MTN Group Ltd Interim Results Conference Call DATE: 05/08/2015

Transcription

1 MTN Group Ltd DATE: 05/08/2015

2 Nik Kershaw Good afternoon ladies and gentlemen and welcome to the analyst teleconference for the MTN first quarter [sic] results. All participants are now in listen-only mode and there will be an opportunity to ask questions later on. If you should need assistance during the conference then please signal one of our operators by pressing star and then zero. Please also note that this conference is being recorded. With that I would now like to hand the conference over to Investor Relations Executive, Nik Kershaw. Please go ahead. Good afternoon. Nik here. Thanks for joining us today to discuss MTN s results for the six months ending 30 th June With us today we ve got, group President and CEO,, group CFO, Mteto Nyati, CEO of MTN South Africa,, CEO of our Nigerian operations, and Zunaid Bulbulia, group Chief Operations Executive. Sifiso will provide a few more details on the group s performance and outlook. Thereafter we will move on to a Q&A session which the conference call operator will facilitate. A detailed version of the results announcement is on our website as well as on SENS. Over to you, Sifiso. Thank you, Nik. Good afternoon ladies and gentlemen, and thank you again for joining us. The results of the six months are reflective of a challenging operating environment, lower than expected performance in some parts of our business, and unfavourable exchange rate movements. Despite this we succeeded in growing our subscriber base and making significant strides in driving non-voice revenue. MTN South Africa delivered an improved performance but was hampered by handset supply chain challenges and industrial action. MTN Nigeria experienced a difficult six months impacted largely by unfavourable macroeconomic conditions and operational challenges resulting in declining revenue and higher costs. MTN IranCell delivered a strong performance supported by data growth. The key priorities going forward include: Increased focus on building staff engagement and improving our customer experience in the South African operation. The operation will also accelerate its capex plan to support growth prospects particularly in the data area. Concrete measures have been implemented to improve the handset sales situation. Strong focus on active subscriber management and providing more competitive voice and data offerings to high-value customers in Nigeria. Increasing data revenue by encouraging uptake through smartphone penetration and new pricing and bundling strategies. Investing in our network to support data growth and improving value and segmentation offers. Rolling out mobile money and broader financial services as well as developing our digital offering through our investment with Rocket Internet. Driving our strategy to become the ICT partner of choice. And continuing to transform our operating model and continuing to focus on cost efficiencies. Creating shareholder value through our

3 progressive dividend policy of growing dividends between 5% and 15% a year. In terms of subscriber net additions guidance for the year we expect the group to add a total of million subscribers for 2015 and the country-specific details are in the SENS. I will now hand over to the conference call operator for Q&A. JP Davids Thank you, sir. Ladies and gentlemen, at this time if you would like to ask a question please star then one on your phone, or if you decide to withdraw your question please press star then two to remove yourself from the list. I will repeat that. If you would like to join the question queue at this time please dial star and then one. Our first question comes from JP Davids at Barclays. Please go ahead, JP. Thank you. Starting with two questions please. The first question for Brett. It is really on EBITDA margins and EBITDA margins outside of South Africa and Nigeria. Clearly there was some dilution across the board, a couple of percentage points coming out. Would you say that where we are now with margins across these other operations is the new normal, or would we expect some improvement from here, or possibly even some further dilution from here? The second question is on Nigeria. This morning in the presentation we touched on some of the actions you ve taken to turn around some of the issues you are facing in some of the segments. I don t know if you can provide some colour on when exactly those remedial actions were taken, and also if you are starting to see benefits from that. Really where I m getting at there is just trying to build some confidence around revenues improving into the second half. Thank you. JP Davids As far as the other OpCos we do expect the margins in the second half to be similar to the first half. Certainly more upside than downside from our perspective. We were hit quite hard by currency movements and the forex-denominated expenses. We don t expect that to continue in all markets. We do have a number of cost reduction initiatives. So over time we are still expecting to improve margins. But I think probably for the second half probably fairly consistent with the first half margins. In terms of the remedial actions what we ve done is we ve engaged I think the key issue is we saw a dilution in spend for some of our high-value customers in some of our key markets. So now we have engaged in a very aggressive win-back offer, but we recognise that it is not something that is immediate. So we have put a plan in place for the next three to six months to make sure we get back the traffic and the minutes that we lost. So we expect to see the impact by the end of the year. We have started initiatives as I speak. And we have put in those plans for three to six months. Okay. And maybe one quick follow-up there I guess, just asked in a slightly different way. Are you still seeing the momentum in the business move in a positive direction, because in the first half it has been quite flat at minus 1%? Are we starting to see through May, June, July that the momentum of the business has improved or is there still lots of work to be done? I think the second quarter would probably not be a good quarter to use to measure

