investing in technology and talent. We will continue developing strategic partnership, enable rapid scale for each vertical and enable our InStartUp with the right operating model. As I presented to you our vision, the strategy, how we're going to implement the strategy, I'm going to present to you the people who are behind the execution of this strategy. We have a global team passionate about Africa and committed to unlock the full potential of the digital economy. And you can see that the team has different diverse skills and coming from everywhere and with one goal and one ambition, to build the Africa largest digital platform by end of 2025. Our key takeaways. MTN's key differentiators on messaging is the free data on MTN network. Our aggregator model will offer a large choice to the user. We will help global content players to distribute through Africa and super app to allow us to size opportunities into other verticals. The African digital economy has market size with a revenue opportunity of USD 25 billion, and we are building Africa's largest super app and super platform with 100 million users monthly. Our proven InStartUp model gives us agility and rapid scale to contribute more than 20% of MTN service revenue. Thank you very much for listening, and enjoy the rest of the day.

Well, I think the energy is quite palpable when it comes to fintech and what we've learned about fintech and digital services from Serigne. But we're joined by both Serigne and Ralph to expand a lot more on this particular segment of the business, helping us understand more of the growth drivers, where the partnerships are coming from and, of course, a clear understanding into how this does tie into Ambition 2025 and the targets that had been set out. Gentlemen, great to have you both. And Ralph, thank you so much for coming back. Serigne, I must tell you that this is quite an exciting segment, and we have really witnessed some of the questions coming through from members of the investment community. But I think firstly, let's have a head start there in terms of the life that you're actually changing on the ground. There's an entrepreneur, [indiscernible], if I'm not mistaken, that you highlighted from Gartner. So this really does help us personalize and understand the impact that fintech technology can have on the ground on the continent.

Yes, for sure. So [indiscernible] is an example of how people are using our portfolio of product and services and how also we're impacting people's life across where we're operating. But in all the markets also, the same way we are impacting the [indiscernible] life in Ghana, we are impacting also the life of people in our other markets. And really, our ambition is to really help to increase digital and fintech and financial inclusion in Africa within what we are doing and to serve really the continent.

Well, you really are moving into a space that has a lot of opportunity and excitement. But I guess top of mind for many investors, we're also well aware that this is a very competitive environment. So I guess a twofold question, too, to the both of you is we take a look at the number of competitors that are trying to penetrate the continent as you are. How is it that MTN will remain resilient and competitive within this particular space? Serigne, Ralph?

So maybe I will start, and Ralph will build on it. For us, I think we are really focused on implementing our strategy. We do believe that the market is very big. The opportunity is very big in Africa when it comes to fintech, and there is a lot to be done. And we don't think that also we should be afraid about competition, about what they are doing. We spend a lot of time scanning the market to know what they are doing. It may impact time to time our strategy, but the most important thing is really for us to continue building our strategy of building 5 unicorns. And if you look at it carefully and closely, you will see that the first unicorn, which is the wallet, is the most scaled wallet in Africa, with more than 47 million customers using already in a monthly basis our wallet. And the second unicorn, which is payment and e-commerce, we already have more 500,000 merchants across our footprint. And we are the biggest merchant acquirer in Africa currently. And we will build on that to build our e-commerce platform. And we've launched our pilot in Ghana, and we will be accelerating the implementation of our footprint. And our third unicorn we are building, which is banktech lending, we are disbursing currently more than $100 million to our customers when it comes to lending. So it is a very scaled business as well. And if you look at insurtech, we talked about it, what we will be doing, and it will be -- it is already very big with 11 million policies. And if you look at international remittance, within our platform, we processed more than $1 billion remittance transaction last year. So I think we already have a very scaled business, and we will be focusing on continuing executing our strategy. And we think that whatever competition we'll do, we will be doing well as well and achieve our targets.

Maybe to top and tail on Serigne's responses, Gugu, I think one of the unique features for MTN or just the markets we operate in, and I think Jens touched on it earlier on, is that actually, smartphone penetration in our markets is still very low. So although many people think USSD technology is old technology, it's still very relevant to us today. So linking the USSD technology and the distribution and the merchant ecosystem that Serigne spoke about, there's a very unique set of capabilities that we have as MTN. Now to your point around the competition, the competition -- the space is heating up, lots of app-based applications on fintech. Now many of our African brothers and sisters don't have smartphones. So these app base are really getting to probably the middle to the top end of kind of the market segments if you think about it from a consumer perspective. So we've said, and I think I mentioned it right upfront, that we think that there is a window of opportunity that we need to accelerate our own growth to be able to capture it as smartphone penetration comes in and then people move quite quickly to the app. But for now, more than half of our base is still on nondata-capable handset. So you do need the USSD technology. You do need the distribution capillarity. You do need the merchant ecosystem. The second thing, as Serigne has mentioned, what we're trying to build is an ecosystem effect, and [indiscernible] is a great example. She's using so many services. So I mean, in another world, people will say it's cross-selling. That's probably not a great word to use in today's [indiscernible]. But part of our strategy with the unicorns is that we want our consumers and businesses to use more and more of the services that we offer. And hence, our point that we want to accelerate because we know that more and more of our customers soon enough will get data-capable devices. And so we need to capture that market. And we will move from USSD to app-based fintech with the evolution of our customers taking on more data-capable handset. So we're very aware of the competition, but we think we're very well positioned. And we'll move the technological development and the data-capable handsets as time progresses on.

Yes. It really provides perspective as to how you're locally relevant but still globally competitive in terms of the need that you are sharing with the subscriber base. Keeping with fintech, though we know that this is quite an exciting [indiscernible], and you touched on it in the opening conversations with us this morning here, Ralph, but I guess the big question that everyone wants to know is if there is potential for a fintech spin-off from the group and what impact that would likely have on the business.

Yes. I'd like to use the word structural separation from spin-off because spin-off sounds off like we're kind of hiding this thing away and is not part of our business. Fintech and fiber [indiscernible], let's stay with fintech, will remain an integral part of our business, but we're talking about it being structurally separated to better run it, to resource it and actually to find partners that help us kind of scale it, push kind of the efficient frontier, further out using our partner skills and some capital. So I don't like to use the word carve out and spin-off. It sounds like it's unimportant. It is very important for us. But we're saying that the businesses are very different, and they need to be run separately but obviously intertwined by leveraging the capabilities. So just to repeat, we focused on the structural separations in the market, as Serigne mentioned. 12 out of 16 done, ticked the box. Topco has been set up, that we've done. And we're creating the accounting separation and all the work where we can have the opco shareholding from group into the topco, and we hope to get it all done by the end of quarter 1 2022.

Yes. Some detail was also shared with regard to specific markets like Nigeria, if I'm not mistaken. But that does tie into a question that we have from Mazi Asset Management, Jaynesh Bhana. And his question asks, is the longer-term goal for the fintech arm to own a banking license or to become a full-service bank? Or will banking be done through partnering with local banks?

Yes. I mean, it's a great question, and it has a couple of layers. We are not trying to be a bank. I think it's a very important part. I mean, if you go to a market like Ghana, we work very closely with the wholesale banks. Fidelity Bank is one that we work with. So at the local level, we work with banks. And depending on the license, I mean, we have to keep the float balances with banks. I mean, we don't sit with it, and we share the economics of that. But at the topco, I mean, what we basically wanted the topco is just the -- there's very specific assets that we believe can be leveraged into the opco. As I spoke about the IP, we're using the Ericsson Converged Wallet as the platform across all markets. So when Ericsson partner with us, they'll partner with us at the topco, and then we'll take the services right through into the operations, the partnerships. And I used the Mastercard example early on. So something like Nigeria PSB license is a banking license. So there are a variety of licenses, and I think Serigne showed that in the chart. But some are bank-led, a few, but some mostly are telco-led. So we'll take the appropriate license, but there's a level of risk that we would be willing as MTN to take. But after that, we actually start partnering with banks, and a lot of the partnerships banks are in the opcos.

Makes a lot more sense of providing clarity as to where we stand there. Serigne, let's come back to the various unicorns that you touched on. There was the wallet, insurance as well is one of them, and I know we'll also focus on in just a moment. But there is a question here that actually asks, in terms of the future of the fintech business itself, is the plan then to actually separate some of these unicorns eventually in the long term?

The answer is no for the moment. We are building, as I explained earlier, 5 unicorns in one business. And those businesses are too -- are very -- complement themselves. So -- and if you look at [indiscernible] again, she's using a wallet to transfer money. She got a loan to increase working capital to really accelerate her business. And she's ensuring her business with insurtech. And she can send money abroad with international remittance. So we think that today, where we are, we need really the businesses to be together and to leverage on synergies between each of them to be able to accelerate our plan. And also, if you remember, when we started fintech, it was embedded within the GSM business. And when it got real maturity, we started talking about a structural separation. So it is the same here. For the moment, we think that they need to be together. And maybe tomorrow, when one will need for license purposes or something else to be separated, we'll do so. But for the moment, we are building them together.

Fair point there. There is another question that we have from Alastair Jones. He's from New Street Research. And this question is focused on one of the unicorn elements, being Ayoba specifically. 5 million Ayoba users to date. Are there any markets which stand out as major contributors to this 5 million subscriber base? If so, can you explain why some markets have embraced Ayoba better than others?

Yes. Today, I can -- we can talk about 3 markets: South Africa, Nigeria and Ghana, where we have more customers. But we do believe that in all our markets by end of this year, we'll have good penetration when it comes to Ayoba. So -- and as I -- what I shared earlier, we have a strategy with 3 steps. The first one is really building the enablers. To really make sure that we solve the basics, we match as a top world-class messaging and live platforms. And the second one is really to improve them. And the third one will be to leverage. And we are on our way implementing our strategy. We did a lot of progress during the last first 3 to 4 months in this year. And we think that by end of June, we'll finalize the first phase. And the second phase will be finalized before 2023. And we believe that we are on our way building a customer base in -- on Ayoba to reach more than 19 million by end of this year.

Quite substantial in terms of those growth targets. There's a lot of excitement that's come through from our members of the investment community, and I will keep going with many of their questions. Some will also be a follow-up to themes that we did touch on slightly earlier in terms of the strategic separation, using the right word of [ webtech ]. I want us to address a question from Ziyad Joosub of Nedbank. This question asks, based on the digital revenue ambition for 2025 in the slide that you presented, payments and e-commerce is the largest incremental contributor of growth in absolute terms. Could you outline in a bit more detail the key drivers for the rapid scaling of payments and e-commerce?

So maybe to come back on that. So banktech lending will be the biggest contributor in term of growth, but e-commerce and payment also is very important. So how we are building our payment and e-commerce is that, first of all, there is an aspect of leverage. We have more than 47 million customers today actively using our Mobile Money platform. We'll end the year with 60 million. We have a merchant base of more than 500,000. We'll end the year with 1 million. So if you think about it, by end of this year, you'll have here a customer base of 60 million, merchant base of 1 million. So then if you put together in between them the platform, which will enable transactions between that merchant base and the customer base, so the customers will be able to shop online using our Mobile Money infrastructure, and the merchant will be able to export their product and services online. And then we think that, that product we are calling MoMo market that we are piloting in Ghana will be the biggest e-commerce platform or I like to call it enabler in Africa. And then you will really leverage also on our wallet. Today, the e-commerce platform in Africa, they have 2 major problems. The first one is branding. They spend a lot of money communicating for people to know about their brand and to trust them. As you know, MTN is the most trusted brand in Africa and now where we are operating. So that, we don't have a problem. We leverage on MTN branding. The second one is the rate of return is very high. When people, they order, the product comes, and they don't like it anymore, and they say, "I'm returning it." And the cost of just that is very high. So us, we will not have the problem because -- that problem because we have a wallet, and we'll build around that so that we secure the money in an account so that when you buy something, we don't -- and the customer -- when the customer approve, then we move the money. And we are leveraging -- and also, the third point is that we'll be leveraging a lot on our distribution network. Delivery is a big issue.

