Post on 14-Jun-2021
MTN IrancellIran Investor Site Visit:Presented 5 May 2008
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MTN global footprint
South and East Africa RegionDec 07 Mar 08
South Africa 14,781 15,169Uganda 2,363 2,464Botswana 874 880Rwanda 652 754Swaziland 380 398Zambia 262 352
Now operating in 21 countries serving a combined population of over 500 million people.
West and Central Africa RegionDec 07 Mar 08
Nigeria 16,511 17,766Ghana 4,016 4,398Côte d’Ivoire 2,679 2,896Cameroon 2,559 2,855Conakry 727 870Benin 652 679Congo - Brazzaville 316 404Liberia 304 351Guinea Bissau 235 286
Middle East and North Africa RegionDec 07 Mar 08
Iran 6,006 9,025Syria 3,109 3,158Sudan 2,090 2,361Yemen 1,507 1,565Afghanistan 1,200 1,462Cyprus 113 120
Total (’000) MTN subscribers 68,213
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DIVIDER: Country Overview
Country andtelecommunications overview
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Iran – dynamics
Area 1,648,00 km2
Capital Tehran
No. of provinces 30
Languages Persian (Farsi), Turkish, Kurdish
Literacy rate 80%
Population 68.8 million (2004 UN estimate)70.5 million (2006 Economist estimate)Ranks 17th globallyMajor cities:Tehran 12.2mMashaad 2.4mIsfahan 1.6mTabriz 1.4m
Age distribution<35 years
70%
GDP: Per capita* $4,252
GDP: Growth* 4.3% (2007 est.)
Inflation rate 14% (2007 est.)
Currency (IRR) US$ = IRR 9,060 (average 2007)
Market sizing 52 million (2012)
Penetration 37% (Dec 2007)
Source: Pyramid Research * Source: CIA Factbook
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Source: Pyramid Research
Rank CountryService Revenue
(US$bn)Share of Regional
Market1 South Africa 12.7 15.5%2 Turkey 12.7 15.4%3 Saudi Arbia 11.6 14.1%4 Nigeria 7.5 9.5%5 Iran 4.1 4.8%6 UAE 3.9 4.8%7 Egypt 3.7 4.5%8 Morocco 3.7 4.5%
Total 59.9 73.1%
Region's MAJOR MARKETS 2006
Rank CountryService Revenue
(US$bn)1 Iran 19%2 Egypt 14.5%3 UAE 9.4%4 Morocoo 8.6%5 Nigeria 8.4%6 Turkey 7.5%7 Saudi Arabia 5.7%8 South Africa 1.6%
Total 74.7%
Region's MAJOR MARKETS 2007-2012
Iranian mobile penetration – Regional context
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Iran telecommunication – market overview
Sources: TCI, June 2007
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006
Mill
ions
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Growth in fixed lines in Iran, 2000-2006
Number of mainlines
Teledensity
Sources: Pyramid Research
0
2
4
6
8
10
12
14
16
2000 2001 2002 2003 2004 2005 2006
Mill
ions
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Growth in mobile subscribers, 2000-2006
Total mobile subscribers
Penetration
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Iran overview – market players (20 April 08)
69%1%30%Market share*
State-ownedRafsanjanIndustrial Complex
MTN 49%IEDC 51%Shareholding
1993200421 Oct 2006Launch date
1,016 cities15 cities365 citiesCoverage*
Nokia-Siemens NetworksT-systems
HuaweiEricsson
Nokia-Siemens Networks
Nokia-Siemens NetworksEricssonHuawei
Suppliers
22.5m active450,00 active9,0m active*Subscribers
MTN Irancell Taliya (BOT) MCI
* Mar 08
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Incumbent holding structure
• Prior to the entry of MTN Irancell, TCI / MCI had a effective monopoly
• Market characterised by:– High connection fees through periodic
auctions (US$350)– Long waiting lists / pent up demand– Congested network, poor quality– Lack of customer service– Limited marketing/ promotions– No interconnect– Only postpaid– Low tariffs (US$0.05 /minute)– Extensive network coverage
• Currently 1 fixed line operator and 2 national GSM licenced mobile operators in Iran
• Prepaid launched MCI• Market distribution dynamics are changing
Source: TCI, JUNE 2007
• Privatisation anticipate
TCI
• BOT providingpre-paid services
• Subs limited to 6m
Taliya
• Provider of fixed lineservices on behalfof TCI
• Rely on TCI licences
TCPs
• Provider of pre-paidand post-paid services
• Procures long linksfrom TCI and utilisesinternational gateways
MCI
• Infrastructure company• Long distance
transmission links andinternational gateways
TIC
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Irancell
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Licence conditions
Period
• Granted Nov 2005
• Effective July 2006
• 15 years
• Renewable 2 periods of 5 years
• Protection period: not to issue any new license for 2 years from the effective date
Fees
• Initial fee €300m