4 the momentum because in May we had a particularly difficult month because of the strikes in Lagos. I think generally speaking especially on the non-voice areas we have seen that momentum generally increase month on month into the third quarter of the year. JP Davids JP Davids Cesar Tiron Cesar Tiron Thank you. If I can add quickly, the subscriber numbers in terms of net adds for the first half in Nigeria have also been quite encouraging, although the impact of that we will see later in the year and in the next financial year. Thank you. Thanks. Our next question comes from Merrill Lynch s Cesar Tiron. Please go ahead. Hi. Coming back to Nigeria I think you mentioned this morning that network quality was a key issue of your network versus Etisalat. Looking at the capex you spent in Nigeria in H1 you seem unlikely to meet your previous guidance of capex for Nigeria. So if you are not going to be able to spend more capex First, why have you spent so little capex in Nigeria in H1? And second, if you re not going to be able to spend the capex originally planned why are you confident that the business is going to improve? If it is a problem of network quality and perception then basically I just won t get it. If you can elaborate on that please. Thank you. Okay. I think the capex is predominantly for 3G rollout. What happened in Q1 is we had a slowdown because we had to manage some inventory issues. We had a backlog of inventory and we had to make sure that we were allocating the equipment. So we were trying to deplete the inventory so we don t have a situation where we were acquiring more equipment that we actually need. So that is why there was a bit of a slowdown in the capex rollout. For the rest of the year we are hoping to roll out at least another 1,200 sites. We expect that we should be able to significantly ramp up on the 3G rollout. Remember now that we are using IMC we are no collocating, so the issue of rolling out 3G sites are a lot faster than they used to be when we had to acquire greenfields sites. If I may add, we are still running down the inventories. Those inventories for capital expenditure are already in the capex numbers of previous years. So the real capex spend on what is put on the ground is higher than what you will see from the reported numbers. To follow up on that, don t you think you should be spending even much more than what you re spending in Nigeria if you are trying to catch up with a competitor that has a better network? Shouldn t you be spending much more than what you re doing now? I think as we said we are quite comfortable with what we are spending. The issue really is that on the voice said we do have reasonably good headroom. On the data side the issue of intensifying our coverage so that we are able to get much higher

5 speeds on a consistent basis is what we are now focussing on. And we are quite comfortable that the plan that has been put in place will significantly improve the data quality in the areas that we ve identified as important for higher speeds on a consistent basis. Cesar Tiron David Lerche David Lerche David Lerche Jonathan Kennedy-Good Okay. Thank you so much. Thank you. Our next question comes from David Lerche at Avior Capital Markets. Please go ahead, David. Good day gentlemen. Two questions if I may please. Firstly around Nigerian margins specifically relating to the fact that the second part of the tower deal was only completed on 1 st July. Can you give us an indication of how much additional hit that should place on margins? And then secondly from a high-level group perspective you gentlemen have been speaking for some years now about price reductions on the voice business all over your markets. When if ever do you actually expect voice pricing to stabilise around the continent? On the Nigerian margins what we had said previously was when all the towers were transferred it would have a negative impact of between 1% and 1.5% on margins. If you re talking about the second half it would have an effect of between 0.5% and 0.75%. However that does assume a stable exchange rate. That percentage does go up a bit because a portion of the tower rental is dollar-linked. So basically that 0.5% to 0.75% we can push up a little bit more by exchange rate movements for that portion. I think the portion in dollars is 40% of the lease rentals. As the exchange rate moves for 40% of the lease rentals you can add that to 0.5% to 0.75%. Thank you. I think the second part was in terms of when we expect stabilisation of pricing. I guess that s a really difficult one to answer but we think at this stage they should really be bottoming out. I guess the issue really is also from the competitive point of view what other competitors might want to do in the market. But we think that data pricing by and large is bottoming out in this period. Excellent. Thank you very much. Thank you. Our next question comes from Jonathan Kennedy-Good at SBG Securities. Please go ahead, Jonathan. Good afternoon. Just on the funding in Nigeria, the US dollar denominated loans which you have there, is there any possibility you could use your local cash balances to start settling those liabilities? And going forward I m just wondering how that impacts from a currency perspective. And then, Brett, I know you mentioned earlier in the presentation the guidance on large OpCo and small OpCo growth rates. Do you think you could repeat that for me please? First of all on the loans, the dollar loans is just a little bit less than $600 million and