Yes.

So people will be able to go to our distribution agent network to collect the end point of collection and everything. So we think that MTN, we have big assets to leverage on. And also, we think that on technology-wise, we'll be announcing something maybe in the next 3 or 6 months, and a major partner we'll be working in also. But with -- to build really and accelerate our e-commerce and payment business.

That's quite substantial, addressing the needs of both businesses as well as consumers from all particular segments, and as you say, having conversations with the right collaborators to enhance this. So we're looking forward to the news that will be announced there. We had several questions that do want to build up on themes that were highlighted earlier, Ralph, and we did talk about the strategic separation of the fintech assets. And this question asks, Ralph, do you need to list the fintech business separately for it to be value-enhancing? Would you not be giving away the value prematurely? That's the question.

100% agree with that statement. We are very careful about this concept of listing. We speak about structural separation and the kind of value reveal. That does not mean -- that does not need to mean listing. So we will be very patient. We want to take things step-by-step, structural separate, create the topco. Topco has got the right assets, right relationships with -- bringing some strategic partners. And at that particular point, they may bring some capital. And as I said, we will maintain a controlled position. And it will apply on our minds, is there a listing needed or not? So we are not obsessed with this listing idea, but we are around kind of creating the clarity around the operating model and also the value reveal over time. So listing is, as Serigne has mentioned, it's not something that is super occupying our minds at the moment. And we'll take our time to get there, and we'll ultimately make a decision to [indiscernible]. So I don't think investors must be thinking that we want to do something prematurely. I mean, as you know, one of the big opportunities in a topco structure will probably be Nigeria. So if we list prematurely and call [indiscernible] the PSB, I think we'll give a lot of shareholder value away. So we're not obsessed with the listing part.

Fantastic. That does address the question that we had a follow-up as well. In terms of that opportunity within the fintech space, they ask whether we make acquisitions or consolidate. Are there some other opportunities with other players in the opco markets? And would it be possible for the MTN fintech to buy any of the already approved PSB licensees in Nigeria? So perhaps in segueing that conversation to then look...

Nigeria.

Yes, new opportunities specific to the Nigerian market where PSB licensees have already been approved.

No. Look, I mean, if you were to partner with an existing PSB, I mean, you still need to get the Central Bank of Nigeria approval. So I mean, it looks like a way to kind of accelerate, but it really isn't because the Central Bank of Nigeria, the governor still need to approve that. So I mean, as Karl said, we are patient around that. Karl is spending a lot of time trying to put up our position forward. And as he said, I think what is becoming patently clear is that the country is lagging in financial inclusion. And to deliver that financial inclusion, right now, the best form of it is kind of the mobile network operators because of the capillarity of the distribution that they have. So we will be patient on the PSB. On the opportunities to acquire assets to accelerate, I mean, we'll apply our minds. I mean, as I mentioned earlier on, we're going to see a transformation of Mobile Money that is USSD-driven into an app-based. So that journey between now and 2025, I think, will be very interesting around the opportunities for partnering. So we don't have solid plans exactly about which type of opportunities they will present. But we've done our own scanning. We know in each of the regions what they have sought. So we're applying our minds for that, but that doesn't make the investment case for now.

There's a lot that investors want clarity on. And I guess going back to the strategic separation of the fintech assets. And Alastair Jones from New Street Research also asks, when or if you sell your stake in the fintech businesses, will you use the proceeds to reinvest in the business or will it be used to pay down holdco debt?

Yes. I think investors think we want to pay down for the debt to 0. We know that there's an optimal mix of capital. To be clear, the asset realization program is what we use for deleveraging. Any investments are used to accelerate growth in the -- so whatever proceeds, call the mix that come with bringing in partners, they're used to actually drive the growth of the business. We're going to use other people's capital. It would be smart. You don't have to always use your own capital to improve returns and to kind of sponsor your own growth. So it's purely for accelerating those particular opportunities, particularly on the fintech side.

And as we heard, sort of did give us an overview regarding deleveraging and the opportunities that will be capitalized in that particular regard. Lots of excitement that come through and seems as though we're going back to the MoMo conversation and themes that we'd like to explore them. Perhaps you can both build on this response. They'd like to hear if you can discuss the merits and risks of open architecture in the MoMo business.

Yes. So thank you very much. We do believe that open architecture is more an opportunity for us, and we have been pioneering on that domain. So 2 years ago, we've launched our open API platform. So if you go into the Internet and you type momobusiness.com, you will see that you will find a portal where you can discover all our APIs. You can download documentation around it, and you can build your own services. When you're ready, there is a sandbox, you can test them. And then you can download the contract, sign them, and we'll just sign them, and your service can be live in more than -- less than 1 week. So that whole process for a new partner used to happen in 6 months, 1 year time frame. So for us, we think that we went into that because it is helping really to accelerate our business and to make it easier to partner with people. Because, remember, we are moving from a Mobile Money service provider to an open platform and platform business. And that -- to do that, you need to make sure that you enable also your partners to work with you and to -- in a much, much easier way. And it is what we've done with open API. And we have been very successful on that. Last month, that open API platform did -- we did have more than 10 million API calls. So I think that now we are one of the biggest API platform. We have the biggest API platform in Africa within our Mobile Money business. So we do think that it is an opportunity. And maybe I will let Ralph also talk about interoperability and what we are doing also in opening our ecosystem.

Yes. Thanks, Serigne. I think if you look [indiscernible] 3, 5 years out, I mean, I think if you look at this fintech space, interoperability will have to happen. So today, you take MoMo currency, competitors like Airtel, et cetera, if you want to increase the velocity flow of money, we'll to be able to take airtime -- sorry, to be able to take MoMo units and convert them into Airtel units or Safaricom units. Because what we're also building is remittance corridors. So what stops the person sending money from Ghana to Kenya within that fintech space. So our view is that interoperability is inevitable. And -- firstly, because the customers will demand it. And I think also to entrench the fintech space in the way that we see it is we're going to have to collaborate with our competitors as the old adage of compete and collaborate. And in some of the work that we've done the last couple of years, I mean, I think it's well understood that we've set up more early as kind of the interoperability opportunity. We started working with Orange, and we're seeing some good traction there. But we're encouraging other MNOs who got Mobile Money businesses to come in, and we've had some very good discussions pretty much the last couple of weeks that we're trying to bring them in to create Mowali. Mowali will not be run as a for-profit capability but to increase the kind of flow velocity in that system. And we see it as an opportunity given our scale. We don't see it as we lose out on that. So we're preparing for that kind of open architecture world, which is imminent in the next couple of years.

We've touched on a number of the unicorns, which have certainly been well positioned for growth. MoMo, specifically, Ayoba, a moment ago we discussed. But let's talk about insurance and tech insurance, which we know that you highlighted Sanlam and the strong partnership that has come on board there. Perhaps you can elaborate that, Serigne. And I understand that there might be future developments that we can also delve into, Ralph, in just a moment.

Sure. I talked about it during my presentation and how we think that Sanlam will help to accelerate our insurance strategy and scale, but maybe I will let Ralph to talk about it.

Serigne doesn't like to talk about the transaction stuff. He's [indiscernible] 2 people at it. No, look, I mean, firstly, we just want to acknowledge MMH, who we worked with the last 4 years, to create a very decent business in insurance. We've been operating in 3 markets, just under 7 million unique customers. And given their own strategy and our desire for a different kind of strategy, we've agreed to buy them out fully. We've actually signed the pins on all of that and subject to kind of regulatory approvals.

So the ink is dry on the paper.

Yes. The ink is dry on the paper. We're just waiting for the regulatory approvals to come through. And I just want to thank [indiscernible] and the team there for being constructive through the process. But as we started to think about insurtech, which is -- we basically got 11 million policies without too much sweat, to be quite honest. But we started talking to Sanlam. They have a very good footprint. They're in 33 African countries. We have an overlap in 15 markets. So currently, [indiscernible] 3 markets. But with Sanlam, we do at least 15 markets, but we're also thinking about doing insurance over the top. So in markets where we're not and some other MNOs may -- some other MNOs are interested in such a structure where we're able to offer that capability in markets where we don't have a footprint. But essentially, we are kind of very well progressed in discussions with Sanlam around them working with us to take over the higher platform and scale it across markets. Today, we talk about 7 million customers. I think you saw it on Serigne's chart. We think we should get to 33 million, providing very kind of micro insurance products that work for the market, some of your traditional insurance products. I think there's also big opportunity, particularly in South Africa, that we haven't really exploited fully, which is kind of device insurance. It's a big opportunity with one of our competitors. Nothing stops us with 10 billion plus device book to actually leverage that opportunity for further insurance. So some interesting stuff there. Yes. We're just trying to complete our process with Sanlam. So I think you'll see, in short term, being quite a scale business going forward.

Yes. And quite substantial given the numbers that you did quote. But is this a clear example then of how collaborative efforts make it easier as well to manage the regulatory landscape given the access to markets and, of course, the consumer needs that you're trying to address?

Absolutely. I mean, this is a clear example of partnership and capital because we can only get through what I call inefficient frontier with our own capability so far. But with smart partnerships and capital, we can move that efficient frontier because we don't have to worry about all the underwriting, claims processing. Serigne and his team don't really want to do that.

They do the fun stuff, Ralph. That's what you really need to be saying.

They do the fun stuff. So the back office, policy admin simplifying the system process and getting the economics to work. I mean, a partner like Sanlam, just does -- they do that in their sleep, okay? So what we do in our sleep is to get to the customer. So I think the combination of partnership and managing risk and capital investments -- as I said, I don't want to always use my own capital. And you've got to be smart about capital allocation. And sometimes, you use other people's capital to kind of enhance your returns, and I think that's the conversation we've been having with Sanlam. Very, very excited about that initiative. A few things to close out there, but I think we pretty much find each other, and I think there'll be more to discuss in coming weeks.

We'll close it off with a financial question, one that does come from Benguela Global Fund Managers, Itumeleng closing the question regarding EBITDA margins. He asks, what sort of EBITDA margins is management targeting in 2025 for the fintech division? And where are we currently running at? So perhaps you could give guidelines there.

