swazilandMTN

All data are collected in the Fiscal Year of 2008-2009.

Company Profile and History

Launched in 1994, the MTN Group Limited (MTN Group) is a multinational telecommunications group, with its core operations in 21 countries in Africa and the Middle East. As at the end of December 2008 MTN recorded more than 90 700 000 subscribers.

MTN Swaziland LTD is a subsidiary of the MTN Group and started operating in September 1998. In 1999, MTN launched an E4 million voicemail system, which met the 12 month coverage obligation nine months ahead of schedule. By February 2002, the company increased coverage to 75% and launched SMS services in the same year, earning the company E71 million in revenue.

The licence authorises Swazi MTN Limited to provide and operate a 900MHz GSM network within the geographic area of Swaziland.

The cellular network covers over 70% of the geographical area, including all major business centres, as well as continuous coverage from the Ngwenya border, along the Mbabane-Manzini highway and on to the Mozambique border.

In Country Location

MTN Office Park, Karl Grant Street, Mbabane, Swaziland;
Telephone: +268 406 0000
Telefax: +268 404 6215

Services and Products

The MTN Group is a leading provider of telecommunications services, offering cellular network access and business solutions. In Swaziland MTN provides amongst others voicemail, FaxMail, SMS information service, Virtual Recharge and Call Back services. In 2006, MTN launched 'Access 90', a product that gave subscribers up to 90 days' free access.

Number of Employees

26 000 people; MTN Swaziland: 108 people

Financial Information

Revenue: R102.5 billion up 40% from December 2007; Swaziland-revenue contribution to Group (Rm): 519 000

90.7 million subscribers; Subscriber contribution-Swaziland: 2%

Market Share

MTN Swaziland is the only mobile telecommunications company in the country.

Business Objective

"To be the leading provider of telecommunications in emerging markets"

Business Model

MTN's strategy is built on three pillars-consolidation and diversification; leveraging its footprint and intellectual capacity; and convergence and operational evolution. MTN estimate that the addressable mobile telephony market in its present footprint will grow to over 381 million in the next five years from 220 million now. MTN remains highly competitive in all its markets, putting it in good stead to take advantage of significant future growth opportunities.

Consolidation and diversification:

In the last financial year, MTN continued to evaluate various opportunities to continue to grow its business and diversify earnings through leveraging its scale and offerings. Its comparatively low level of gearing enables it to consider potential acquisitions with confidence regarding its ability to finance such acquisition.

Leveraging its footprint and intellectual capacity:

MTN has built a strong global brand and is recognised for its leadership in mobile telephony in emerging markets. Its brand is a key differentiator, and its strategy is to leverage it to achieve even greater growth and efficiencies.

Convergence and operational evolution:

There is a growing acceptance of the inevitable importance of data within the industry, with significant implications for infrastructure. MTN accelerated its preparations for an era, in which mobile operators will become meaningful providers of internet-based connectivity. It has started work on the transition of the network infrastructure across all 21 markets to the next-generation, packet-switch network, based on Internet Protocol (IP). The installation of new-generation radio equipment makes use of network technologies such as EDGE and 3G, allowing for increased data access and improved voice quality.

MTN Swaziland’s strategic priorities include the following: completing the final elements to integrate acquisitions that complement its expansion strategy; optimising regional synergies and ensuring strategic regional focus through a hub and cluster structure; continuing to pursue appropriate expansion opportunities to further diversify earnings and consolidate its position; improving operational efficiency through its least-cost operator strategy and exploring outsourcing to improve the business model; and taking advantage of money transfer and mobile money opportunities in MTN Group Markets.

Ownership of Business

The Group had the following effective percentage interests in the Swazi MTN joint venture: 30%

Benefits Offered and Relations with Government

MTN partnered with the Swaziland Post and Telecommunications Corporation (SPTC) in July 2008, and two months later, during the Swazi Independence Day celebrations, King Mswati III made the first cellular call in the country. The SPTC is the Regulator of the Telecommunications Industry in Swaziland.

Fixed telecommunications services in Swaziland are still in the hands of the national monopoly, the SPTC, established in 1983 under the Posts and Telecommunications Act and responsible to the Ministry of Tourism, Environment and Telecommunications. The cellular network is also under the monopoly control of Swazi MTN.

According to the authorities, "service needs in Swaziland are to be met by means of a 20-year development master plan that will ensure an orderly telecommunications network expansion." The Government has formulated a new Telecommunications Policy aimed at liberalizing the sector through a yet to be passed Telecommunications Act. This will eliminate the SPTC and separate posts and telecommunications into two separate corporations. The telecommunications business will be incorporated as a telecommunications company under the Companies Act. A new regulatory body, the Swaziland Communications Commission (SCC), will be set up. A period of exclusivity for the new Telco will be determined at the date of commencement of the Act and competition will be opened for private networks, internet services, value added services and customer premises equipment within 90 days after the effective date of SCC's operating authority.

The Group pays annual spectrum fees of E20,000 per channel used (with a minimum of EUR600,000) and a licence fee of 5% of audited net operational income as defined in the licence.

Government also set up a committee called the Universal Service Obligations Committee (USO).Through this committee Government wanted to ensure that MTN provided services to customers who may not otherwise be served. By working hand in hand with this committee MTN Swaziland has set up a host of Base Transceiver Stations (BTS) to ensure that even Swazis living in remote areas also have access to mobile communications.

The USO conditions in the Swazi MTN license agreement ensured that MTN Swaziland did not concentrate its efforts only in areas with high returns, but also provided services in areas with low financial gains so that the economic activity in these remote areas could be improved.

In addition to BTSes, MTN also installed payphones in strategic areas where people who cannot afford mobile phones would be able to make calls using a coin box. Local entrepreneurs have been empowered by the company too, by distributing MTN products and services-specifically airtime, SIM cards and handsets. This has resulted in the creation of employment for a large number of Swazis who sell airtime at every corner of and earn commissions.

Product Development

MTN Swaziland’s licence was renewed for a further period of 10 years effective November 2008 to November 2018. On 30 June 2008, MTN Swaziland recorded an impressive 518,988,000 strong subscriber base, which is approximately half of the Swazi population.

MTN Swaziland introduced its lowest-priced handset to date in 2008, supporting greater usage. The launch of MTN Zone, piloted first in Swaziland, proved very successful and resulted in significant uptake.