6 obviously Nigeria has local currency cash well in excess of that. We did engage with all the various lenders and we did get the approval to settle those loans early. But then when it came to the central bank they were very clear that in the current environment they wouldn t let us settle those loans early. They would provide the currency to settle them on the normal due date. No problem with that. But they wouldn t provide to settle early. So really we are going to remain exposed on those dollar loans for quite some quite. We have looked at hedging it, but it tends to be very expensive and we haven t found that to be worthwhile. We didn t give any guidance for the small OpCo but on the large OpCo we said upper single digits but with stable margins for the second period. Jonathan Kennedy-Good Jonathan Kennedy-Good Richard Barker Mteto Nyati Richard Barker Thank you. Just one follow-up question. I noticed the tax rate increased in the period. Is that something we should expect as the tax rate going forward, or should we stick with the 31% that has been typical of late? We still think we will maintain in the 31% to 32% range. Obviously excluding the effect of the tower deal, then that brings your reported rate much lower than that, which will happen in the second half. But if you take all that out it is still in the 31% to 32% range. Thank you. Thanks. We go now to Credit Suisse s Richard Barker for the next question. Please go ahead, Richard. Thank you very much. Two if that s okay. Firstly just on what you used to describe as MTN Business which I see is going by a slightly wider number of names now. I noticed that the trend rates of growth in both South Africa and Nigeria are extremely negative. And I m just wondering exactly what it is that is driving that. Has there been some kind of restructuring in terms of the way you re reporting those numbers, or is that a clean like for like comparison? If it is a clean like for like comparison I m just interested to know what are your aspirations and hopes in terms of how that business will grow going forward. Can you give me some bullet points as to what the turnaround time for that would be? That s the first one. Maybe I will let you answer that one and then chime in with another if that s okay. Okay. This is Mteto. When I look at the MTN Business overall at a group level for the first half we grew 29% year on year. Specifically for Nigeria and South Africa, Nigeria we have been consistently doing very well. That business is growing about 78%. And in South Africa we are talking about 18% year on year growth. This is where we are shifting most of our resources to drive an acceleration of that growth. The areas we believe we can be doing even better is around cloud computing and internet [unclear]. And in both of those areas we have made significant investments. Right now we are driving sales to try and leverage these investments that we have already made. I think maybe then I m talking about something slightly different. I m noticing in the breakdown of your data revenues it looks like there is a 20% decline in leased lines, WiMAX, corporate, that kind of stuff. That seems like a pretty sharp rate of decline. I

7 just wondered what the outlook for that is. Nik Kershaw Richard Barker Richard Barker Maybe what we should do is just come back on that specific question. Nik will come back with the details. Leased line and the WiMAX, that is where there is a drop. I will come back to you on that. The enterprise stuff is obviously a combination of various elements, but I will come back to you on the leased line and on the revenue trends. Thanks. The second question I was going to ask was your thoughts on where you think the termination rate might go in Nigeria. I know you said earlier you are in the last year of the existing glide path. But if you look at where termination rates have gone globally they have kept on going down pretty much consistently. I guess we are moving to a world in which we move over to voice being data then. What are your thoughts about how you expect do you expect the new regulator to put another glide path in place? It is still very early. The new regulator was just appointed yesterday. So we haven t had a change to engage with them. But I think obviously from an industry point of view we would be trying to ensure that we don t go into another interconnect regulatory regime. Like I said, it is still very early. We will engage with the regulator and I m sure we will have a better feel after we have the first meetings with him. Okay. Thanks, Mike. Thanks. We go not to with JP Morgan. Please go ahead. Hi everyone. Just two questions, one on Nigeria and one on South Africa. For Nigeria if you could just maybe give some colour on where on-net traffic percent is at the moment. And then just a follow-up on that, Mike did mention that obviously you ve got to look at your value propositions for the high-end subscribers in Nigeria. Judging by the trends there, elasticity and the voice growth it looks like the 30% discount onnet that the regulator allowed you to have is not having a huge impact. Is the next move to drop off-net pricing more? Should we expect higher interconnect costs? If you could just comment or what you re going to do with off-net pricing going forward? On on-net we are sitting at about 78%. And we would like to obviously improve that to about 80%. That is our plan for the rest of the year. In terms of the 30% differential between on-net and off-net, we are still not through with the engagement with the regulator. We actually have a particular dispute. I m sure you must have read it. Etisalat took the regulator to court. And one of the things that we are putting forward is indeed that the NCC was wrong by taking the dominant operator decision in the first place because it wasn t shown that we had any abuse of our dominant position. So we are actually going to be pushing quite aggressively for us to be allowed to go back predominance in terms of what our on-net and off-net rates were. So we were allowed a