Yes. I mean, I anticipate that question, but I've said to my team, I really don't like talking about EBITDA margin for fintech. It's a telco mindset. And the more we talk about EBITDA margin for fintech, I think the more we regress in thinking about it as a telecommunications product. It's not. If you were to say to yourself you've got 45% EBITDA margin, the question you'd ask yourself is, what is the CapEx intensity of it? I think what's more important, I think GMV, focusing on that metric going forward is going to be important. I think you've got to go all the way down to free cash flow because this is a capital-light business, okay, unlike the telco. So when you say a 45% EBITDA margin, you actually got to ask, but what's the CapEx intensity? And what is my free cash flow margin? So this is a high free cash flow margin business. So if I say to you 45%, then you might say, well, it actually looks like telco -- compared with the telco product. I think it's the wrong positioning. I mean, we'll continue to show the performance that Thato forced us to show with our full year results on fintech. But I think people are going to take the numbers all the way down, and you will see that. And that's one of the reasons we talk. As you heard from Tsholo, we feel relatively confident about the CapEx envelope because the fintech business is growing fast, but it's not consuming the same amount of capital. And as we said, we're going to use smart partnership capital as well to accelerate. So take your 45% if you want to, but I'm saying that's the wrong thing to think about with respect. This is a much lower CapEx business. And because, as I said, we'll not use partnerships going forward.

But we're looking forward to it, Ralph. I think there's certainly a lot of excitement and growth opportunity that we can anticipate from yourself and Serigne in this particular regard. And of course, there are more lives to be changed where there will be many more multiples of examples that we can share regarding how businesses, merchants and, of course, new entrepreneurship streams are developed by using the platform. Thank you so much. We unfortunately have to wrap it up there, but we have certainly seen quite a stream of questions come through regarding fintech. So lots of excitement and opportunities in this regard. Thank you so much to you both, Ralph and Serigne, for giving us your time today.

Thank you.

I appreciate it.

Thank you.

Thank you.

Well, we move on to our next presentation that where acting executive of the enterprise business unit, Tumi Chamayou, will be taking us through an overview of enterprise services. After this presentation, though, group COO, Jens Schulte-Bockum, will also join Tumi and myself for a Q&A session again.

Thank you very much, Gugu, and greetings, everybody. Let's talk enterprise. As a business enabler of choice in Africa, we realize that continuous investment is paramount to ensure that MTN's enterprise business solutions are able to meet the communication and ICT demands of business clients. EBU is a ZAR 16.8 billion revenue business, contributing 9.4% to MTN Group's total revenue. The bulk of this, at 75%, is derived from mobility services. From a segment perspective, we've seen equal contributions from the SMEs and domestic large enterprises and multinationals, better known as MNCs. Total EBU revenue is highly concentrated with 88% of contributions from our top 7 markets. Since we last spoke to you in the last Capital Markets Day, we've continued to see good growth from the business, which is largely driven by the enhanced focus on stabilizing and building the EBU business and the strong performance from Nigeria, which Karl took you through. Our strategy has been paying off. Over the past year, we reported nearly 60% increase in revenue from the MNCs, an excellent performance. We have now established a center of excellence for converged services in South Africa, and the MNCs are now serviced by a central team. Over the next few years, we aim to almost double the revenue contributions of this business to over ZAR 30 billion per annum. We believe this is possible given the changes we have made in the back end, but more importantly, the significant market opportunity. I'll explain how we will deliver on this target in the next few slides. But before I take you through how we will win in this, I thought it helpful to unpack the opportunity for you a little bit more. It is clear that given the enhanced technology use, there are sizable opportunities, particularly in the converged ICT space, where we anticipate closer to 50% growth in cloud and unified communication services. We will chase the sizable portion of this market by positioning our managed services networks, IoT and our cloud solutions. We will also continue to deliver our mobile and fixed enterprise offerings and strive to maintain market share in light of a somewhat flattish growth outlook. As a business, we are already positioned to enable us to harness the available opportunity in the converged ICT space. As a start, our advanced network and deep customer knowledge across the continent means we are second to none from both an infrastructure and a market knowledge perspective. Our strengths include our end-to-end operational processes as well as commercial capabilities, reflected through an extensive B2B commercial channels. The scale that we have also puts us in good fit, whether from a number of clients or operations perspectives. We have demonstrated our delivery on a number of different mandates, some of which I'll share with you on the slide. What you'll see on the left-hand side is an overview of some of our hero stories related to the end-to-end solutions we provide to our SMEs. These leverage our existing capabilities, including MoMo-enabled services, access to banking and seamless digital payments. We have provided future-proof, tailored connectivity solutions to these SMEs to address issues that were brought on by the pandemic such as work-from-home connectivity. Further to this, we have provided clients with digital skills program, asset for thought leaders and MTN's internal dedicated support teams. On the right-hand side is a large enterprise example where we drove a leading food and beverage multinational's software-defined wide area networks rollout, better known as SD-WAN, across 12 markets in Africa. This was delivered in collaboration with GlobalConnect team and enabled the clients, Africa zone team, to lead the charge versus other regions, including Europe, North America and Asia Pacific. This is the first of its kind solution globally, one that we plan on replicating as more customers move to cloud-based services. A dedicated center of excellence has been created to adapt to the new model. In order to replicate these types of successes, we have developed a center of excellence, which is based in South Africa and services the group. Having the center in a single place enables us to be agile and nimble while retaining the ability to scale and service group customers. It will enable us to evolve with the industry trends as a service solution, improving customer experience through custom analytics, edge computing and artificial intelligence learnings. The portfolio was formed on adjacencies with minimal investment. The center of excellence will further enable us to build scale and attract top talent, leveraging of MTN's existing strength as an admired brand. It will help us to also accelerate execution through our engagement with our partnership ecosystem. We are building on an extended portfolio, going beyond mobile and fixed services. And we have made a concerted effort to dedicate ring-fence OpEx and CapEx financing hosted in the center of excellence to ensure development of the new products and service lines. We have in place a number of interventions to manage our risks. These include leveraging of our center of excellence to be the unit of shared skills, underground engagements with regulators in the opcos to manage regulatory challenges, group-wide guidance frameworks to ensure data sovereignty and business continuity propositions to manage the impact of COVID-19. Our ambition for 2025 is to grow the enterprise business units contribution to over the ZAR 30 billion in revenue. We will achieve this by leveraging of our existing enterprise channel, cross-selling converged services into connectivity accounts and establishing a center of excellence for converged services in South Africa to position MTN as the leader in the African ICT space. And with that, ladies and gentlemen, that's our enterprise story. Thank you very much.

Well, Tumi's really given us some color and some detail into the growth ambitions as we head to 2025. But of course, also were going to help us understand more about the particular strategy and how it will be implemented to reach these targets. Jens also joins us back on the line through the power of technology to also add more details to this particular conversation. So Jens joins us on the line. Welcome, and thank you for your time. And Tumi, thank you for your time innovating yourself for this interaction and opportunity to really get further detail into enterprise and the growth that we've witnessed here. But I guess, let's actually start there by perhaps giving more detail, if you can add more color on the growth as well as what it is that we've done to accelerate the performance of the enterprise division.

Thank you very much, Gugu, and I think it's a very exciting journey that we've been on, especially in the last 3 years. So one thing that maybe I can just start to frame, let's say, the picture in which we are in. From around 2017, '18, '19, we've really put strategies in place in order of really solidifying and putting in place a solid platform of which we wanted to grow. So some of the elements that we did was really making sure that we are solidifying our commercial capabilities, looking at our operational efficiencies and really putting into place certain go-to-market strategies. So maybe let me start with the first one when it comes to our commercial capabilities. So one of the things that we've seen is that it is important for us to ensure that we've got great go-to-market value propositions, looking at them from an SME perspective and also from a large enterprise perspective. So when it comes to the small, medium enterprises across the continent, there are roughly around 40 million SMEs across our footprint, and only about 4 million of those are actually our customers. So one of the things that we had wanted to do was really ensure that we are having adequate sales coverage, really working with channel optimization and ensuring that they are strong customer touch points, whether it's from in-stores, whether it's telesales, whether it's also like from an omnichannel perspective. So we've done quite a lot of work with regards to various channel partnership programs that we've rolled out across all of our footprint. We've really also brought in place various capability and technology partners that have helped us also accelerate some of our value propositions. And in addition, we've also made sure that we professionalized our sales force through an initiative that we did in the Sales Academy. So that has helped us to really accelerate the MTN sales story, really let the market understand what value we have to bring and really also bring some confidence to the market that MTN is really there to help them solve their challenges. But if I can pivot over also to the large enterprise space, which is a much more professional, let's say, professional environment in terms of how they consume. We also started off with our sales force, making sure that they also understand what MTN has to bring to the customers' issues, really understand customers' pain points and also make sure that we are solidifying our own value propositions from an end-to-end perspective and not just selling products but also bringing a wider range of the value that we also bring. And if I can pivot also to the operational component, the key thing here was really about customer experience. How do we improve customer experience, how do we improve our processes, our systems and also ensure that the customers have a pain-free engagement, a pain-free experience with MTN. So those are some of the examples. I can go for some time on some of the initiatives that we've done, but that just gives you a snapshot of what we've been engaging.

And that's quite substantially investment in people first both internally to meet the customer needs by the end of the day.

Correct.

Hence, the growth that we're witnessing here. But perhaps you can add more color as to a market overview in terms of where the potential and the opportunities do lie and how it is that MTN hopes to take advantage of these opportunities that exist in the market.

So maybe just piggybacking off the discussion that we just had now, we've seen some turnarounds in some of our key markets, South Africa, Nigeria, that was discussed a little bit earlier with Godfrey and also with Karl. In 2019 to '20, we -- sorry, '18 to '19, we saw growth of about 9.3%. From '19 to '20, that growth was accelerated at about 14.3%. And we foresee that this growth will continue due to all the foundational elements that we've really put in place, and our ambition is to grow at accelerated growth of about 30% -- sorry, to ZAR 30 billion by 2025. Now some people can say that's really aggressive, but we really feel that we have done the basics. We've solidified the foundation. But now we want to grow up the stack and really make sure that we are helping our customers to really understand some of the other peripheral offerings around machine learning, AI, cloud offerings, in order to help them as enterprises to really help themselves solve their own customers' issues.

Makes sense. Tumi, it's quite exciting to see the growth prospects that exist. And as you said, you've got what's required within the foundation to ensure that this growth is possible. But I'm keen for us to reflect as well, and perhaps this is a question that both yourself and Jens can also build on, but the impact of COVID on the enterprise environment. Has that made it slightly challenging, maybe specifically in the last 14 months as working from home has been quite prevalent in many markets?

No, absolutely, Gugu. I think if you can look at COVID, COVID was detrimental to almost all of us. It was detrimental to societies, to families, but also specifically to enterprises. As I mentioned, the number of enterprises within our own footprint is about 40 million. 80% of the workforce are employed by the SMEs. So when the lockdowns happened, a lot of them were impacted. One of the things that we did, and I mean, I'll use an example from Nigeria, is that there was a program that was run called Revv. So the Revv program really tried to help these small and medium enterprises to really deal with a number of issues that are normal outside of COVID, but in COVID, they are accentuated. So if you think about access to market, how do they now deal with their own supply chain issues? So we used our digital platforms particularly in some of the things that Serigne spoke about earlier when it comes to the ayoba platforms and really helping them to understand that we've got more to offer than just connectivity. We also tried to help them in terms of understanding how do they also engage some of the MoMo business platforms, access to payments, access to banking services. And really also, again, as I said, give them the wealth and the breadth of what we've got to bring and also helping them go up the stack of our converged services, which is really something that we're building in the Center of Excellence that I spoke to you earlier about in the earlier session. But that really helps them to understand our offerings around security, cloud and how do they future-proof themselves. So it is important that in terms of uncertainty, that enterprises, whether be they small or large, make sure that they are future-proofed and take advantage of the technologies that are in play. Last but definitely not least is really access to skills, access to learning and how do we, as MTN, really help them. So COVID was a rude awakening for all of us, particularly in the enterprise space. And that is one of the reasons why we are so well invested in making sure that we help the enterprises weather the storms that may come today and possible storms of the future.

