Telecommunications group MTN has announced a new strategy to accelerate growth and unlock the value of its infrastructure assets and platforms.

Ambition 2025 is the result of a comprehensive strategy review during the fourth quarter of 2020 and is anchored on building the largest and most valuable platform business with a clear focus on Africa.

“We completed a comprehensive review of our strategy in November 2020, resulting in a repositioning of the business for sustained growth and greater relevance to 2025,” says MTN Group president and CEO Ralph Mupita.

“In the wake of Covid-19, the challenges of reducing the group’s risk profile and holding company (Holdco) leverage have been brought into sharper focus. The pandemic has also highlighted the opportunities presented by the shift in the global operating environment. These factors inform the case for change and need to revise our strategy,” he explains.

Given the digital acceleration taking place globally, MTN recognises the opportunity to lead in terms of digital services across its markets as customers come online for the first time.

“In so doing, there is also an opportunity for MTN to more closely align our priorities to the socioeconomic and development agendas of the markets we operate in, which will rest on a scale connectivity and infrastructure business, making use of both mobile and fixed access networks across the consumer, enterprise and wholesale segments,” he says.

The revised strategy is built around four clear strategic priorities, namely building the largest and most valuable platforms; driving industry-leading connectivity operations; creating shared value; and accelerating the portfolio transformation.

“We want to build very scale platform business on top of a strong connectivity network,” he says, noting that the five main platforms being targeted for investment are fintech, digital services, enterprise services, network-as-a-service and application processing interface, or API, marketplace.

MTN plans to structurally separate its infrastructure assets and platforms, such as fintech and fibre, to reveal value and attract third-party capital and partnerships into these businesses over the medium term.

It aims to pivot from a product to a platform play, with targets of 100-million mobile money users and 100-million Ayoba users, as well as to become the number-one network-as-a-service platform in Africa.

The implementation of this growth strategy will be accelerated through selective partnerships and leveraging MTN’s brand as the most trusted and valued in Africa, while it will be supported and funded through enhanced cost and capital expenditure efficiencies.

By 2025, MTN plans to double its consumer mobile data base to 200-million subscribers; become the “fibreco” leader in South Africa, with a total investment of $500-million over the medium term; become the leader in “owning the homes”, with ten-million home broadband users; and pursue extensive, cost-saving digital transformation.

“We have identified vital enablers to assist in operationalising our strategy, including leading customer experience; the best talent, culture and future skills; value-based capital allocation; environmental, social and governance principles at the core; and technology platforms that are second to none,” says Mupita.

“At its core, Ambition 2025 sets the context of how we will drive the business forward to take advantage of the digital acceleration trends, capture growth opportunities and reveal the inherent value in our business.”

This will be underpinned by a clear focus on driving network and operational efficiencies, with a target of realising efficiencies of at least R5-billion over the next three years.

“Going forward, we believe that Ambition 2025 will position the business to capture the exciting opportunities across our markets and our medium-term guidance has been enhanced to reflect this accelerating growth outlook,” he explains.

In 2021, about R29.1-billion will be invested into the network and into fintech and digital services platforms to support the new strategy.

MTN amended its guidance framework to align with the revised strategic priorities. This included targets of low- to mid-double-digit growth in group service revenue, mid-single-digit growth in South African service revenue and mid-double-digit growth in Nigerian service revenue.

The strategy also outlines ambitions of accelerating MTS’s fintech platform, with a target of more than 20% service revenue contribution; ensuring a Holdco leverage not higher than 1.5 times; delivering asset realisation programme proceeds of at least R25-billion; and a more than 20% return on equity.

“We are starting off on a strong foundation as we look to pivot the strategy,” Mupita adds, highlighting the progress made in the past four years under the previous Bright strategy.

The company also invested heavily to expand data coverage from 375-million people in 2017 to 504-million people in 2020.

MTN will provide more details of its new strategy and its implementation at a capital markets day planned for early June.