8 lot more opportunity to actually increase that differential to at least 50% to 60%. That is the kind of thing we are going to be pushing. Nik Kershaw Alex Balakhnin Okay. That s excellent. Thanks very much. And just on South Africa, just two quick questions please. On Afrihost, its contribution to data revenues, could we get a bit more colour on what is organic data revenue growth? And then on pricing in SA, it looks like your blended effective pricing went from 46 cents in H2 last year to 47 cents now, yet at investor day you did guide that you are looking to really push up your prepaid blended pricing per minute. Voice performance was very good. I m just wondering, should we expect pricing to increase further in H2 for South Africa on the voice side. Thanks. Sorry, can you come back with your specific question? On voice pricing in South Africa you guided at the investor day that it is going to move up quite substantially by December 2015 on the prepaid side from 35 cents to 55 cents. But if you look at the number it looks pretty flattish. So should we expect more price increases on the voice side in H2? Okay, sorry. On the voice side, yes, we want to trend upwards. the intention was for us to end the first half closer to the 50 cents level. And depending on how we see the market in the second half we will continue to be looking at trending upwards. Okay. Thanks very much. And then just Afrihost is there an organic data growth trend for South Africa excluding Afrihost? It is very small. If you look at 45 in the appendix in the booklet it is R272 million revenues for the half out of R5.6 billion data revenues in South Africa. Very small. Okay. Thanks very much. The organic growth is still in the 20s and the Afrihost number is very small, as Brett said. Thanks a lot. Right. Our next question comes from Goldman Sachs Alex Balakhnin. Please go ahead, Alex. Good afternoon. Two questions from me. One is on the Nigerian pricing. It looks like the elasticity is very low, if any, on both data and voice. I was just wondering looking forward what do you expect will change the elasticity in the market? Do you plan to offer a [unclear] or this is premature? What is your overall thinking because the prices are quite low to go down? It is interesting to see at what point the elasticity will pick up and help your revenue dynamics. My second question is also on Nigeria but on the cost side. You mentioned some higher commissions and marketing spend and that you are engaging with the distribution more than you used to. Should we expect that to continue going forward? And what exactly are you doing? Are you securing some

9 exclusive contracts? What is the driver of the higher spending? Alex Balakhnin Alex Balakhnin Alex Balakhnin On the first question, yes, we are looking at volume. We are looking at a lot of opportunities around volume. We are looking at a more platform-driven type of engagement where we get customers to come onto the platform and subscribe to voice, data and [unclear] bundles because especially now that we re seeing quite some good growth on services that are unique to MTN. we are going to be doing that a lot more to try and manage the issues around elasticity that you mentioned. On the second issue around costs, what happened from the dealer point of view we put in quite a bit more effort in terms of acquisitions. So we had to put in some particular kinds of commissions to drive acquisitions in the second quarter of the year when we had some slowdown of operations in the economy like we had in April and May due to the diesel strike. So that was really one of the things that increased the dealer commission a bit. Going into the rest of the year we are going to claw that back. We are trying to manage that a lot better. We are not looking at necessarily reducing the commissions, because we have to be competitive, but we are exploring other channels. We are looking at using the convenience channels a lot more. Right now about 4% of our sales are coming through the convenience channels. We would like to expand that to about 10%. So we are going to be trying to us the other electronic channels a lot more so that it can help us manage dealer commissions better for the rest of the year. May I ask a follow-up? When you compare the subscriber acquisitions through the traditional dealer network and through the convenience channels do you find those customers comparable in terms of their revenue profile, or would the convenience channels give you more inferior users? The convenience channel is more for airtime. We still rely predominantly on the traditional channels in terms of acquiring customers. I can t make that kind of comparison that you talked about. Right. And just a very final one, on the value-added services that you mentioned as a price of the bundle, what exactly are those value-added services? Several services for example music, a digital training service. We have launched a new service called Music+ which is quite popular in the market. And there are a lot of other information services where customers can subscribe to titbits about different tings, be it news, religion, sport and those kinds of things. Between entertainment and the information service are almost about 41% of our value-added services. And then we have extra time, the money lending, the airtime lending product which is also very exciting. And then other services on LTP [?] which is really content-related services that we make available to customers. Thanks so much. That s very helpful. Thank you. We go now to Mike Gresty with Deutsche Bank for the next question. Please go ahead, Mike.