Yes. That light during uncertain times. Jens, perhaps you can also add on to this particular question.

Yes. Maybe as a build, I think Tumi is 100% right that COVID has posed some short-term challenges also in terms of payment behavior, bad debt. And I think we've managed that very, very carefully and quite successfully. The businesses have navigated through that phase. I'm more optimistic as to the longer-term effects because COVID is forcing companies to accelerate their digitization, and that's ultimately playing to our strength. It's one of the reasons why we want to get much more forcefully into the ICT side of the business, hence, the Center of Excellence that we are building. And what gives us the confidence is that we've seen over the last 3 years that if we show up, if we get the basics right, we can turn the business around. We've already shared some numbers. I think if you look at the South African market, MTN EBU in South Africa, the enterprise business unit, was a negative growth only 2 years ago. We are now growing double digit mostly on the back of connectivity. So we have the confidence that if we now build the more sophisticated product suites on top of that, we can further that growth and accelerate that and also bring that to the rest of the continent.

That's very important. And speaking about accelerating growth as well as accelerating opportunities that might exist, a question, I guess, that can be directed to the both of you from Ziyad Joosub of Nedbank. He asks, given your network leadership in South Africa and other markets, what are your thoughts on in-market acquisitions to accelerate scale, improve market share and acquire important skills similar to what multiple global telcos are currently doing? So perhaps if we could flesh that out, starting with you, Jens, and coming back to you, Tumi, for further perspective.

It's a good question. I have to be honest, we don't have any imminent plans, but it's something that we are reviewing. And clearly, as we are pushing into new capability domains, it would be quite prudent to accelerate that with targeted acquisitions particularly in ICT, but they also need to be manageable. We need to be able to digest. We need to make sure that these are good fit to our existing customer footprint, our sales capabilities. So I think we'll be very, very disciplined in looking at potential candidates. But 100%, if you look at areas like security, if you look at IoT, if you look at unified communications, I think we'll need a blend of partnerships and potentially acquisitions to accelerate our own offer portfolio and make sure that we stay at the forefront of developments. The one other element that I wanted to maybe add to that consideration is we are also looking very, very carefully at potential partnerships with the so-called hyperscalers. So if you look at the likes of AWS, Microsoft, Google, Alibaba, these folks are building massive cloud capabilities. And they are -- also, on top of that, they are developing a suite of enterprise-relevant services. What they don't have is capillarity of distribution. They don't have the integration capability with the connectivity side that we have. So that's also very attractive for us to basically leverage our existing enterprise business system as a partner for the hyperscalers, and that's another direction that we're looking into at this stage. Again, I can't disclose any results of that effort yet, but rest assured that we are working very, very hard to structure the right relationships in that domain.

Conversations are taking place and details [ to be said ] at a later date, but makes complete sense in terms of the relationships that need to be established and seeking those areas of great partnership that can be executed. Your thoughts, if you'd like to add on to that feedback, Tumi?

I think also maybe in one of the elements in the question was really around skills and how we're basically going to be addressing that. We do understand that this is obviously new areas that we're getting into. The skills are quite scarce in the space. But as Jens alluded, we are working with -- and we plan on working with an array of different partners in the system. And obviously, there will be some transference of various skills. We plan on taking everybody along on the journey. We want to start, obviously, internally with our own sales force that we have. So through our Sales Academy, there's a strong concerted effort in terms of not just ensuring that we professionalize our sales force, but also bringing on the external sales teams the various channels and really increasing that knowledge across the base. So it will not just start with the internal MTN people, but it will go into the channels, but also into the broader communities. And that's really one of the things that we're seeing as a flagship program going into the future.

That's quite important and perhaps takes us back to one of the closing slides that you had in your earlier presentation where you did allude to some of the challenges that might hamper some of your growth opportunities and ambitions there. Are you able to share some details as to how it is that MTN looks to navigate some of these challenges despite them being quite prevalent in the market?

No, absolutely. I think one of the things we can all agree on is that we are all very hungry for change. We're all very hungry for things to change, and speed is obviously the name of the game. So -- and it's not really just about looking at competitive forces, but it also has to do with the fact that this continent is really dire and it's needing a lot of solutions to come through. And these will come through the enterprises. It will come through the entrepreneurs. It will come through the tech start-ups. And we want to really be part of that journey. So our own internal engagements and how do we [ fasten ] that speed, but we've got great leadership in -- at play here. And when you hear what Ralph spoke about, what Jens is speaking about, there's a strong concerted effort to make us really move fast. The second element that I can talk to you about is that what we've just spoken about is really access to these high-talent individuals. But our brand, we've got this great brand strength. Everybody is really looking at MTN as one of the leaders. The hyperscalers that Jens spoke about are all very keen to work with us. So we try to mitigate that as well in terms of how do we accelerate those conversations. And the third component is really to do with our customers. We spoke about COVID and the need for digitization. Now with these challenges that people can't predict, it is important that they look at their overall business architectures, they look at their overall technical architectures and really think about how do they improve their own customer experience, how do they digitize their own flow of how the supply chains work, how do they also improve their own customer experience. A lot of organizations are being disrupted, and we believe that some of the solutions that we will provide will really help them in bridging some of those challenges that they will get. So we see them as challenges, but we also see them as opportunities.

Yes. Always opportunities within the market. I would like to build up on some of the themes that have been shared in terms of Ambition 2025 and the key focus specifically regarding shared value and ESG, which we will discuss after this segment, that play a very pertinent role in how it is that we roll out the strategy. And perhaps if we can start off with you, Jens, to talk about how the influences and the service that you do provide to your customers does have a clear impact on how businesses are able to be economically active and sustainable in the future and also then translating into economic opportunities for many more citizens right across the continent and on the ground. Perhaps if we can expand on this and how it really does speak to the pillar of shared value within Ambition 2025.

Yes. Thanks, Gugu. I love that question. I'm extremely passionate about what we can do on the continent in terms of offering new opportunities for customers but also for employees. And I've been absolutely fascinated by the speed at which MTN connect. And just building on some of the comments that Tumi made just a minute ago on skilling, we now have a number of examples inside the company where we started from very limited resources and expanded it just by injecting a little bit of talent, bringing bright, young African talent in scaling things up. I'm thinking of the CVM opportunity, customer value management, based on data analytics. We had nothing 3, 4 years ago. Now we have about 200 practitioners sitting across our markets, data scientists working on these type of opportunities, also active, of course, in the enterprise space. We talked about what we're doing on the fiber commercialization in an earlier presentation. Again, we had no external sales 3 years ago. Now we probably -- of the new sales, we probably already have 50% externally and only the other half then internally. And these opportunities abound. We are pushing into new spaces. So there is an internal component where we can create our own ecosystem later. My colleague, Charles, will talk about, of course, the technology road map and also Chenosis, the API marketplace where we can stimulate the developer ecosystem. So I -- what I've learned, probably I can say that with the authority of an outsider, is that Africa has a fascinating opportunity of young talent that can come in. And at the same time, where we're offering our digital services, particularly to SMEs, and the payment services that a minute ago Serigne talked about, we can create entirely new value chains for companies that take them literally out of the physical marketplace into the digital marketplace overnight. And that's what I'm passionate about. That's why I think that intersection of the technical capabilities that we have and the go-to-market that we can build in all of our markets with the talent of young, high-energy people we have in our organization, that's just the dynamite mix. And I'm deeply convinced that this will be at the core of societal development in Africa for the next few years. We are -- with digital inclusion and financial inclusion and enabling business productivity, we are touching on arguably the 3 most important development drivers of the continent.

Well, we're looking forward to these exciting changes that are quite imminent and part of the growth story. Thank you so much to you, Jens, for joining us virtually for this conversation and yourself, Tumi, as well, adding more color to the detail regarding how enterprise is certainly going to forge forward and meet the needs of customers through the investment it's made internally with staff and, of course, meeting the needs of their customers. Well, we now shift our focus to IoT, or the Internet of Things. It is certainly a significant opportunity to change lives. MTN South Africa -- enterprise business in South Africa has invested in the telemetry and network infrastructure to enable IoT applications for its customers. Let's take a look at this video. After it plays, it will not only give us more perspective in detail into how these changes are taking place on the ground, but when we come back, we'll get ready for our final session of the day. [Presentation]

Ladies and gentlemen, we will now take a short comfort break and return at 20 minutes past 2. That's 20 minutes past 2 for return. [Break]

Ladies and gentlemen, we will be starting shortly.

Welcome back to the MTN Capital Markets Day where we're taking a deep dive into MTN's Ambition 2025 strategy. We've been absorbing a lot of information throughout the day and certainly hope that you've got a better understanding of the different aspects and opcos of the business that are quite key in terms of driving the strategy. Well, to kick off the final session for today, MTN's Group Chief Regulatory and Corporate Affairs Officer, Felleng Sekha; and the Group Chief Risk Officer, Ferdi Moolman, will take us through how MTN will navigate the risk and regulatory environment through the Ambition 2025 journey.

We're continuously working on improving our governance structures. And as part of this, we've refreshed our Boards. We've strengthened the Board structure by creating subcommittees so that we're able to focus on risk issues in more of a detailed manner. We've also implemented the 3 line of defense risk management model, and this model allows us to identify risks easier. It improves communication both to the executive as well as to the Board. And it also ensures a focus on more of a risk culture approach in the company. To give you an idea of the 3 lines of defense, the first line of defense is really day-to-day management and operation of the company, identifying risks, putting controls in place. The second line of defense is risk management, and this is where we develop risk processes and where we also perform compliance test. And the third line of the management is internal audit. Of course, it is important to ensure that internal audit is independent. And on this basis, all the various audit committees report through to the -- all the various internal audit departments report through to the audit committees, and the audit departments also have a functional reporting straight into group. We work in 21 diverse countries in highly regulated environment. And because of our size and the industry we are in, the governments very often see us as a source of government revenue. So of course, it is important to pay our taxes and our levies when due, but more important is stakeholder management. So in terms of stakeholder management, we now have an international Advisory Board, which is a Board with nonfiduciary responsibility, and the Board basically advises the Board in -- the group Board in terms of international issues. And then we also have stakeholder management plan. The stakeholder management plan deals with identifying people that we need to relate with and the message that we need to pass across. In terms of corporate social responsibility, this is also important and a focus. And with the ESG getting more focus, I think the move will be more towards pushing ESG. The next risk, I think, that is important is the fact that we are moving towards a platform business. And moving towards this business will change the risk profile that we have, and we anticipate different risks becoming more important. I think also taking recent activity in the market that we've seen in the U.S. with cyber attacks, the denial of service attacks, these type of things, I think the next most important risk is probably around cybersecurity. The main challenge is that it's ever-changing and it needs constant monitoring. It's also important for us to gain access to experts in the field, not only experts that understand the political landscape, but experts that also understand technological development as well as global logistical challenges that we face today. Specifically on the Middle East, our approach is the same as all our markets. We conduct our business in a responsible and compliant manner. As part of Ambition 2025 and the group's Pan-African focus, we have announced that we will exit the Middle East markets in an orderly manner and phased manner. Of course, this also takes into account our risk framework and considerations. Cybersecurity has always been important, but even more so as we move into Ambition 2025 and we move into the platform business. And of course, the digital landscape is consistently changing, and cyber threat is also changing along with it. So we have identified this as a major issue to address. We've allocated CapEx to improve and strengthen our security controls, and we're also consulting with experts in the field to ensure that we are able to address the risk appropriately. Nigeria remains a very exciting market, and there's a lot of opportunity in Nigeria. We've taken a number of steps to reposition the company. We've broadened the shareholder base by listing. We've refreshed the Board. We've created subcommittees of the Board so that we can focus on areas of importance. We've got a very strong experienced team in place in Nigeria that understands the nuances of the market. And then we want to work towards a [ partner ] to solution type approach. So an example of this is where we open up our network for sharing on a national roaming basis.

