MTN Group Limited (MTN) Earnings Call Transcript & Summary

Good day to everyone, and welcome to this call to discuss MTN Group's Pre-close Investor Update. My name is Thato Motlanthe, Head of Group Investor Relations for the group. And on the call with me is Ralph Mupita, our CEO; as well as Tsholo Molefe, who is our group CFO. Thank you very much for taking the time to join us today. And I trust you've seen our pre-close update since, which was published on the JSE earlier this afternoon. We're introducing this call as part of the continuous enhancements that we have to -- in terms of our engagements with our capital markets and other stakeholders. So the plan is to schedule a call like this ahead of each of the interim and the full year closed periods as we move forward. You should have also seen in the sense that we announced the date for our planned Capital Markets Day. You remember, it was postponed from the 6th of December. So the new date for it is the 1st of June next year. We also set a save the date via e-mail that we blasted out just before this call. So you can calendarize that in the meantime. And the plan for that CMD is to just cover a little bit more comprehensively an update on Ambition 2025 and the progress we've made on that. With respect to this afternoon's call, the update we provided, and you've seen in the sense -- we aim to give you a sense of the year-to-date performance of the group up to the 30th of November 2022, with our financial performance numbers such as service revenue, et cetera, they are presented in constant currency, as we normally do. We also provide you some color on the trajectory since the 9-month report, which we published for Q3. Just to give you a sense of the momentum and some of the high-level metrics we shared in the sense. So as we launched in the release, the financial information contained is not -- has not been reviewed or reported on by the group's joint auditors, so just a disclaimer there. Please just note that the full year results as we currently have it schedules will be published on the 13th of March 2023 or thereabouts. That's for the 12 months ended 31st of December 2022. I will just hand over to Ralph and Tsholo shortly, who will provide an overview of the business and financial performance as well as give you some outlook remarks at the end. [Operator Instructions] Finally, just to note that we do have [indiscernible] call at the hour mark. And with that introduction in context, let me hand over to Ralph.

