Share of the week: MTN

MTN's share has been one of the JSE's star performers since its founding 15 years ago.

MTN's market capitalisation increased from R6.5-billion in 1996 (or R3.85 a share) to a year-end value of more than R200-billion (R108.50 a share) in 2008, peaking in 2008 at over R300-billion (R165 a share) in early June of that year.

Currently the market cap stands at R235-billion. On Thursday afternoon, the share was trading at R124.89. This means that over the past decade and a half, MTN's share price has risen by 3144%. Most of this growth happened on Phuthuma Nhleko's watch. Nhleko is stepping down as CEO at the end of the company's financial year on March 31.

The share's remarkable run is based on aggressive acquisitions and explosive growth in cellphone usage in developing countries, especially Africa.

In 1996, MTN's South African customer base was a mere 200000. In 1997, it began its international expansion drive, acquiring licences in Uganda, Rwanda and Swaziland.

In 2001, the group made its most lucrative move yet by starting its Nigerian operations. Nigeria is currently the group's largest revenue earner.

By 2006, the company had 10million subscribers across its operations, growing to almost 130million by the time it announced 2010 interim results.

Makwe Masilela, market analyst at BP Bernstein, said he believed MTN was still a growth share. "The company's huge initial capex is starting to pay out. The company has been successful in areas where other companies such as Vodacom and Bharti have failed. It is operating in markets where there is still scope for explosive growth. The company has a good record of fruitful capex and it has experience in operating in very difficult markets. So I believe MTN is still a growth story."

Such is the company's dominance on the continental corporate landscape that it was recently rated Africa's most valuable brand, according to a league table compiled by Brandirectory. Its brand was valued at $4.7-billion, almost double that of its nearest rivals on the continent, Vodacom, Orascom Telecom (Egypt), FNB and Standard Bank.