We promote active engagement of our opco teams in the development of the regulatory frameworks and structures to ensure the requisite participation and understanding of goals, processes and procedures. Common KPIs [ set a ] group and cascaded to opcos are reviewed over the course of the year. At group level, we also follow up with opco teams as they implement to ensure compliance and the early identification and mitigation of gaps and issues. This enables us to provide necessary support and assistance, of course, in meeting their KPIs and addressing key risks and issues envisaged and as they arise over the course of the year. We also have effective and proactive issue monitoring and management both at group and opco levels, so we are able to quickly understand should there be a local issue. And yes, effectiveness is measured through ongoing assessment and analysis of resolution of the risks and concerns that arise. MTN is the leading operator in most of the markets it operates in. We are committed to complying with regulatory prescriptions and ensuring that our conduct is fair and considerate. We are also committed to the promotion of effective competition and fair market practices. It's important to note that market dominance per se is lawful and legitimate in any competitive market. The ultimate objective of regulation is to foster effective competition, not to penalize market leadership. Regulators impose fines for anticompetitive conduct and abuse of dominance. Regulators also declare operators dominant or SMP and apply ex ante interventions. In other [ ways ], the interventions are imposed prospectively to regulate future conduct in the market. This is to prevent undesirable market outcomes. In this case, the intervention does not require a fault on the part of the operator. This is the approach adopted in markets where MTN has been declared dominant. We have been declared dominant in 9 markets including, amongst others, Nigeria, eSwatini and recently, Ghana. These opcos have continued to operate successfully, fully compliant with SMP remedies such as mandatory national roaming, infrastructure sharing, price floors, et cetera. In all cases where we are declared dominant or SMP, the focus is compliance and research-based engagement to ensure that regulators follow proper process and apply industry best practice. Ongoing engagement with regulators and governments is key before, during and after SMP interventions. Whilst litigation is an option, it's always the last resort. We are therefore extensively engaged with our policymakers and regulators in our markets, including Ghana, in order to support government efforts in promoting best practice. MTN is also continuously reviewing its approach, adopting self-regulation strategies such as proactive infrastructure sharing and access on fair commercial terms. We believe in the rights of all people to communicate, access and share information freely and responsibly and to enjoy privacy and security regarding their data and their use of digital communications. We endeavor to protect the rights of all people using our services in their respective jurisdictions in which we operate. Most laws and licenses contain national interest clauses which require operators to disconnect network operations or suspend services upon request or instruction from government authorities. Such clauses usually come into effect during periods of civil unrest. When obliged to take steps which might impact digital human rights, we apply sound governance whilst complying with the law. Our approach: one, the request must be in writing, it must be made in accordance with the law and it must be issued by a legally authorized body or individual; two, upon request of the order to disconnect or seize operations or suspend services, a notice is issued to all stakeholders accompanied by a statement issued on all media platforms; three, ongoing engagement with authorities to limit duration of the suspension of services; and four, we maintain a register and publish all service disruption instructions. We work continuously on the issue of digital human rights, and our efforts were recognized in the 2020 RDR Index, that's Ranking Digital Rights, where we made the greatest overall improvement of any company. We have developed a taxonomy of the 10 common regulatory risks that we track monthly, quarterly and annually. The top 3 risks are: license renewals and regulatory reform, which account for 21%; consumer protection accounts for 17%; and competition, regulation and SMP accounts for 16%. [ Unpacking ] this a bit. In terms of license renewals and regulatory reform, we have in place a license renewal playbook which enables us to prepare for license renewals in advance, and we also conduct license fee benchmarks to guide license fee negotiations. Our research and insights team provides input into legislative, public policy and regulatory developments as part of our evidence-based stakeholder engagement strategy. We also make inputs through global and local industry bodies. On consumer protection, these include issues such as quality of service, affordability, coverage, et cetera. We work closely with regulatory agencies, consumer advocacy groups. And we integrate all the feedback from them and from our reputation index survey for our remediation plans. In terms of SMP or market dominance, we focus on compliance and self-regulation.

Well, those were certainly very [ poignant ] points that were made there by both Ferdi and Felleng for us to really get to understand the risks as well as the regulatory environment, which hopefully provides us with a lot more detail and an understanding as to how MTN Group is really navigating the many landscapes that it operates in. But we shift our focus now to environmental, social and governance, or ESG. It's certainly at the core of MTN's strategy. The company has made good progress in its sustainability efforts to date and have a lot more planned as witnessed in Ambition 2025. Now a video will give us an overview of MTN's ESG at the core philosophy, followed by Group Executive for Corporate Affairs and Sustainability, Nompilo Morafo, who will deliver her ESG at the core presentation. [Presentation]

Hi, everyone. I'm going to take a few minutes to highlight why ESG is at the core of MTN's Ambition 2025 strategy. A key enabler of our Ambition 2025 is to continue to ensure that ESG stays at the core of how we deliver on our business strategy. It is with this in mind that our sustainability vision is very clear. It is to create shared value for stakeholders through responsible environmental, social and governance practices. We deliver on this vision through a 4-pillar strategy and framework which over and above the well understood E, S and G, includes creating economic value and ultimately provides broader social economic benefits to society through our business plan. These have also been defined in line with the UN Sustainable Development Goals, ensuring that MTN continuously plays its role in the development across our markets. Our framework is unchanged across MTN's operating companies and is complemented by a set of policies and procedures addressing each and every area. To reinforce our commitment, MTN Group President and CEO has accepted 10% of total STI weight for 2021 linked to ESG performance. We have made remarkable progress in ESG, but we recognize that there is so much that we can still achieve. And our eco-responsibility pillar, by 2030, we aim to reduce MTN's absolute emissions by 47% and have made a commitment to net 0 emissions by 2040. This initiative is part of the GSMA-led industry-wide plan to achieve net 0 greenhouse gas emissions. We further strive to deliver a 77.6% reduction in energy consumption per MTN subscriber. We aim to achieve our targets by ensuring that our sites are at least 15% powered by renewable energy by 2030. We have taken great strides to revise our approach to digital human rights and driving greater levels of transparency. We have revised our digital human rights policy and due diligence approach to be a lot more proactive. This is applied across our markets. When we receive directives to restrict Internet services, we conduct a thorough assessment to establish the legal basis of the request before we can comply. You may have seen a recent example of MTN Uganda Internet shutdown whereby the CEO triggered immediately an assessment and ensured that we notified our customers and stakeholders on time via different channels. We have published our 2020 transparency report, which has been well received by all stakeholders. We will continuously revise this report to ensure that we factor in the feedback by stakeholders as it was our first one. We are also encouraged to be recognized as a company with the greatest overall improvement by Ranking Digital Rights in their 2020 index. We have reached a significant milestone of 33% female representation at Board level and 29% in senior management level, which are both above global averages. We enable thriving communities by creating jobs, equipping our people and African youth for the future world of work while always upholding the rights of all our customers. A significant amount of effort has been placed under governance pillar. You would have seen the changes that have been made to our leadership structures with a focus on risk and governance. Internally, we also will continue to drive a focus on ethics and integrity, ensuring that our teams, suppliers and our partners annually complete an ethics training. These efforts have not gone unnoticed. The annual reputation index survey noted an improvement in MTN's reputation and trust with stakeholders to 79% compared to 75% in the previous year. MTN has a very well-established and robust stakeholder framework that was established in 2018 in order for us to improve how we communicate and engage with our stakeholders. With a view to further provide social and economic benefits to our society, we have managed to reduce data tariffs with an average of 32.9%, bringing down the cost to communicate across markets. We have spent in excess of ZAR 50 billion on our networks, which provide a backbone for the telecommunications infrastructure in our nation states. Through our operations, we have contributed more than ZAR 30 billion in tax as a leading taxpayer in all our markets, and we continue to be a leading taxpayer in all markets. Working alongside our Investor Relations colleagues, it's important that we continuously engage with our ESG rating agencies in order for us to be able to continuously establish a baseline across priority firms that rate our performance. We analyze and categorize according to the following improvement opportunities: transparency opportunity, management opportunity, correction opportunity, engagement opportunity, which all help us to develop an action plan on how we can improve our ratings. These improvement areas are then incorporated into MTN's overall ESG KPIs. In conclusion, MTN strives for a step change of our ESG performance, and the most important part will always be enhancing disclosure. As mentioned on the previous slides, we are committed to reducing our environmental impact to deliver net 0 by 2040. We will continue to support vibrant and successful communities by minimizing our digital human rights impact by creating space for all people using our services to freely communicate and enjoy the right to privacy and security. Broad-based ownership of our operations beyond local listings will remain important. We will continue to accelerate our approach to diversity and inclusion. We intend to continue to effectively respond to COVID-19 through Y'ello Hope program. We pride ourselves on the strong governance and ethical culture especially internally. We are committed to connecting the unconnected and by continuously innovating our products and services. We will continue to drive digital and financial inclusion to close the digital and financial divide because we believe everybody deserves the benefits of a modern connected life. Hopefully, this has provided you with a good context of our ESG positioning and how it is at the core of everything that we do. Thank you very much for your attention.

Well, thank you very much, Nompilo, for giving us some of those fascinating insights and key measures that we can look out for. We'll be seeing Nompilo again in about 20 minutes' time for live Q&A where we have the opportunity to address some of these questions and concerns regarding ESG. But first, Group Chief Technology Information Officer, Charles Molapisi, will take us through MTN's technology platforms second to none strategy.