Thank you, Thato, and good afternoon, everybody, and thank you for joining us today. For today's call, we'll cover 6 topics or themes. Firstly, I'll speak about how we are navigating our operating context, and I'll just remind you of the measures we have in place to manage the challenges in our trading environment. Second is a high-level business update, which will cover some of the headline trends to give you a sense of how we performed post quarter 3 reporting at the group and in our 2 largest markets. Third, I'll provide a brief update on how we're progressing with some of our portfolio transformation initiatives. For the first update topic, I will hand over to Tsholo to provide some color on our streaming and balance sheet resilience. And after that, I'll come back with some comments on some of the regulatory and legal matters, you'll possibly read about over the past few weeks, and that will be topic number 5. After that, I'll speak on topic 6, which is some feedback on progress we are making in ESG and sustainability. And finally, I'll wrap up with some concluding remarks. So in terms of the first topic the operating context, we did provide some color and comments with Q3, but just to recap a few points. Trading conditions have remained challenging in Q4 so far. However, we are encouraged with the continued resilience of the business, and we've managed to sustain service revenue growth in line with our medium-term guidance. Overall, inflation in the markets remained elevated at this stage with the blended inflation rates in our markets picking up further to around 17.2% as of the end of November 2022. You will recall that we noted 15.4 blended inflation rate at the end of September 2022, which was already up from the 9.1% blended rate at the start of the year. To give a sense in our large markets, inflation was around 7.5% in South Africa, 21.1% in Nigeria. And you may have seen in the news that Ghana came in at 15.3% print as of the end of November 2022. Although communication spend is fairly resilient, we find across our markets, disposable income has come under pressure. We're also managing the impacts of higher energy costs across our markets as well as additional costs related to load shedding and vandalism of sites in South Africa. The regulatory environment remains complex, but we're managing it well, guided by our risk appetite framework. That provides you with some context of our operating environment, which should be familiar to you by now. I think it's important to just remind you of what we are doing as management in the business to navigate these inflationary and other macroeconomic challenges. We have spoken about an 8-point plan in our previous engagement group capital markets, which I'll briefly recap. In terms of commercial interventions, the first one is a focus on pricing to optimize effective rates for commitment for voice and infective rent per gigabyte for data across our top 5 markets, but also more broadly across the portfolio. There are 3 main levers we are pulling, first, the headline pricing adjustments, the second was driving our customer value management or CVM engine to enhance effective pricing and the third is optimizing our free traffic invoice and data bundles. We are seeing the results of these interventions including in the larger markets, and it has supported the performance of South Africa, Nigeria, Ghana, in particular, under the tough trading conditions. In South Africa, we're implementing device margin improvement initiatives and expect the benefits of these to deliver improved device margins for full year 2022 relative to the first half and this will flow into 2023. And that's the second point within our 8-point plan. In terms of supply chain, we have comprehensive risk management strategies in place that have been actually in place for quite some time, and we are managing the challenges in our supply chain quite well. We continue the engagements with major vendors on local currency pricing and improvements in price books. So Interventions 2 and 3 respective of our plan, Intel advanced purchase orders, sustaining rolling coverage for and critical parts and improving price books, as I mentioned earlier on. So this work is all progressing well. We remain engaged with telco partners in various markets to renegotiate some tower agreements. This is one of our key interveners to manage network risks and expenditure as we move forward. We will update you as and when appropriate regarding the outcomes of these, but we believe these will help cushion the business from inflation and foreign exchange volatility over the medium term. In terms of rising energy costs, we're actually navigating this reasonably well. And this has been helped by a relatively low contribution of energy cost to total cost. At a group level, energy costs contributed about 5% to 7% to total cost. South Africa and Nigeria are in that 5% to 7% range. Ghana is somewhere between 10 and 12. In Nigeria, I think we explained previously that we have also shielded there as most of the MTN Nigeria telco leases do not include a diesel pass-through. In South Africa, load shedding and load reduction has got worse. For context, we've experienced 47 load shedding days in just October and November compared to 53 days in all of Q3 and have experienced vandalism of sites related to battery theft. The power outages in Benin are affecting the operating performance of MTN South Africa. In terms of its network resilience plant, MTN is busy with Phase 3 of its full phase resilience plan. This will entail additional batteries, generators and enhanced securities at sites. The resilience initiatives through the key sites identified should be completed by the end of Q1 2023. It builds on the first 2 phases for battery rollouts, which were completed at the end of August 2022. So that covers point #5 and 6 of the 8-point plan. Point 7 and 8 speaks to building financial resilience, which Tsholo will talk a little bit more about. But just to call these out, our team interventions speak to an acceleration of expense efficiencies and working capital initiatives as well as liability management for further shoring up our balance sheet. This provides us the financial flexibility to execute on our strategy and also to absorb shocks that may arise in what is a fairly challenging macroeconomic environment. That is really to remind you as investors stakeholders that we are very actively as management and MTM working to ensure we deliver on our strategy and medium-term guidance. With that context, let me turn to the business performance and provide you with some high level and directional context of how the group has trended post Q3. You will have seen this in the sense we released earlier this afternoon. And this topic is #2 on today's agenda, and I'll cover Group, South Africa and Nigeria and fintech trends all in constant currency terms. Growth in group service revenue for the 11 months to November was approximately 14.8%, representing some acceleration relative to the 14.3% growth reported for the month -- 9 months to September 2022. There has been some pressure on overall group EBITDA margin, and directionally, this was slightly lower in the period to November 2022 when compared to the same level reported for September 2022. A lot of this was due to the pressure in MTN SA, which has been largely expected and flagged. MTN SA service revenue growth for the 11 months to November slowed slightly to 3.2% when compared to the 3.5% growth reported for September 2022. Overall, I'd say that this was a resilient performance given the challenging trading environment and load shedding. We continue to see pressure at the low end of the consumer prepaid market as consumers' disposable incomes are impacted by food and transport inflation. I mentioned the MTN assay EBITDA margin, excluding the gain on SA tower disposal was under some pressure for the year-to-date in November and was tracking just slightly below the medium-term guidance range, which we have set for ourselves of 39% to 42%. This was due to the top line and cost pressures arising from the challenging environment. The frequency and duration of power outages, which has been worse than expected as well as increased costs to restore and secure vandalized sites have impacted margins. For MTN Nigeria service revenue growth was up to 21.3% for the year to November 2022. Recall that the growth was around 20.7% when reported to September. So a pleasing acceleration in growth, in line with our expectation and medium-term targets of at least 20%. The performance was supported by solid growth across all key revenue drivers in the business and EBITDA margin was in line with the 53.6% reported with our Q3 results. For more PSP, we're progressing well with the work to strengthen IT and control systems in order to reopen the Nigeria Interbank Settlement System on NIBSS, we are taking a measured and systematic approach to this and reopening the NIBSS interface with the inbound service on track to reopen during this month of December 2022. This will support normal PSB's wallet funding to drive customer activity during the December holiday period. The outbound service, which supports the merchant strategy is scheduled to reopen in early 2023. Turning to fintech service revenue growth grew by 13.6% in the year to November period. There is a slight acceleration compared to the 12.9% reported at the end of Q3. The recovery in Ghana was sustained in the period [ reported ] -- recorded a positive year-on-year growth in the month of November. The overall trajectory in the fintech ecosystem remains robust with momentum in transaction volumes growth, slightly higher for the period to November compared to the 32.7% growth reported in Q3. This growth was supported by the continued build-out of the agent and merchant network where growth accelerated post Q3. Before I go over to the third topic, fintech separation and portfolio transformation, very briefly, we're broadly on track on the work to separate the fintech business. And we also launched the second phase of engagements with potential strategic investors into the group fintech business. We still anticipate that the outcome of this process should be completed in Q1 2023. In terms of our exit of Afghanistan, we had indicated that we had received a binding offer to acquire MTN Afghanistan for $35 million gross. We have made some progress towards concluding agreements and we also expect this process to be finalized in Q1 2023. Let me pause here and hand over to Tsholo to talk about the full topic, which is upstreaming and our balance sheet.