• Each contractual year 28.1% of revenue (min of 80% of B.P revenue)
• Universal service fee – 3% of revenue
• Regulation fee – 0.25% revenue
• Numbering fees
Spectrum• 900 MHz
• 1800 MHz
Coverage• Year 1 – 50% of population Year 2 – 56% of population Year 15 – 85% of population
– 248 towns – all provincial cities– 1,589km of road – 4,430km of road
Tariffs • Maximum premium of 20% on TCI (MCI) tariffs
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Key business objectives and strategies
Drive mobile penetration
and market share
• Innovative product and services– Segmented pre- and postpaid packages– GPRS and MMS (first in market)– International SMS/ roaming
• Branding and promotions
Customer service
• Rapid online registration and activation within 15 minutes• Dedicated customer care centre (24 hours)
Distribution network
• Multi-tiered distributions strategy– MTN Irancell owned channels (service centres/B2B centres)– Independent channels (franchises, wholesalers, retailers, service sector)
World class network
• State of the art network that would support 3G services, with split between MSC servers andmedia gateways
• Over next 5 years, a network that covers more than 1,000 cities and comprise almost 6,000 BTSs
Operational efficiencies
• Aim to achieve EBITDA margin post Revenue share mid to high 20s in low tariff environment– Low dealer commissions and discounts (6% average)– Good power supply and site rental arrangements– Lower subscriber acquisition cost due to pent-up demand
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Board of Directors
Managing Director
Operational structure
NetworkGroup
Human Resources Procurement
Chief Financial Officer
InternalAudit
CorporateServices
Legal andRegulatory Marketing
ChiefOperating
Officer
ChiefTechnology
and Information
Officer
Salesand
Distribution
Capital Program Group
Customer Relations
(CR)
IS
• Composed of 7 directors• 4 members elected by Ordinary
General Meeting –at least 50% elected by IEDC
• 3 members elected by MTN
Key positions:
IEDC: Chairman and MD
MTN: Chief operating officer and chief financial officer
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Highlights
0
2
4
6
8
10
12
14
Cameroon GuineaBissau
Iran (Mar08)
Nigeria SouthAfrica
Sudan Syria Uganda Yemen
Mill
ions
No. of subscribers 26 months from launch
Budget 08
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Subscriber growth trends
Subscriber growth net additions per month
1,194,0641,233,585
591,555
787,788699,945
798,111
580,361592,408564,128
381,705294,451
39,398
357,802459,310
237,517
98,752105,654
Nov06
Dec06
Jan07
Feb07
Mar07
Apr07
May07
Jun07
Jul07
Aug07
Sep07
Oct07
Nov07
Dec07
Jan08
Feb08
Mar08
Nov 06:Started with
golden numberpromotion on
postpaidMar 07:Nourooz
May 07:Engaged with regulator
regarding persecond billing
vs. per minute billing
Jul 07:New products
launched
Oct 07:Town “storms” and
Buy-One-Get-One-Free(BOGOF) promotions
Mar 08:BOGOF,
improved coverageand Nourooz
End Jan 07:Launchedprepaid
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Date Event/milestones
21 Nov 2005 Payment of up-front license fee (Euro 300 million)
27 Nov 2005 Mobile license issued to MTN Irancell
6 Dec 2005 Release of tenders for equipment
3 Feb 2006 Award of NSS contract to Nokia
26 Feb 2006 Foreign Investment License for MTN was issued by FIPPA
18 Mar 2006 Award of BSS contract to GC/OEM
10 Jul 2006 Effective Date
28 Aug 2006 Test Launch
21 Oct 2006 Commercial Launch (postpaid only)
30 Jan 2007 Launch of prepaid
25 Mar 2007 Achieved 1 million total subscribers
6 Nov 2007 Achieved 5 million active subscribers
31 March 2008 Achieved 9 million active subscribers
MTN Irancell main events
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Network coverage map
2,291BTS sites
365 cities
30 provincial capitals
3,356 km road coverage
53% of population
5% geographical
18 Mar 2008
Iran current coverage
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• 6 Dec 2005: Release of tender
• 3 Feb 2006: Award of NSS
• 18 Mar 2006: Award of BSS
• NSS: Nokia
• BSS:Nokia Regions 1 & 3Huawei/ICI Regions 2 & 3Ericsson/Sataf Region 5Ericsson Region 6
115 days
Vendor allocation
59 days
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TW
Mashhad
Isfahan
Shiraz
Hamedan
Babol
TE
Existing SwitchesPlanned Switches
Site location
1. Tehran West
2. Tehran East
3. Mashhad
4. Tabriz
5. Isfahan
6. Shiraz
7. Hamedan
8. Babol
9. Ahvaz
10. Karaj
Note: Land properties for the 2 new sites have been purchased.
