MTN says it will have to start investigating options to improve cash returns meaningfully to shareholders as the emerging market telecommunications sector matures.

That’s the shock assessment of the cellular group’s outgoing president and CEO Phuthuma Nhleko.

Nhleko was due to address the company’s annual general meeting on Thursday afternoon, giving shareholders a peek at what they can expect to see at its interim results presentation next month.

In a breakdown of the presentation to be delivered at the meeting, MTN says shrinking emerging market opportunities means it needs to focus on cost-cutting and short-term deals that will bring value to shareholders.

Under Nhleko’s watch, MTN has focused on acquisitions in emerging markets.

Over the past two years, the company has engaged several emerging market players in possible merger plans. These include Egyptian business Orascom and Indian companies Bharti Airtel and Reliance Communications. None of the deals was realised.

MTN says valuable deals are becoming harder to find, and it will now switch its focus to cutting costs.

The company will be looking into infrastructure sharing, and a possible “rationalisation” of suppliers as it heads into the second half of its financial year.

Despite a slowdown in possible deal flow, the group says it will report higher margins and a 10% increase in its subscriber base.

MTN says most of the group’s operations will report good profits in their local currencies. However, it says the strength of the rand will have a negative impact on the overall revenue.

“Had rates been the same as the prior year, revenue would have been meaningfully higher,” the statement says.

MTN’s interim results are expected on 19 August. — Staff reporter, TechCentral