Thank you very much, Ralph. Good afternoon to everyone. As mentioned earlier, I will cover Topic #4, which is an update on our cash upstreaming from our various outposts as well as our strong financial position. So if I start with upstreaming, the group has upstreamed a total of 17.3 billion in dividends and management fees in the 11 months to 30th November. So that is an additional ZAR 5.8 billion since the quarter 3 update. We previously reported that we upstream to ZAR 1.5 billion from Nigeria in October 2022. And we can update you that we've managed to now repatriate a further ZAR 475 million during the month of November. The ZAR 475 million rent in November was upstreamed at a similar average rate as the October close, which we previously disclosed as just over NGN 910 -- NGN 560. To recap, we have now upstreamed a total of 17.3 billion from our total of course in the 11 months to November with a total of 6.5 billion upstreamed from Nigeria in the same period. This then leads me into taking in a bit more detail the financial resilience elements of our 8-point plan, which Ralph mentioned earlier. So if I start with the expense efficiency program, we are accelerating our initiatives in this regard. Just as a reminder, we reported ZAR 2.8 billion in efficiencies in the period to September 2022, and we will continue to drive our programs to mitigate inflationary pressures in our markets. We continue to optimize our working capital, and we are focused on ensuring that we concur our CapEx as efficiently as possible. On the latter, we do expect our CapEx deployment to close 2022, slightly above the ZAR 35 billion that we had provided in our previous guidance. This is due to foreign exchange movements and accelerated CapEx in South Africa to support their resilient network resilience initiatives. This is contributing to some pressure on the development of our free cash flow in the near term, which is also impacted by the payments for license and spectrum and acquisitions of about ZAR 8.1 billion that we had already reported on in the year. And as I indicated, we did flag this in the quarterly reporting. We are, however, pleased with the overall strength of our financial and liquidity position, both consolidated and all collaborate ratios at 30th November 2022 were largely flat on the September 2022 levels. Just as a reminder, these were around 0.4x as well and 0.8x, respectively. We reported previously on our liability management initiatives as well, which has enhanced our overall leverage at group as well as currency mix. We are continuously evaluating opportunities to further enhance our financial position, which we will update you on as appropriate. The liquidity position of the group remains very strong with the cash balances and committed controlled facilities at November, also tracking at similar levels to what we reported at quarter 3. We are confident that we have the flexibility in our balance sheet and liquidity position to pursue growth in line with our disciplined capital allocation framework and absorb any shocks that may arise. On that note, let me then hand over back to Ralph.

