Data is a becoming a free commodity (or nearly so). Content has value! I cannot see a long term future for MTN and VOD - they need to change their business models. They have charged prohibitive rates for calls and built their market caps on this. There is no way they can survive on the paltry income they will receive from data "routing" in the years to come. Ultimately all "voice" will move onto the data side (that's all it is anyway.) Just look what happened to TELKOM - and she had 100 years of legacy business to survive on.
Ja Simon, the telco business model in Africa is changing rapidly. There is a serious price war going on right now. Calls rates are down to ZAR 20c per minute. What is interesting is the way the operators are outsourcing their assets and leasing them back. This is creating big cash injections into their models, at the potential risk of higher opex costs further down the line. And we are talking big money here - $100k per site, with MTN Uganda having 1000 sites. That is a $100m cash injection. Nigeria and SA will come soon, I am sure - and we would be talking 4 or 5 times that number each.
Their financial statements are "backward-looking." You cannot invest purely on that basis. You need look no further than the construction stocks for an example of this! These are really just IT companies that landed a licence to sell data, masquerading as old-style telephones companies.
I would hardly call MTN an IT company. They invest Billions in capital assets in order to provide a chargable service. Their margins might be squeezed, but they are still in complete control of the pricing. You need to view this in much the same way as a branded commodity like what Tiger Brands sell. Capex in production, Capex in distribution, low margins and pump out the volumes. Only difference with an operator, is that they can work on all kinds of vendor financed models and accounting tricks to improve margins.
Of course not - the directors almost always get it wrong eventually. It is their job to run the company, paint a rosy picture to sell to you - the shareholder (or potential shareholder) - and most importantly - draw a nice fat salary. These companies are babies - they were born in the nineties and their tech is at least that old. Just look how many tech companies stayed the course. They have proven nothing yet.
MTN is an Information Technology Company! ACER invests more in building her brand than MTN and VOD combined - and you would not argue that she is an IT company. She also invests billions in plant etc. to build kit that will be obsolete 2 years later.
Auditors aren't going to challenge any future-looking rosy pictures based on an extension of a monopoly that relies on nobody innovating around the incumbents. They're there to say 'yes, these numbers add up.'