Thank you very much, Gugu, and good afternoon to everybody. It is my pleasure to speak about technology platforms second to none, which is a vital enabler of our overall Ambition 2025 strategy. MTN believes that our ability to pivot Ambition 2025 hinges on superior network performance and the ability to provide technology platforms that are second to none. The investment we make will help us build technology platform to provide customers with a seamless and distinctive network experience. Therefore, what do we mean when we say technology platforms second to none? We mean that we will build capabilities to accelerate the following: retain the #1 network NPS position across our markets, improving loyalty and customer lifetime value; be the leader in terms of network coverage, fiber and customer experience; scalable cloud-native infrastructure as we move IT and network workloads to the public cloud; provide zero-touch service-aware networks; deliver real-time AI and machine learning-driven insights and decisions. That will deliver what we call a [ CODDIS ] architecture, which is converged, open, data-driven, intelligent and secure. As mentioned earlier, technology is at the [ cold ] phase of Ambition 2025. That is why we formulated a program to drive this enablement. We refer to this program as OXyGEN. The OXyGEN program is a fusion of 28 future-proof internal programs that are fused into one super program to create a predictable architecture that is open and future-proof. This architecture will provide capabilities that will enable channel expansion, IT transformation, enterprise and business capabilities and network and operations. Through the program -- the OXyGEN program, [ we've created an ] index, which is a weighted average score across all operating companies. With this index, we are able to track the maturity level of every opco across the group and therefore create an aggregate score to the total group. With this, we are able to decide on the required level of investment. Our ambition, of course, is to deliver 81% OXyGEN level index from 2023 and beyond. As Ralph mentioned earlier, Ambition 2025 is anchored on 5 platforms: MoMo, ayoba platform, enterprise, NaaS and Chenosis. These platforms will deliver the following: growing our core subscriber base through the second to none network and expanding digital acquisition channels. This platform, of course, will drive the doubling of data with 3G and 4G network expansion to what we refer to as a smart CapEx model. Through this platform, of course, we'll ensure [ that we have ] MoMo users and scale the capability across our markets. We'll drive customer adoption of ayoba, and we'll grow EBU revenue in the region through innovative solutions and partnerships. As part of the OXyGEN program, as you can see on the mapping of the chart that you are looking at now, is that for these platforms, we have clearly met the required targeted technical enablement capabilities. All these platforms will benefit from the core technology layer, hence, our emphasis on one API layer, one data lake and one network. We're also clear that as we pivot to platforms and as we build these new capabilities, we will still need to ensure that we support the core business. From a tech perspective, our view is that we remain focused as we pivot and continue to support the core business of mobile voice and data. Well, since fintech, like Serigne has outlined, is a key and critical growth area for business. I'll provide more color on the role of technology in delivering the architecture plans. I'll also cover One API layer, One Data Lake and One Network. Now on fintech, the slide that you're looking, I know it's a slightly busy slide. But what a slide does is it provides an overview of the short-term priorities in terms of evolving architecture capabilities for fintech. In the last few years, we've made progress in building the wireless and payment infrastructure as well as our new business, InsurTech. With the number of other elements that are currently in progress, this includes channel and UX, BankTech, e-commerce, which already live currently in Ghana, and we'll continue to roll out across the group in 2022. We're also giving more attention to AML, particularly information security as we continue to accelerate the deployment of CV and propositions and loyalty management on the platform. Now let me touch a little bit on One Network. Again, like I said, that we are driven to create the #1 network as well as IT capabilities that serve the customers and business needs in agile and also in a way that we improve customer loyalty and lifetime value. Our key achievements are the following: currently, we are the #1 network in terms of Net Promoter Score in 13 markets, particularly the key markets like South Africa, Nigeria, Ghana and Cameroon. We will see strong improvement in voice and data metrics with a superior customer experience translating into retention of our customer base. You can see on the chart, that is noticeably lower drop call rates in most markets as we speak. We're also supporting the business by broadening our commercial addressable base across the segments of the network, which is 2G, 3G and 4G. This will further propagate more population penetration as we go into 2021. We will bring in 2021, that's in 2021, on the 4G network, additional 55 million of our people will be under the cover of 4G. This will bring the total base of our customers under 4G to close to 400 million in the markets in which we operate. Let me touch a little bit again on One Network, but the emphasis on 5G. So in terms of 5G, the market deployment, like you all know, will be dependent on the release of platform by national regulators. But I'm also happy to report that we're making progress on our 5G readiness in our key markets, and we can see the green light for access and transport networks. I also want to emphasize that as we upgrade -- currently as we upgrade and build capacity in our networks, we take advantage by making the segments of the network, whether the radio, the transmission or the core to be 5G capable. Let me mention that our roll out of 5G will be purely targeted and use case-led. The 4 initiatives that will enable 5G rollout in existing CapEx envelope will be the following: we will enable 5G-ready base bands units or the computing layer as part of the ongoing radio access network modernization programs. This will also include sweating existing packet core network as we launch 5G because the launch of 5G in non-standalone mode does not require a new core environment. So we continue using the existing platform that you have on the 4G. We'll also leverage a large fiber infrastructure that we deployed under the 4G network. This also we targeted the high-value areas and hotspots in the initial phases of the rollout. We are currently providing fixed and mobile 5G services in South Africa, and we're hoping that Nigeria, depending on the regulatory framework, will be able to launch this year with federal [ hours ] that we are planning in all our markets or a number of markets that are planned for 2022 and maybe 2023. Continuing on One Network. Let me talk about an issue that is very topical, open RAN. Though the technology is nascent, we believe in the premise of this new technology. We have 4 solution providers and top system integrators have been selected already. We are currently working on lab validation with potential field trials that are planned in the second half of 2021 in the key markets that I do want to plan, they're going to deploy Guinea-Conakry and Liberia. I want to talk about Project Zero, and I believe that a lot have covered this, but let me give a bit of emphasis from a technology perspective. This is driven by ESG as a core forecast in our business. In our efforts to decarbonize while driving an enterprise and group-wide program called Project Zero. We are making good progress in this regard. As a group CTIO for instance, I created a [ KPO ] on this and as part of my performance, and this will be further cascaded to all technology functions across the group. What do we think we're going to achieve? We have set ourselves the trust by 2030. We aim to reach a 47% average reduction in absolute emissions for scope 1, 2 and 3. 78% average reduction in energy consumption per sub. 15% of our sites, we intended, must be powered by renewable energy. In addition, we're also making sure that our discussion with the Tower Co as we go into new contracts while building the targets for Project Zero. I want to talk about One API. What do we mean? On One API layer, my emphasis is this, is that there is no digital transformation, no platform play without APIs. The API's fast enterprise will enhance organizational value by doing the following: this platform will enable channel expansion; it is through this platform that we have the ability to onboard or integrate new third-party players on our platforms; through this platform, we facilitate growth strategies and new business models as we continue to productize the core assets and capabilities of our business; we'll use this platform to accelerate time to market through the reusability of API functionalities. Ambition 2025, in my view, demands that we accelerate to what is referred to as tech intensity. What do I mean? Tech intensity means the ability to accelerate the overall tech capabilities within our business. This will enable us to move from what is a telco into a techco. To this end, through my organization, through the group tech organization, we are now working on establishing a software development competition center to ensure that we inject software development capabilities within the business. Let's talk about data lake. Analytics and the ability to harness customer data points is critical in supporting our ambition, hence, our emphasis on One Data Lake. Through the data lake, we're transforming to a data organization, are currently live in 11 markets with 5 additional markets in 2021 and plan to be live in all markets by 2023. Currently, we are processing trillions of records per month across the group with 30 million transactions per minute in Nigeria, and we have now about 1,300 data feeds going into data lake. There are over 25 advanced analytics use cases that cover customer experience, customer engagement, AML and fraud. We also have over 300 employees across the group, which are trained to new data management capabilities. Regarding AI and ML, the data lake focus supports our efforts of making MTN AI an automated organization. Our strategy is comprised of the following: first, on operations. While working on implementing self-optimizing networks in South Africa in 2021 and then rollout to other operating companies by 2022, we're also planning to have predictive network operations in key markets by 2022. AI and ML-powered contact centers, as we speak, are being rolled out in 4 of operating companies. On service-focused AI, we have rolled out chat bots in Nigeria. It will be rolled out in all markets by 2023. We currently have deployed about, in 19 OpCos, the customer value management capabilities. On platforms, we plan to roll out cognitive bots in all OpCos by 2023. And fintech decisioning and credit scoring is currently live in 15 operating companies. We have a disciplined approach to CapEx, which is very, very critical. With the CapEx intensity reducing to 16% through effective cost initiatives. Over the past 3 years, CapEx has been around, let's say, ZAR 26 billion to ZAR 30 billion per annum. Through our smart CapEx drive, our stable CapEx envelope has delivered over 200% increase in annual data traffic from 2018 to 2021. We have deployed over 41,000 network sites and 80,000 logical sites across our footprint. The digital economy and technological innovation is within opportunity for growth, bring about their own risk. The key risk we have identified so far are the following: we have cybersecurity; geopolitical risk associated with vendors; semiconductor supply chain; and the ongoing effects of COVID-19. However, I need to give the assurance that we believe we have appropriately prepared to mitigate this risk through deliberate interventions and putting necessary protocols in place. We'll continue to enhance and execute on group cybersecurity program under our marshall plan program. We have onboarded a strong international security organizations as part of protective -- proactive cyber defense methods. On geopolitical risk, we're ensured that we have got proper performance bonds with the vendors when we keep -- when we procure equipment. In terms of supply chain, we secured 12 months of rolling spares stock and continue to monitor it. We successfully managed the data traffic emanating from COVID-19 period. We continue to add capacity on the core and the radio network in order to ensure that we stay ahead of the curve. As I move to close, I want to cover our ambitions for 2025. We want to have the #1 network NPS position across 17 operating companies by 2025. We intend to reach a score of 81% on our OXyGEN Maturity Index by 2023 and beyond. We plan to have 135,000 kilometers of fiber footprints to enable us to become the #1 African fiber player. We plan to have 40% of our sites with high capacity backhaul connectivity. We'll have real-time AI and ML decisions across markets driven by One Data Lake. We'll have about 40% of our network and IT applications migrated to the cloud. We'll have an open platform ecosystem for partners and developers, which should be enabled by One API principle. With these essentials, we'll provide the leading network coverage across the group by 2025. So I hope that this provides you with a good sense of what we mean by technology platform, second to none. And really how this enables growth in our connectivity business and platforms. Thank you very much.

Well, some significant insights that came through there from Charles on technology platform, second to none. As you've heard it, he's quoted #1 several times, and we'll get into that in just a moment as we do have Charles and Nompilo to build up on the ESG conversation. Thank you so much to you both for joining us today.

Thank you.

Well, we're looking forward to the vigorous conversations and questions that many of our investors have actually posed to you, but I think Charles, let's pick up regarding some of the feedback that you've shared. Technology platform, second to none. You've highlighted much of the important technology that is required in order to roll out these ambitions. But I guess, give us a quick refresh and a top line reminder as to why this is so key in order to unlock more value for the group?

Yes. I mean -- Gugu, thanks for the question. I mean first of all, it's important to say that tech enablement or technology is really the fulcrum of Ambition 2025. And whether you're looking at fintech in terms of the new architecture, supporting the unicorns that Serigne wants to build to Ayoba integration or API integration. Because, again, essentially, Ayoba is an amalgamation of multiple integration points. So you need platforms that are second to none to be able to achieve that. We look at enterprise, I mean, enterprise, particularly the ICT services, what is going to be cloud, IoT, UCC communications, all of those are platforms. What is network and service, or NAS? Or what is [indiscernible] which is really a huge marketplace or a labor of APIs, all those are platforms. So it's important that as we pivot, the layer of tech is robust. And that's why we're saying technology platforms are second to none. Also, it's important that as we pivot, we remember that we still have the core business to look after. And hence, the biggest focus, again, that we're still putting on the core connectivity layer, that's why we say One Network, One API layer and One Data Lake. And eventually, what we want to achieve is what is called -- what we call a [ coolest ] architecture, which is a [ convex ] architecture, which is open, which is intelligent, distributed because of cloud and edge. And of course, which is secure.