Thanks so much, Tsholo. I round up with the remaining topics of the call. The fifth topic is legal and regulatory matters. The first one, you will have seen some of the announcements and news flows around the Turkcell claim against MTN through their subsidiary, EAC. We published an announcement on this on the 1st of December, and we are pleased that the High Court of South Africa dismissed that claim with costs. The high court was clear that South African courts do not have jurisdiction over the case. And it brings to 5 the occasions that Turkcell has attempted to see pursue legal proceedings in respect of largely the same matter. All of these have thus far failed, including in reputable international arbitration panel. There have been subsequently -- they have subsequently indicated their intention to appeal. However, we are quite firm in our position that the claim is without merit, and MTN will continue to robustly defend its position and oppose any appeal that is launched. In the regulatory environment, the work on in similar registration is ongoing, and we are managing this through driving in growth additions and other commercial interventions. I did provide a sense of MTN's Nigeria's continued solid operating performance. In Ghana, we also due for a call on the same reregistration directive in that market on the 30th of December. By way of update, we indicated that 5.7 million subscribers would be [ barred ], which was completed. Since then, about 20% have been reactivated and MTN Ghana will continue to drive reactivations. We are comfortable with the level of recharges that we're seeing on a weekly basis in Ghana. Also in Ghana, you may have seen that the government of Ghana announced plans to reduce the e-levy from 1.5% to 1%. The amendment also proposed the removal of the 0 to 100 Ghanaian cedis per customer daily extension threshold for untaxed transactions. These changes are awaiting parliamentary approvals, and we'll update you on any further developments. Moving on to ESG sustainability our sixth topic. We are making really good progress here. and remain committed to our targets on NetZero emissions, diversity and inclusion as well as rural broadband coverage. We are recording steady continued improvement with ESG rating organizations. And I know many of you follow these quite closely. We are noting the improvement in critical areas of a business such as data privacy and security as well as corporate governance. Some of you may have seen last week that the ranking digital rights wildlife MTN as the most improved company from the emerging economies in this telco giant scorecard. We are pleased to have achieved this for the second year in a row. And it was attributable to improved disclosures and policy on digital human rights-related issues. Wrapping up now, let me conclude with some brief closing remarks. We are pleased with the continued resilience of the business, and we have provided you with a sense of how the overall performance has held up. We are tracking broadly in line with our medium-term targets, including mid-teens service revenue growth. There has been delivered through this continued execution of our strategy and focus on capital allocation. As Tsholo mentioned, we continue to invest in our network, anticipating closing this year, slightly above the previous guidance in terms of CapEx deployment. Our holdco leverage remains well within guidance and mix of debt and maturity profile all improving. I'd like to reiterate the assurance that the management team is committed to delivering on our Ambition 2025 strategy and medium-term guidance. We have previously commented on our dividend guidance for ordinary dividend payout of 3.30 per share for FY 2022, and we remain comfortable in that. And we are making solid progress in driving our already towards 25% target. In the near term, we are navigating the current macroeconomic volatility through the 8-point plan that I outlined earlier, and we're implementing this to sustain our growth and emerge even stronger. Finally, as Thato mentioned, we are scheduling a Capital Markets Day for the first of June 2023 next year. This will be 2.5 years since we launched Ambition 2025. So it's a bit of a halftime review on how we've progressed. And we hope that you'll be able to join us as we impact the progress we are making against our strategy within the current macro. Thanks very much for listening. I'll hand over to Thato to fill any Q&A we may have. Thato?

Thanks very much, Ralph and Tsholo. A question of charity on the line, and then we'll see what other questions come up. Just to clarify, the group service revenue growth of 14.8% is it in constant currency, and what is the reported currency service revenue growth?

Yes, it is in constant currency. In reported currency, it is lower than that.

Another questions come through. Today, there is news on Bloomberg that MTN is trying to dispose some of the smaller [ wake ] operations. What is the management's view on this? If true, which markets are MTN looking to exit?

I'll pick that one up, Thato. I mean we don't comment on market speculation as I think is policy for us. We obviously, as a company, when we have considered something as firm, and we have a firm intention, it will communicate. I mean there is nothing more actually to say on this matter.

Here a couple of questions reconnection. Could you please comment on negotiations with tower companies. I suppose some broad context of question.

Yes. I mean just on the tower companies, I mean, we basically have probably 4 tower companies that work within our portfolio more broadly. We have IHS, we have ATC, Helios will be the main ones to talk about across our footprint. We have a series of tower portfolios that are coming up for renew. And at the point of renewal, we will sit and talk to them about the pricing. We're looking for a lot more local currency pricing. We do accept that. There is a dollar cost. So we would expect to have 100% local currency pricing. We do seek now to have much more local currency pricing in that regard as the first point. I think the second point is we prefer space in power, contract to our telco as opposed to technology-based pricing. So that's something that we are looking at. And obviously, power becomes a really important point and where we have set down clauses, we look to invoke some of these set down clauses. I mean the overall sense that we want us to try and reduce foreign currency and inflation shocks that come through our network OpEx line. That's what we're actually looking at. And as we mentioned in the Q3 trading update, there are a couple of countries where we're looking at that. We mentioned Nigeria. We did mention Cameroon, Zambia, we want it the other examples where we have some portfolios of towers that are coming for renewal and those conversations are ongoing.

A couple of more questions. Outside of the SIM registration issues, is the operating environment getting better in Ghana? And as repatriation out of Nigeria been getting any easier?

