The MTN Group was ranked fourth among the top 60 global performers in terms of its shareholder performance index (SPI), beating a number of global communications, media and technology (CMT) giants, including Google, Hewlett-Packard and Walt Disney.
This is according to management consulting firm Oliver Wayman's annual "State of the Industry" report, which measured the performance of 450 CMT companies between December 2002 and December 2007.
SPI is a measure of risk-adjusted performance, where a company whose returns are less volatile is ranked higher if two companies produce the same returns.
"The calculation of the SPI enables consistent comparison of shareholder returns by adjusting for the volatility of returns, differences in local interest rates, and mergers and acquisitions," says Oliver Wayman.
According to the study, India's Bharti Airtel was the best performing CMT company globally, achieving an SPI of 547.
Mexico's America Movil came second, with an SPI of 535; Apple came in third at 494 SPI, MTN fourth with an SPI of 424 and Singapore Telecom fifth, with an SPI of 420.
While the winners are within the same market capitalisation range of over $35 billion, the winning company is not necessarily the biggest capitalised. Bharti Airtel's market value was noted as $45.3 billion, America Movil at $68.8 billion, while Apple was valued at $175 billion and MTN at $36.7 billion.
The top 60 performers have grown their market value by 40% over the years under review, far exceeding the 18% growth for the CMT average, the report says.
Twenty of the top 60 companies were communications organisations, with nine of the firms from emerging markets.
Outperforming mature markets
MTN's performance was in line with the strong performance of emerging market companies in this study, which saw companies from China, the Middle East/Africa and Latin American achieve market value growth of at least 30%, double the 15% seen by mature markets.
"Companies in the pure mobile sector headquartered in emerging markets now make up a stunning 59% of the sector, and have grown three times faster than those headquartered in mature markets," the report says.
Most are local entities that have benefited from the size and growth of these markets and low penetration, it adds.
MTN performed strongly in the pure mobile communications category, coming in third among the top 20.
Risky business
Frost and Sullivan ICT analyst Spiwe Chireka and BMI-TechKnowledge senior analyst Richard Hurst attribute MTN's overall performance, specifically within the telecommunications sector, to risk-taking.
"The top three highest growth markets for MTN, in their last report for figures up to September 2007, were Sudan (24%), Afghanistan (66%) and Iran (88%) - all markets that have been deemed risky due to their political situations," says Chireka.
Such markets normally present huge untapped potential and the company's approach clearly paid off, she adds.
"Markets such as Zimbabwe are shunned by most operators, but the level of demand in such markets can be overwhelming.
"MTN's acquisition of Investcom was the cherry on top as it allows them access to 20 additional markets."
Such acquisitions afford a telecoms operator the opportunity to extend its presence into markets that would be difficult to enter and compete aggressively in, she explains.
Hurst also attributes MTN's strong growth to pent-up demand. "The African mobile subscriber base is roughly 230 million and is expected to reach around 425 million by 2012, implying that there is still a market."
The full report is available on the Oliver Wayman Web site.
Related stories:
MTN dumps Telkom, eyes Verizon
MTN tops pay stakes
Share