Very important that you mentioned that. And that, of course, requires CapEx, which was alluded to early on in previous conversations that we heard. But I'm hoping that you can emphasize here and give us more clarity if we could unpack CapEx guidance from your perspective and how you'll be able to maintain current levels of network infrastructure investment requirements.

Very, very important question. I think you heard Ralph and Tsholo, and I mean you heard the CEOs as well, speaking about our consistency in maintaining the CapEx envelope, very, very critical. So I'll headline my answer by saying that from 2018 to 2020, we've now delivered almost 200% increase in data traffic. We did this without breaking the CapEx envelope, very, very important. So I guess, maybe to give a little bit of color in terms of the how, how we're achieving this thing? We can look at 2 pillars. What I'll call maybe the optimization of the input cost in terms of what we need to negotiate from a procurement perspective or maybe the technology interventions. So let's first start with tech, what are we doing from a tech perspective? In one of the discussions, Jens was talking about spectral efficient technologies, which is 4G. So it means that we need to reform and repropose traditional 2G spectrum and move it to much more efficient technologies like 4G, so we're doing that. These new technologies were 4x4 MIMO or 256-QAM, all those helps us to be able to deliver better throughput of data and better capacity on the existing suite finish on the network. You can talk about also on the core network, another work that we're doing is that, knowing the core network, you should see it on proprietary platforms. We are now decoupling the software and the hardware, and we're moving to what is referred to as [ COST, or commercial over the shared platforms, ] that helps us to be able to bring the cost down. Now if you go into the unit cost, which is really driven largely by Dirk Karl, who's our Head of Procurement in collaboration with us from a tech perspective, in the last 2 years, we ran modernization programs in South Africa and across multiple markets. We're able to do that by reducing the cost of [indiscernible] orders 50% reduction. That goes a long way in helping us to be able to compete and to roll out our CapEx and to still keep the CapEx envelope. Again, another real cost reduction, maybe on transmission. The transmission here could be talking about fiber optics or maybe even microwave, 20% to 30% reduction at unit cost levels have done that. On the core network as well, a lot of work we did. We bring the cost down going into a few model, a reduction of about 20% to 30% reduction in terms of cost. So 2 pillars, reduction in terms of unit cost driven largely by Dirk and his team with the support of technology, technical interventions driven by myself and Dirk as well, in the background, helping us to go through this. So we believe that with all this -- and we'll continue to do that. We believe that all of these interventions will really help us to arrest any possible expansion of the CapEx envelope.

It sounds like a tight pole of boat that you're running and, of course, making sure that you're managing those efficiencies correctly. A question to both of you and really building up on the theme of ESG that has come through quite prominently in the presentation today and the targets ahead of 2040. I'm keen to understand from the both of you as to what conversations have been taking place with some of your third parties in terms of having them participate on board with the emission reductions. Are they responsive? What feedback are we hearing and how participative are they in this regard? Perhaps, you can take that, Nompilo, and hear from Charles, too.

So thank you, Gugu, for that question. So Charles will take you through what our Project Zero project looks like. So in terms of our partnerships, MTN has partnered with many industry bodies, for instance, GSMA. We are partners now with [ Jack and Jessie, ] which are also the industry board that overlooks into the supply chain model in terms of how can our third parties actually really reduce emissions. So it's something that we have seen all parts that are coming on board. And through the industry bodies like [ Jack and Jessie ], we've been able to promote ESG within our supply chain overall. So in looking at scope 1 and scope 2 currently, from 2014 onwards, we're sitting at about 50% and now it reduced significantly to about 20% in 2019. This is something that we want to drive through Project Zero, which Charles will elaborate on more. But from a partnership perspective, we're really hoping that as we go along this chain of reducing emissions in our infrastructure, going into renewables going forward, that we'll be able to have much broader conversations, especially through our industry bodies that we're participating in.

Yes. And Gugu, just to build on what Nompilo is saying. You had Ralph talk about ESG at the core. I think particularly what that means, of course, it means that this is not something that is sitting at the periphery of our business. This is actually at the [ clutch ] of it in terms of the business models and the strategy of our business. So it's very, very important. But going directly on the question you're asking about third parties, our view is that this will take collaboration and innovation because, again, we see 50% of the emissions come from the side of scope 3. So the biggest Tower Co providers, if you look at them, most of them are common, in terms of the infrastructure they provide to multiple MNOs. So you need an industry approach, and we're doing that. So there will be an engagement to work with the GSMA to engage the telco providers as an industry. But I'm also optimistic, I mean, looking at some of them, what they're doing already, they themselves are taking proactive steps to address that, not necessarily waiting for us at MNO to push them because they also [indiscernible] their own business. So there are a lot of innovation that we're working -- want together with them to address that. So I believe that through collaboration and innovation, I think, we'll be able to get support that we want, and I think we'll be able to actually achieve ambitions.

Really sounds like the target's on track and at least the collaborative efforts remain in place. Let's go back to climate change perhaps and focus on that, specifically with yourself on Nompilo. If you can provide us with some kind of oversight regarding this issue and any highlights in terms of progress that has been made in order to address this theme.

Yes. As Charles has mentioned, for MTN, we're not doing this for lip service. So it's something that we take very seriously from the Board up towards the executive management. So the recent development that has happened that really uplifts in terms of how we report and how we provide oversight into these areas that we've appointed our Chairman of Social and Ethics Committee as an oversight, so we call him a climate change Board member and a Director. So that basically means that we're just frequently going to be reporting on the issue of sustainability, which we report on, but climate change is a major part of it. So he's been appointed as a Climate Director for MTN. The oversight really has been given to the Social and Ethics Committee, but the conversation around sustainability, climate change, ESG overall happens at a Board-level at MTN and we report frequently. So every quarter, we have a much broader conversation that talks into the E, S and the G, whereby, we bring all the participants, like, for instance, Charles looking more at the Project Zero and how we're going to have reports on our science-based targets. So the Board -- and also have that annualized plan that we say every year, this is what we're looking at, and this is how we're going to meet our targets. But we're feeling comfortable that the conversation has really been elevated to the Board level, which has an oversight on everything that we do around this area, not just climate change, but the sustainability area as a whole.

Very important that we do have that kind of support. I'd like us to zone in to the S slightly for a moment of ESG, Nompilo. And we have heard themes that come across to actually show the commitment that MTN Group does have to the people of the continent and the kind of change we're trying to drive with entrepreneurship support and the various offerings that your platforms provide. Give us a little bit more detail, specifically as to how MTN continues to focus on social development on the continent, specifically given the climate that we're in.

Yes. Thanks, Gugu, for that question. I think MTN is a company who recognizes that we can't really flourish if the communities that we operate in are not healthy. Meaning that, with the pandemic, we saw that there's been a lot of stress that comes from lockdowns, and people are not employed, and there's just no jobs. So MTN responded swiftly at the onset of COVID with our Y'ello Hope program, which we really prioritized our staff, communities, stakeholders and customers overall and also our business so that we're able to respond in a manner that's appropriate and actually brings value and make a difference in people's lives. I'm happy to say that, although we don't do these things for PR reasons, we were mentioned in the Brand Africa survey as a company that was seen as being most helpful during the pandemic, next to the World Health Organization. So what does it tell us as an organization? It tells us that our customers and our stakeholders, they're seeing the value and the impact of the programs. Because without their feedback, we would not know if we're doing the right things. So that was quite encouraging. Recently, we are partnering with the AU and Africa CDC. We have given a donation of about USD 25 million towards the vaccination program by the AU. That also is a very important part of what MTN does for society because, again, the health of Africa and the health of our communities is very important to us. So that's really been the highlights of our S part in terms of the ESG. But we have more -- we have 14 foundations across our market. We spent about ZAR 600 million annually in terms of community development. We focus a lot on youth employment. We focus a lot on development. We focus on women and also young people in order for them to participate meaningfully in the ICT sector, which is something that we're very passionate about. Because Africa has got a young population, so we're looking at how we can ensure that we don't leave anybody behind. We make sure that people truly benefits from the technology that's being brought by MTN.

Let's take a look at the G very briefly and maybe go back to the full acronym of ESG and that we have witnessed that there has been a significant shift in changes in terms of how the group has been managing this with its various stakeholders at a group level. I'm keen to understand, as we tie this into Ambition 2025, as to how this plays, ESG continues to play a very critical role in the implementation of the strategy and how we ensure that the different elements of the group to actively participate in reaching these targets that have been set.

Yes. MTN, around 2018, we developed our own stakeholder engagement plan. So basically, the reason why we did that is because our circumstances in the markets that we operate in are quite unique. So it becomes very difficult to just plug-and-play a rep check that's generic that's being done by other corporates. So we developed our own so that we can be able to really prioritize the stakeholders that are material to the organization, looking at how the sentiment of the organization is actually being seen by the stakeholders that we serve in the communities across our markets. Over the past 3 years, it's been improving significantly. We have made sure that our stakeholder engagement plan is supported by a reputation index so we don't just do the engagement only. We also check annually in terms of the health of our relationship with our stakeholders. We're sitting now at 79%, which were told by benchmarks like RepCheck, et cetera, that that's a healthy relationship you can have with your stakeholders. There's areas for improvement. For instance, we need to do more in terms of localization. We need to do more in terms of creating jobs. But what we've seen is that, with all of that and the focus that the organization has put on ESG as a whole, it elevates the conversation that says, we're not only looking at what we do from a community development perspective, but we look at that more important area that's got shared value in terms of economic value, in terms of uplifting people's lives through the business model of what we do as a company. So that's been very encouraging. I think we pride ourselves on an ethics and the covenant structure as an organization. Annually, we train people. Our people retrain our third parties. We train the players on ethics. And it's something that we're continuously going to be doing. I'm sure you've seen the announcements around the changes, around the structure of the organization to focus more on risk and compliance as well. So we've done a lot, and there's more that we're still going to do. We've taken great strides in terms of uplifting our disclosure. We publish our transparency report, which is a very important part of our governance. This year as well, the Ranking Digital Rights ranked MTN as the most improved company when it comes to human rights reporting. So that's something that we really want to continue doing because the more we elevate the conversation and we disclose what we're doing, we stay transparent to the customers and the communities that we serve in terms of them knowing how we actually conduct our business from an ESG perspective.

Great progress that's being maintained, nonetheless. Charles, I would like to say -- going to come back to you for a moment as we have some investors who are quite keen to get in to the 28 future-proof points that you had highlighted in those programs that you referred to within your presentation. The question really does want you to elaborate if this is a target for the group or for each business unit. And they asked, 28 is quite a large number. Is this attainable or slightly tricky to manage?