Yes, , I mean, I'll sit a SIM registration, I think, as I mentioned, we're trying to also look at recharge levels. Ghana is a prepaid market, so the recharge levels, weekly recharge levels, give you kind of an early indication of the resilience of the business. I mean we don't think clearly there is no issue of concern there. I guess for us that the bigger issue is the broader macro inflation is very elevated, and it's positive development to see the IMF facility being provisionally agreed to board early next year. So that should help with balance of payments and ideally reduce inflation. We've seen in the city already started to receive from the high levels. It was touching almost going towards 15 and have come back in recent days. So outside of that, I think we continue to have the leading network. So that's where the traffic is coming to. There is a flight to quality effect we're certainly seeing in the markets and Ghana is benefiting from that. The other part of the question, I see this question are moving very quickly...

As repatriation Nigerian ...

Well, it's been as is, I mean, maybe -- so you want to talk about it, but I don't think it's gone better or worse.

Yes. I mean it's -- we can't say it's gotten better. I think it has been as it is. As we've indicated, we have been able to upstream 80% pretty much on the interim dividend. And as I indicated, we've upstream 475 million post October, and we have done 1.5 million during -- in October. And as I indicated, it's still at the same levels that we repatriated in the year when we reported. So I will say that it's been really at the same levels.

Should we take -- there's lots of question.

Yes. So we got a few more questions. Next one is, are the reconnections in Ghana happening faster than what you expected?

They all have to be faster. I mean, as we noted that there is a class of customers who are -- who we didn't disconnect because the difficulties of getting the Ghana accord, right? In the last couple of weeks, the reconnections that we've seen 20% of the original base that were disconnected, that's pretty fast, much faster than we've had in the Nigeria, if you use that as a comp. So it's an of expectations, for sure.

Next question, in South Africa, you provide more insights to revenue trends between postpaid, prepaid, enterprise and wholesale.

Let's start with prepaid. I mean, prepaid SIM is really under pressure. And I think it's a function of 2 things. One is the consumer battling both food and transport inflation. If you think about that lower end of the market, I think the voice prepaid has been actually a little bit better than we had in Q3, just a little bit better. We spoke to you that voice prepaid as there was negative double digits, negative single digits to the end of November. But there's pressure there for sure, that hasn't gone off. And so it's a combination of actually both the consumer under pressure but also the network availability. As we mentioned, actually, people talk about load shedding this load shedding and then there's municipal load reduction there's a bit of a double whammy in some parts. And then we got the vandalism. So a combination of pressure in the network availability when we look at 2G availability, 3G availability, that's more at the low end of the market. 4G availability looks a little bit much better for the network, but that's also impacting. So prepaid under pressure postpaid, relative resilience there. Again, it's probably more impacted by the network availability for power. Wholesale is enterprise is doing well. The trends in enterprise have remained pretty strong and so is our picking up. So I mean, the key area of concern is really around prepaid.

This one say, can you elaborate on the measures taken to contain as margin pressure? And when should we expect margins to return to the target range?

Yes. I mean, I think maybe just to add, I think we've been encouraged by the efforts by the business to contain the mic -- to protect the margins. So the expense efficiency program has been bearing foot across all the -- of course, but also in South Africa. So we've seen a good traction in terms of the expense efficiency program relative to our target for this year and when we are. So we're quite encouraged by the number of initiatives through our expense efficiency program in terms of network, IT, sales and distribution and other areas within the business from a finance perspective.

I just -- the other point I'd just make because, I mean, device margin is one area of margin management that we highlight that we're working on. And as I said earlier, we're seeing improvements there. I mean, to give you a sense of when we'll get there, I mean, there are quite a few factors. I think it will be irresponsible to investor management to say exactly when that would be. I think the one is, obviously, the top line is affected by network availability. We're pushing hard to get all batteries into all our sites end of Q1. And so I mean, we're well arranged and working arches in that regard. You want to deal with the battery deployment and dealing with battery theft, I think battery theft and the vandalism that goes with that actually is not actually now at a level that our on is probably a national crisis issue. So the network availability for 2G and 3G in particular, that will drive the top line, and that's a function of batteries and other sources of power that we will have. And as Tsholo's mentioned, I mean, we're driving expense efficiency initiatives, device margin, managing our costs very well. So what will be the biggest driver of that actually is the top line and both the state of the consumer at the bottom end as well as network availability. Our plan is to get all sites with backup by the end of Q1. But as all of us on this call know, I mean, the situation with Eskom is actually challenging and also unpredictable. So I mean, we will push hard to keep the business in that and corridor, but there are some externalities that we -- be on us in terms of managing.

The next one, any update on the localization in Ghana.

No, there's no further update. I mean I think right now, it will be actually also quite challenging to even localization and also putting pressure on repatriation. So I mean, I don't think you should anticipate seeing any progress on localization in Ghana in the near term.