10 Mike Gresty Mike Gresty Craig Hackney Nik Kershaw Good afternoon guys. Just two from my side. First of all one for you, Mike. Can you remind us why MTN has had such a disadvantage in terms of its coverage in Lagos and Abuja because particularly relative to Etisalat you were there long before them? It s hard for me to understand why you are sorry inferior relative to them and what went wrong. I think there was at some stage a ban on access to sites that you had in Lagos or something like that. And then the other thing is one for Brett. Can you explain why your interest paid improved so much relative to the second half, because my sense has always been that your free cash generation is typically better in H2? So I would have expected you to be under a bit more balance sheet pressure than appears to have been the case. I think we ve had a build-up of cash in Nigeria which earns fairly decent interest rates. That has been the main reason for our interest improvement, attributable to the Nigeria cash. Obviously we would like to take out, but unfortunately dividends are limited to distributable reserves and Nigeria has no distributable reserves left. So we are currently working some advisors to see other ways to get that cash out such as redeeming preference shares, buy-backs etc. It really is due to that Nigerian cash where interest rates are fairly decent. Okay. On the issue around coverage I think what has happened probably is that Etisalat was very focussed around rolling out in some of those key markets. It is not like we didn t have plans to do that, but we were also rolling out in other parts of the country. The other thing that has happened is Etisalat also had from day one an IT based network from the beginning. We have had to upgrade our network to be more IT based. So we have been doing IT upgrades across all our key markets. And thirdly we also had some municipal challenges. I think it was around a year ago, at a time in which we had to roll out, which at the time created some challenges and some bottlenecks. What I think right now where we are most of those issues are resolved. Working with IMC it is a lot easier for us to roll out a lot faster. So we think that we should overcome those challenges going forward. Thank you very much guys. Thanks. We go now to Craig Hackney at NOAH Capital Markets for the next question. Go ahead, Craig. Thank you. Just on the second Nigeria tower deal, can you just remind me of the amounts that are involved there? And will that cash have to stay in Nigeria now or will you be able to get it out and upstream it? Hi Craig. It s Nik here. The second tranche of the Nigerian tower deal will be very similar to the first tranche. The transaction closed literally at the beginning of July so it will all come through now. The cash flows around this transfer deal will be very similar to what happened with the first tranche. If you remember with the first tranche there was some money that went in-country where the transaction was done at book value. And that amount will go there. And the balance of the money will come out, some to our reinvestment into the tower company and then a small part will come back to the

11 group. So exactly the same as what happened with the first tower transaction. Craig Hackney Richard Barker Richard Barker Madhvendra Singh Okay. Thanks Nik. Thank you. We now have a follow-up question from. Please go ahead. Sorry, just a quick one for Brett. The functional currency losses, what is the exact cash flow impact from those? The exact cash flow impact of those functional currency losses. It is just a conversion. There shouldn t be cash flows until loans are settled or payments made. It is just an accounting entry really to recognise the difference in exchange rate. So no cash flow. No cash flow impact. Thanks a lot. Thank you. Thank you. We also have a follow-up question from Richard Barker. Please go ahead, Richard. Thank you. Just a very quick one, just an overall question about balance sheet leverage. If you could refresh our memories about where you would like to see leverage go to, when you are content to see that happen, over time whether you think there is any need to maybe accelerate that process because you want to generate maybe a better return on your capital. Any thoughts or comments you have to share around that would be great, if that s okay. Look, it really depends. What are you going to do with that money? That is really the key question. We are very comfortable and would even like to move to moderate levels of gearing. We have very low levels of gearing now. But if you talk with no real acquisition of any sort if we move to 0.3 to 0.5 net debt to EBITDA we would be very happy with that. I think if you re looking at a more transformational, larger-scale acquisition we are quite comfortable going up to the range of 2 net debt to EBITDA ratio. Thanks very much, Brett. Thanks. Ladies and gentlemen, just a quick reminder, if you would like to join the question queue please dial star and then one. We go now to Madhvendra Singh at Morgan Stanley. Please go ahead. Hi. Just following up from the previous question, there has been some chatter about Bharti talking with Orange about exchange assets. There have been some other deals as well, Etisalat acquiring Maroc Tel and then transferring their assets to Maroc Tel. Do you think you would be interested in any of these assets if they were at a level of [unclear] for sale, especially from Bharti s stable? I guess we would be interested to acquire additional assets obviously for as long as they are value-accretive, i.e. if they are acquired at a price that we believe is an acceptable price, and also if they are really able to move the dial in our footprint.