Look, we -- the program is called OXyGEN. And like I said early on that the tech really is a fulcrum of Ambition 2025. We formulated a transparent and a future-proof program, which is very important, I think, in terms of the future of architecture. So we've got an amalgamation of 28 programs that we're implementing across the group. Very important to highlight that the programs mature at different stages depending on the market, the market structure, the profit of the business and the CapEx that's required. But of course, the biggest push is to get the key market, the Tier 1 markets to accelerate the index. So we're running what we OXyGEN Index, which is a measurement that is OpCo specific but then aggregates up into the group level. So we're able to look -- [ compare ] OpCo where they are in terms of maturity, which platform needs to be actually where we need to pull 1 lever to be able to move the OXyGEN level index up. Where do we need to actually forecast and concentrate our firepower in terms of investment to be able to [indiscernible] in the index. So it's a broad group program formulated at the center, but executed purely and owned by the markets. And we believe that with this program, we'll be able to support the organization in terms of Ambition 2025.

So doable, practical and, of course, also local and specific to the various markets that need to unpack them. Coming back to what net zero 2040, there's a question asked, is it realistic? And how do we actually plan to get there?

Look, we take the Ambition as seriously, like I mentioned, on the whole issue of ESG at the core. So that would be [indiscernible] 1 environmental in terms of Project Zero. We believe that is achievable. And we said that we have a net zero Ambition for 2040. And we say by 2030, we'll be able to reduce, I think, across scope 1 to a 3 by almost 47% on average. We believe that with the interventions we're making now, with the engagement with our partners, we'll be able to do that. A big example is what we're doing in terms of site rollout. We've got about 1,300 sites. They do run a rural sites. By the way, and all of those sites are powered through renewable energy. We are now moving that into macro site, into traditional macro sites, on our network to be able to bring renewable energy on there. There are also technical interventions we're going to put in terms of energy management. The ability to be able to pull the cell site to sleep depending on the traffic. So it definitely is a bold ambition, but we believe that the benefit and the requirement for sustainable Africa is a bigger comment for us to achieve Ambition 2025 because we're saying that we want to build a platform for Africa's progress, surely Africa's progress must be sustainable progress.

Yes. Makes sense. It needs to be sustainable, and let's go back to that theme around climate change. And maybe we can also hear your thoughts on this one, Nompilo, as to what the opportunities really are to capitalize in the market? Charles has run through some of the practicalities, but are there more opportunities and risks that we need to mitigate against?

Yes. Just to add on what Charles has just said. If you look at our climate change strategy, I mean, policymakers and politicians speak frequently on this topic that, if you look at Africa as a whole, people are very vulnerable to climate change, especially in the continent called Africa. So we're taking a very long-term view into climate change. We're going to look at all risks and also opportunities that this brings for us as an organization. Our strategy really is twofold like, Charles has mentioned, we're going to focus on driving greater efficiencies in our infrastructure; secondly, looking at renewable energy sources going forward. We look at risk and opportunities. Like I said, we report to the Board on both. We look at what we're doing and how we can do it in the longer term. But what's important is that, if people are interested in seeing our risk and opportunities plan, you can see our CDP report, which is published on our website every year. And those things, we make sure that they are really, really guided by global standards, and we align with [ CCFG ] guidelines overall, so that we make sure that we also report on financial-related risk that come with climate change. So it's something that we publish and we disclose on our website. Like I mentioned earlier, with the Investor Relations colleagues, we really, really are focusing on making sure that we elevate the disclosure of the things that we do because sometimes we have conversations and we realize that people don't have access to the information of what MTN does for climate change because we looked from a digital and only financial inclusion perspective. So disclosure is going to be continuously being one of the most important elements of what we do.

Easy to access and also easy to understand even for stakeholders. Makes sense. We do have a follow-up question that's been shared by one of our investors, John Kim of UBS. Quite loaded here, Charles, but does refer back to one of the figures that you had showed about the targets as well as the rollout and deployment of network infrastructure as well. The question asked, where is MTN Group at -- versus target levels for fiber network deployment? In future, what percentage of capacity or coverage would MTN look to consume internally versus monetized to the external operators?

Yes. John, thanks for the question. I mean I believe what John probably is asking is aligned with the FiberCo strategy in terms of what we're going to do around fiber. But I'll first start internally. We -- the whole issue of FiberCo, obviously, MTN will be the anchor tenant of the FiberCo business. If you look at our sites today, even on the network side alone, we believe that through fiber we'll be able to list -- connect 40% of our total critical sites in terms of our network. So MTN demand from a FiberCo perspective for fiber will also -- will be there. But there's a massive need for fiber infrastructure even outside that FiberCo business will be able to sell independent of MTN. So right now, I think if you compare to traditional power players in the market, I mean, I think we're behind, but I think we're going to scale this out. We are talking about delivering 135,000 kilometers of fiber, becoming Africa's #1 fiber player. We already started in Zambia. Because, again, if you look at Zambia, because it's got about 8 border countries, it represent an opportunity for us to set up as a hub, as a transit hub, for multiple -- whether it's the banks, for instance, the mines who wants connectivity or providing all of this. So there are many opportunities if we continue to look at the whole fiber infrastructure that want to build.

Makes a lot more sense and looking forward to seeing how those developers do certainly unfold. That was from John, and I certainly hopeful he's quite satisfied with that response. Before we wrap up this particular section, I think there's a lot of excitement around ESG, and we are quite well aware as to how serious it's being taken. Ralph mentioned earlier that it's got a 10% target. We heard some stakeholders asking how it's measured, and clearly have understood that in other years to come, fellow executives will come on board. But a trick question for you, Nompilo. How you making sure he meets this target at the end of next year?

Ralph does have a 10% target that's linked to ESG. It's something that we all participate in because his target is really talking to Project Zero. They're talking to how we engage with our stakeholders because it's 5% on reputation index that I spoke about. Then we -- and it's a big commitment because it's all the areas that are not within our control. Reputation index, the results of are not ours. It's how our stakeholders look at us. So for us, to be able to do these things, we need to be bold about them. And this is what we're doing to take those targets that are not even within our control, but because we trust the system in terms of the measures and the metrics that we put inside as an organization that will get us there. He's got another target that says he wants to improve ESG ratings going forward, on the top quartile ESG rates that we use to look at our improvement plan. That also is completely outside of his control. But because we've done so much work internally to make sure that we put these programs and KPIs in place, we're quite confident we should be able to get there.

Well, we're confident we'll monitor those numbers. But certainly, I understand that the necessary support has been put in place. Thank you kindly for your time today. We really gained a lot of insight and color in detail into the segments you look after.

Thank you.

Thank you so much as well.

Thanks again. That was Charles and Nompilo. And ladies and gentlemen, returning to deliver his closing remarks here on MTM Capital Markets Day and Ambition 2025, let's welcome back to give us his closing remarks, Group President and CEO, Ralph Mupita.

Gugu, thanks very much, and we really appreciate the time that you took to chaperone us through a very interesting program today, a program that we hope, audience, largely investors, but broader stakeholders, trust that you enjoyed it. So just a few closing comments from my side. Firstly, to thank you all for joining us on this first virtual Capital Markets Day. We're under COVID conditions, would have loved to see you face-to-face to be able to interact with you during the coffee breaks and at the water cooler. But these are COVID times, so we're having to use these great platforms to communicate to you. So thank you for spending the last kind of 6 hours with us. So hopefully, the technology held and you're able to walk through with us through the course of today. I just wanted to finish off with a couple of key comments. I mean firstly, to thank the teams that have done behind the scenes, the MTN team, our partners, Gugu as well, who've taken us through what is, for us, a very important day to talk to our investors, our shareholders and broader stakeholders. So thanks to everybody. And just a couple of comments from my side, just reflecting on the day. Firstly, I trust that you really got to get a sense that Ambition 2025 has actually got a plan that's very clear in terms of how we're going to execute from where we are today to get to 2025. And I think you would appreciate that, as the team presented, yes, we are ambitious and we are visionary, but we're also very grounded. Jens spoke about our chase framework that will drive the data opportunity. And in the language and the numbers that he spoke about, I think you saw that there's a very great deal of granularity there. Similar, in terms of the presentation by Serigne, the revenue mix is very clearly going to shift in fintech between now and 2025, and we're well positioning ourselves within these unicorns to resource and actually walk through that change. Charles, again, as an example, gave you the granularity of the OXyGEN program, which is actually providing a lot of guidance to the OpCos exactly about how we transition from a technology point of view. So there is vision and ambition, but also we had ground zero as a management team. The other point that I hope you took away is that, as excited as we are about executing Ambition 2025, capital allocation and the framework remains squarely in place. We're going to be very disciplined around capital. Tsholo took you through all of that detail. We really do believe that the ZAR 28 billion to ZAR 30 billion on current exchange rates is the CapEx envelope that we will have in the next coming years and will be able to deliver, including 5G rollout within that envelope. And we will continue to work on bringing price books down as we kind of develop on our technology road map, 3G, 4G, ultimately, 5G and smart CapEx and other methodologies will help us manage that CapEx envelope going forward. So the capital allocation discipline remain in place. The risk and regulatory framework, I think you take comfort, we're having people like Felleng and Ferdi responsible for those pillars. I assume you take a lot of comfort for having them around and guiding the team in particular around the risk and regulatory framework. These environments we operate in, they have risk and fully took us through all the kind of risk areas that we're working through, but we are putting the guardrails, the lines of defense that enable us to navigate. And as Felleng mentioned, there are very clear regulatory processes and how we manage these and these also feed into the risk profile, which we manage very actively. The other area that I hope you took away is that I'm certainly privileged to work with these people that we have a very experienced and diverse management team. We were operating today from a couple of locations under these COVID conditions, but I'm very well supported by an experienced executive team that, you saw some of them today, but there's more of them actually in the group that you didn't see today. And certainly in the markets, we have very strong CEOs actually executing on our strategy. And these are entrepreneurs, but also people on the ground who are building what we call MTN Group today. So I hope that you took those points through the course of today. And I hope you also found the disclosure, which is an ongoing project valuable, including the detail that was provided around ESG. Nompilo -- and both Nompilo and Charles took us through a granular level of detail around what it is that we are doing or attempting to do around the ESG. Any modern corporation today takes ESG very centrally. I think you'll see us moving step by step in our own progression as a modern company. So I really trust that you took that disclosures, which is an ongoing project, and you'll see us in providing more and more disclosure around these areas because they all feed in, ultimately, to the medium-term guidance framework that we've committed to you as our investors and shareholders. And then finally, I just wanted to, again, to take this opportunity to say that with Ambition 2025, we believe there's a very solid investment case here for investors, investors that are interested in the growth opportunity that the digital society and digital economy is underpinned by. We feel that Africa certainly is, for the next 10 years, part of that significant growth opportunity, both for connectivity, which today is 90% of our business as well as for the platform businesses that we believe will scale over time. We will have a focus on both opportunities. It's not as if we are going to pivot just to platforms, the connectivity allows us to be able to have the platforms that many of you are so excited about. We're excited about both the connectivity and the platforms. And I trust that this investment case positioning that we did today is clear. We'll continue to report to you. And in closing, I just wanted to leave you with a video that encapsulates why we think MTN is an awesome investment case, an investment case pivoted around growth. And with those comments, just thanking you again for spending the 6 hours with us today and trust that it was good. And please give us feedback through Thato and the IR team in terms of anything else that we may have not covered that you like us to cover in due course. Thanks very much, and please don't disappear, listen to the video and the 5 points around our investment case. [Presentation]