A follow-up question in terms of the macro. It sounds like the operating environment is still challenged, and it seems to be getting better. Is that a fair statement?

How much of it's getting better, I think we are just but more resilient as a business. I mean if you cover the key markets, South Africa, it's load shedding, load reduction, vandalism and the state of the consumer, I think quarter 3 to quarter 4 in South Africa, I would you say that, that actually has gotten a bit worse. If you look at Nigeria, I think Nigeria operation is improving. I mean I think in our Nigerian business, we have accepted this with H1 results is that we felt that the Nigerian business could pick up and actually voice is picking up and growing very strongly in the last couple of months, seeing good voice growth still coming out. So Nigeria operationally actually is much improved. Ghana, I mean I think there's a flat quality dynamic that's helping us deliver solid growth there across all peers. And so if you just purely look at the numbers, you would say, Ghana is getting better. But obviously, there's a macro which is challenging. So I wouldn't say it's necessarily getting better. It's different for each of our key markets. But I would argue that we've been, as I mentioned, our focus area has really been around issues around pricing and trying to get better yield on pricing. And these things will play out in the next couple of quarters. And in all the discussions with vendors as well as telco companies so that we can actually absorb that. So no, it's more the execution that's helping us. The macro is not getting any better.

Maybe just a follow-up question on pricing as you mentioned. Can you please comment on whether you look to put through further price increases as into next year? Of course, given the various inflationary challenges we're facing on cost and CapEx?

Kind of we have to -- I mean you saw our numbers on blended inflation. We look at inflation numbers across all markets. And we -- our story is based on us to be able to grow above related inflation. And because inflation got elevated so quickly, we have to play catch-up. So the discussions we're having, and you know well our position in Nigeria, we still are engaged with authorities there, a 10% price increase. And -- so that's coming through. And in South Africa, we will be looking at a price increase headline price increase in the new year as well. So I mean, you can't avoid that discussion, particularly given the CapEx that has to go in the ground. So we'll continue to report on where we've made progress across our markets. So we anticipate price increases for next year for sure. Not easy to pass through, but we have to have the discussions with the authorities if we want to sustain the quality of networks and these networks have become -- people have appreciated the mass critical national infrastructure and they need a minimum level of investment in that level of investment comes from cash flow and cash flow, we need to put the inflation adjustments across markets in 2023, for sure.

More question on Ghana. In the update call, management indicated that 3 million customers were likely to be lost in the exercise, do you still stick to the same figure, any changes and impact to service revenue and EBITDA?

We are not seeing any changes to guidance more broadly to -- in Ghana. I mean the thing we've learned with the steam registration is that these things are not linear. And I would our caution against modeling on the numbers here in terms of anticipated impact growth connection activity, as an example, and managing our churn lower can actually just improve the recharges that you're getting coming through. So on guidance for Ghana, I mean, there's no change to guidance as we speak right now.

Can you give us some more color of the progression of mobile MoMo revenues in Nigeria?

Yes. I mean it's -- as we mentioned in the Q3 update, I mean we've taken a deliberate decision to kind of slow down the rollout of MoMo. So you'll see that absolute volatility. We didn't comment on the volatility in Nigeria, they're probably pretty stable. I'm comfortable with the work that team have done there. As we noted in the pre-closing statement. We're opening up the NIBSS inbound demand. People can fund their wallets. And I think at this particular point in time, with the changes that are coming with notes in circulation between now and the end of January, there's a nice use case for us there to collect up some of the old currencies that will not be legal tender next year. So we're pushing ahead with inbound. And just as we're now getting into things quite actually next week when we launched that. And then very early on, probably at the end -- early on in next year, probably at the end of Jan, we will also be doing the outbound, and they will really pick up there. So I think you should see wallet development push very strongly in the first half of next year. And that's where -- last time, we did say that there may be a margin impact as we push more aggressively. So that aggression you should see in the first half of next year, and it could have a slight margin impact on Nigeria margins.

Next question, you commented on but maybe you can just give some high-level thoughts on it. Do you have a specific valuation or multiple in mind, which you would not disclose a intake? Not asking them to disclose it, but broadly, is it possible that there's a big difference between the bid and the [indiscernible].