Switch centres
• Five switch centres were launched in the H2: 2006 (Autumn and Winter).Three sites were launched in the first H1: 2007 (a record within MTN Group).
• Completion at an average rate of 180 days from the date of construction commencement to site launch.
• Expansion cost per sq. meter of technical space is much lower than the original MTN switch models.
Karaj
Ahwaz
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Commercial Launch21 Oct 2006
Post paid SIM
SMS
Call Forwarding
Conference Calling
CLIP
Call Barring
Customer Service
Itemized Billing)
Distributors Portal
Nov 06
Prepaid Sim
Golden Numbers 0935
Online Registration
Recharge Services
E-Care
Balance Enquiry Services
GPRS
MMS
IVR USSD و
Please Call …
Golden Numbers 0936
Data Sim
Family and Friends
Who called
Voicemail
E-Charge
Vitrin Services
Booster plan- Red/ Gold/ Blue
Stop the Clock
Note: Services in BLUE are offered exclusively by MTN Irancell.
Products and services
Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07
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Distribution
20,0006,500
13
5
Service centres Distributors Dealers Store outlets
Distribution channels
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Funding
Current: (December 2007)
Share Capital 167
Shareholder’s Loans 660
Vendor Financing 325
Total 1,152
• 49% Share Capital of Euro 150m already paid in via cash injections into MTN Irancell by MTNI
– Provision of loan to IEDC via MTN Irancell from MTNI for 51% of Share Capital
• Current Shareholder’s Loan comprise of the following:
– Licence Fee (Euro 300m)– Bridge facilities (US$250 million)– Capitalised interest
• Further bridge facility of US$250 million is to be drawn down in 2008
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Looking forward
US embargoMTN competitive and agile
ChallengesOpportunities
Entrenched competitorYouthful population
Demand for new innovations Underdeveloped legal / judicial environment
Large addressable market Reliance on third party transmission
Significant MTN experience Unpredictable and high profile political environment
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DIVIDER
Thank youQuestions?
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Notice
The information contained in this document has not been verified independently. No representation or warranty express or implied is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Opinions and forward looking statements expressed represent those of the Company at the time. Undue reliance should not be placed on such statements and opinions because by nature, they are subjective to known and unknown risk and uncertainties and can be affected by other factors that could cause actual results and Company plans and objectives to differ materially from those expressed or implied in the forward looking statements.
Neither the Company nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (based on negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation and do not undertake to publicly update or revise any of its opinions or forward looking statements whether to reflect new information or future events or circumstances otherwise.
This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
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Income statement
(150,404)(47,194)Adjusted PAT (Excl. Forex loss/gain)
(189,785)(52,169)Profit after tax
47,57212,627Taxation
(237,357)(64,796)Profit before tax(107,378)(33,437)Finance costs including Forex losses
US$ ’000sFor the 2 months to
December 2006For the 12 months to
December 2007
Revenue 21,792 394,514Cost of sales (1,232) (84,708)Gross margin 20,560 309,806Gross Margin % 94% 79%Operating expenditure (excluding revenue share) (32,827) (201,230)EBITDA before revenue share (12,267) 108,576EBITDA before revenue share % -56% 28%Revenue share (9,394) (158,792)EBITDA after revenue share (21,661) (50,216)EBITDA % -99% -13%Depreciation and amortisation (9,698) (79,764)PBIT (31,359) (129,979)
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Balance sheet
1,447,350768,712Total equity and liabilities1,523,158654,703Total liabilities
68,7066,721Revenue share liability
423,212100,254Other current liabilities
491,54557,847Overdrafts and short-term borrowings
539,695489,881Long-term borrowing and non current liabilities
US$ ’000sAs at
21 December 2006As at
21 December 2007
Non-current assets: 686,418 1,126,215Tangible 203,100 583,736Intangible 470,691 483,456Deferred taxes 12,627 59,023Current assets: 82,295 321,134Bank and deposits 34,529 59,142Other current assets 47,766 261,992Total assets 768,712 1,447,350Ordinary shareholders’ interest 114,010 (75,809)Minority interestsTotal equity 114,010 (75,809)