12 Madhvendra Singh Madhvendra Singh Cesar Tiron Mteto Nyati Cesar Tiron Mteto Nyati Cesar Tiron Madhvendra Singh Mteto Nyati Madhvendra Singh Is there anything you can say right now? Are you discussing with any operator? No, we are not. All right. Thank you. Thank you. We have another follow-up question from Cesar Tiron. Please go ahead, Cesar. Yes. One question on South Africa. I m just trying to understand the improvement in margins versus last year. Is it mainly being driven by the fact that you ve been selling less handsets or is there something else which explains it? Thank you so much. The improvements are largely because of two things. One is the work that we have done in the past in terms of reducing some of the head count that we had in South Africa. And secondly it is what you have just indicated, the handsets. Those are the two key drivers. And then following up from that, in H2 is it fair to assume that you will be selling more handsets? Yes certainly, because the challenges that we faced in H1 were certainly beyond the norm. So we will be seeing a significant improvement in terms of handset revenue. But it will also have an impact on margins certainly. Thank you. That was very clear. Thank you. We go back to Madhvendra Singh. Hi. Just following up on the South African margins question, as part of the resolution to the industrial action which happened you agreed to certain demands of the unions. Can you please give us some details about your overall staff cost in 2015 and 2016 and also how that will impact the overall margins. Thank you. Okay. What we offered our employees and in turn the unions when they went on strike about two months ago we did not change. The agreement that we closed about two weeks ago is no different from what we offered them when we started. So the impact is going to be there is no additional impact. Everything is in line with what we had budgeted for. So I don t see any negative impact going forward. However, I would like to say that the union public comment on this is not necessarily reflective of the agreement. Okay. Thank you. Thank you. Our next question comes from Tantalum Capital s Ed Pienaar. Please go ahead, Ed.

13 Ed Pienaar Nik Kershaw Ed Pienaar Craig Hackney Craig Hackney Craig Hackney Nik Kershaw Hi guys. Thanks for the call. Just a quick one. How are you thinking about buy-backs at the moment, if at all, and what is the sort of Naira Dollar cost that you guys would plug in if you considered buy-backs? Thanks a million. I didn t quite catch the second part of the question. He is saying if we were looking at buy-backs what rates are we currently assuming for the Naira Rand? Nothing has really changed on the buy-backs. We will still look at doing them on an opportunistic basis. Fairly recently we utilised our excess cash that we ve had on a series of smaller type acquisitions, the initial IHS, the investment with Rocket, Afrihost, all these sorts of things. They have utilised a bit of the cash. That is very relevant to when we consider the buy-backs. On the Nigerian exchange rate if you look at the banks that protect these rates if you go through to year end the grain is from 200 staying where it is all the way though to 250. There is quite an even spread in between. Our current view is still that there is going to be slippage. And it normally happens suddenly and sharply as opposed to a gradual deterioration. Our view is still that it is going to end the year at around 220. That is our current view. It can be either side of that quite easily. Fantastic. Thanks guys. Enjoy the evening. Thanks. We go now to NOAH Capital Markets Craig Hackney for a follow-up question. Please go ahead, Craig. Thanks. Is there anything you can add on the deal with Telkom? I see the cautionary has been renewed. Is there any more light you can shed on that for us? The process is going ahead. We are still with the Competition Commission. Where we are at the moment is that the Competition Commission seems to be ready to give its recommendation to the tribunal. And we are engaging at this stage and we expect that their recommendation to the tribunal should be ready within the next two to three weeks. Okay. They haven t given you any firm dates at this stage? 16 th August is the date that we ve been given. Okay. Thanks Sifiso. Maybe just a last one or two questions, thank you. Nik, that was the final question. There are no further questions in the queue. Do you perhaps have any closing remarks from your side? No, we have no closing remarks. I just want to say thank you very much for joining us this afternoon.

14 On behalf of MTN that concludes today s conference. Thank you for joining us and you may now disconnect your lines. END OF TRANSCRIPT