Yes, it's a great question, Thato. And we're very mindful that we have a very valuable assets here the subbase has grown in the period as well. We haven't given the certain numbers for this closing call. We've seen good growth on the base. So we have a clear internal view of what would be fair value that our shareholders would see also its fair value. I think there are enough data points out there, that says what would be seen as fair value. And if we can't get that at the end of the process, which we're in now, I mean, we would simply not precede another opportunity, another window will come beyond, but we're very mindful that investors are looking at fintech valuations and where they've drifted off. Now if you're looking at those as multiple reference point, I mean, we wouldn't be continuing any discussions with any of the parties. So let us see where we end up with them in the next couple of weeks, maybe last 2 months when our process should be completed. And we will then communicate the outcome. But we have an internal view of fair value. And if we can't conclude that way, I mean, Tsholo always like some money to come in and get you. But there's not a distressed asset at all. And so we certainly are not going to be anywhere near what we see as current fintech valuations out there. And actually, our business is quite a well-developed business and it funds its own growth. And this was driven more by partnership acceleration and desire to also partner us at kind of the holdco level. So hopefully, in all of that, [ Caesar ] I kind of answered your question. I mean there's no higher sale here. And yes, there is a real possible outcome where we don't proceed and do anything because we're not desperate.

Can you talk about where you will allocate capital for growth at scale going forward? How much capital would you potentially deploy over the next 3 years?

So to speak to our capital allocation framework, and I'll probably add in on 2 points.

Yes. So I mean, I think our capital allocation framework has not changed. So we will continue to invest in faster-growing areas organically, the connectivity operations in terms of our 4G, 3G, 4G and also accelerating 5G into the future, but also actually accelerate our platform businesses, it will be important for us that we continue to invest in that area. As we've indicated, our CapEx intensity overall, will still stay within the 18% to 15% mark. And with the platform business is, of course, being very capital light we don't see a situation where we spend more than 5% from CapEx-intensity perspective.

Yes. I mean the 1 thing I'd add is that, I mean offering we still think it's valid for where we are in kind of our strategy. So deleveraging the balance sheet is taking up the #2 spot. There'll be a point where we get to a comfort where that can't be a #2 point, and we have to consider the capital allocation framework and shareholder remuneration comes a little bit higher et cetera, et cetera. How do we think about M&A and where in the M&A frame, we will be much clearer. We're more focused on obviously, there are elements of M&A that are strategic, and we would want to be clear with our investors. I think next year, when we think about -- to your question over the next few years, I think we broadly want to spend CapEx along the levels that sort of spoke about where we are ending of this year. So I think that's kind of what goes into the network in IT. And obviously, for South Africa, we're going to continue with a focus on ensuring network resilience, and we work with that [indiscernible]. So hopefully, that gives you a sense of the kind of capital allocation. That in what remains the same for now. But the faster we make progress on hard currency it, the quicker we will rethink that framework and think about different form on the shareholder and valuation side.

Just dovetailing on your comments on SA, how are you thinking of energy costs in South Africa casing in the context of growth? It will be higher than the current 5% to 7%, will MTN mitigate this by bringing this cost down and when?

I mean what [ CHASE] is buying, and I think you said at the Q2 trading open aware of sowing tower as a service from IHS and ATC portfolio of towers that's ATC. So we have power in service agreements. And within that, we can sign up to high levels of availability, [ Platinum ] being the very highest. And when you pay it, then you pay more in your OpEx. So I mean, we're moving from being kind of a non-telco company in South Africa towards being a telco company within the context of 2023 when I IHS got its hands fully on the asset network. So I think you've got to think about it, what's coming through, what level of power does MTN request IHS and ATC to deliver. And there will be parts of these will pass through, but they're not that significant within the asset context. The main thing is we're buying availability.

So the next question. What is MTN's progress on dealing with regulators in regards to price increases. You did touch on this earlier. Also is MTN aware of any new taxes or levies that might come with the macro environment in countries?

In terms of price increases, we did a price increase in the first book in May. As I mentioned, price increases will come through in the new year, I get within South Africa, Nigeria, we've spoken about the 10% that -- we've spoken to the Minister that was reversed. We went back and said, we still need that. So let's see where we get there before the elections or after the elections. So we're standing pretty firm on that. And then more broadly across the markets we're looking at. But as I mentioned before, I think the way to think about price is kind of the price, the effective yield were generated. So the one form is headline price increases. The other is the CVM. This contextualized pricing. We've just launched in South Africa made for you or for our new CVM engine, which we called MVX. So that should also help in South Africa. And then also just removing the amount of data or discrete traffic for more voice and data. The market becoming a bit more benign kind of market repair in the past with competitors, and I guess in some instances, we were also involved, obviously, giving very rich offers like everybody is pulling back. We now have a clear view of what should be kind of a sustainable amount of free data to for promotional activities. So that's all going to also help with pricing going forward.

A couple of questions on M&A for the transformation, is MTN Iran cell on the chopping block is part of the Middle East portfolio first question. Second one, any update on a potential deal with telecom. Third one, will MTN be bidding for the license [indiscernible] order?

James always ask difficult questions. Yes, I mean, we said in the Middle East that we focused on exiting the previously consolidated. So Syria is MTN making progress with Afghanistan, we hope Q1 or conditions are met, and then we'll have really simplified our portfolio. Iran, we said that we will look over time around that business we've said it's manageable value. What I do think is important for investors to know is that Iran sells part of its license condition has a listing obligation in the course of next year. So we're evaluating what form of listing will work with our partners there. And I guess we will take it on from there because I think, will also be an important point of our strategic consideration going forward in terms of our 49% shareholding there. There's no updates on telecom, there's no conversations. And to be clear, I mean, we won't be bedding for license. Hands are very full at the moment, as you can -- as you guys well now.

Okay. Next question. What is the balance outstanding from Nigeria from the Nigerian subsidiary that ends November '22?

Nigerian subsidiary?

In terms of upstream?

Oh, okay. Yes. So I mean it's probably about 20% of the interim dividend outstanding, yes.

As well as there's some from there's a portion of...

So yes, that's probably about 25% of even it could be less.

That's actually random number.

Yes. So I mean, I think on the Nigeria upstream in the dividend, it's about $13 million outstanding the amount.

On the dividends and the...

On the dividend, yes.

Quarter 2 -- half of the quarter is done now.

Yes, most of it is done.

Please provide insight into the degree to which network availability in SA could improve post implementation of Phase III of the network resilience player, assuming current levels of road sharing persist? Could you give a rough sense of the percentage of sales and have no backup power versus 4 or 8 hours of energy backup.

We are going to put that thing into a model. We don't disclose. No, we don't disclose. I mean I think the way to think about it is that the current level of outages actually is actually very extreme and very difficult for batteries to have a full recharge cycle even your guests in batteries are that will be stage 6 to 8. Anything after just after 6, I think, is really manageable. So in Phase 3, I think there's a bunch of -- disclose how many more sites. But I mean, we'll close all the decisions in the next 3 months. I think the significant majority of our sites had on batteries. So poses I can't mention the absolute numbers. So I think significant comfort that network is -- I think that the real issue is -- the real unspoken issue in South Africa is the actually the level of vandalism that is going on, when people will try to steal batteries. And this is not just our network and I think in one network that they do look to end up actually vandalizing the whole sites. So you can't even -- aren't even on and may need replacements. But yes, I mean, the current level of nurturing is not ideal for meeting our medium-term guidance in South Africa if we sustained it this year.

Given inflation pressures, they remain elevated for a while, which one of your medium-term targets, medium-term guidance items are you perhaps the most worried about?

Yes, look, I mean the top line is a function of pricing and our own ability to effectively improve yields, whether it's removing excess offers and personalized pricing. So I think that's top line and also you need regulatory approval. So I'd argue to that one is the one that I'll probably be most worried about. But that interacts with the other and APIs as well. I don't know, Tsholo, if you want to add to that?

Yes. I mean I would have, I think, obviously, because the obviously, engagement with regulators in terms of pricing in some instances, even though we do look at other initiatives from a CVM perspective. I think on the margin side, it's probably where we could try as much as possible to protect the margins through continued efforts of the cost savings. Yes, so I would argue that is probably more the top line because the EBITDA margins we could always be a lot more aggressive as much as we can on cost savings.

And Tsholo, before just wrapping up the call, what naira-dollar rates are you getting for CapEx and your repatriation? I think you disclosed the repatriation.

I mean, the repatriation we said is 560. And I mean the CapEx is primarily at the official rate, which is really roughly around 450, they will get about on leverage.

Then the last question for the call, what portion of Ghana's P2P transaction revenue is derived from the 0 to 100 Ghanaian cedi?

I can't number that number. Do you remember, Tsholo?

No. But I think it's probably about 50% of the volume.

One of the volume, we'll get the revenue, but it was zero rated for a long time, going through COVID. Okay. That is the last question on the call. Ralph, I don't know if you've got any parting shots, some Merry Christmas wishes to parting shots.

You're very kind of aggressive. Now suffice to say, thanks to our all our shareholders and investors supporting us. It's been a challenging year. I think we've put in a solid performance under the current macro. And we will come back in the new year teams overtaking breaks. I'm encouraging them to take decent breaks, so they come back in the new year. And yes, we've got a good plan we set up for next year. Again, very focused on execution. And hopefully, the elevated inflation will start tapering down because I think that's a big challenge we face in terms of executing, building networks and so forth. I think we've got that down, but the macro you can't control them, but we all now our best and yes, and we wish you all some time to relax with family and loved ones and see you in the new year.