Good afternoon, and welcome to MTN Group's results presentation for the year ended the 31st of December 2021. I trust you're all safe and well as we continue to navigate life as we currently know it. My name is Thato Motlanthe, and I'm the Group Executive for Investor Relations for the MTN Group. I'm pleased to say that for the first time since the beginning of the pandemic, we're hosting a hybrid presentation. We're happy to welcome a small audience who are with us in the MTN Innovation Center. It includes some of our colleagues, as well as some of our shareholders who took up the invitation to come and join us.
A warm welcome also to the MTNers across our markets, as well as everyone who's dialed in through the various channels, through the webcast or watching on BDTV, and the MTN YouTube channel. Let's first get through some of the housekeeping before we get started. On the screen you should be seeing our standard disclaimer and safe harbor statement, and that covers the presentation for today. For those of us who are in the room, just a quick reminder of our emergency exits. There's one to my right and one towards the back of the auditorium. Hopefully we won't be needing them. Just turning to the period under review, and just to set some context.
Obviously the past year has brought continued challenges in the context of the pandemic, and it's brought challenges for companies around the world, and of course, including MTN. Our business has, however, demonstrated true resilience as we've continued to roll up our sleeves and to swiftly respond to many of these challenges, and taking the lead in evolving the landscape we find ourselves in. We're driven by the belief that everybody deserves the benefits of a modern connected life. The presentation today will reflect on last year's operational, financial and ESG performance, and provide some thoughts on our positioning forward for the coming year, 2022. In terms of some of the agenda items, the program will run as follows.
The MTN Group President and CEO, Ralph Mupita, will come on stage, and he'll provide us with some strategic and operational overview. Following this, Tsholofelo Molefe, our Group CFO, will come and provide some financial highlights. Then Ralph will come back to provide us thoughts on some of our key focus areas for the coming year. We will then open the floor for questions and answers, which Ralph and Tsholofelo will respond to. Just a note at this point that those who've dialed in through our webcast can actually submit the questions through that platform. For those of us who will be tweeting during the presentation, the hashtag is MTNAnnualsTwentyOne, and the Twitter handle is @MTNGroup.
It is now my pleasure, having gone through all the admin, to welcome to the stage Ralph Mupita, our Group CEO. Thank you very much.
Thato, thanks very much, and a very good afternoon from myself as well. Extending a warm welcome to everybody who's dialing in. As Thato's mentioned, we do have a change. For the first time in the last two years, we actually have guests that are at Fourteenth Avenue. As Thato said, we have a couple of shareholders who are here, so want to extend our thanks to you for joining us here at Fourteenth Avenue. Also want to extend thanks to the MTNers around the 19 markets who are the real heroes of the strong results that we've delivered over the past year.
A strong hello from myself and Tsholo, and thanks for the, you know, strong contribution that you provided in terms of the very pleasing results that we've released today. I'm sure the shareholders have now had a chance to read the SENS and taken a view on how the company is doing. Before I start the operational review, I wanted to start off by providing a context and a rationale to the enhanced guidance that we provided today, as well as the changes that we've made to the dividend policy. There's a very strong interaction between the way we're thinking about the business and the growth opportunities that we see. We're very encouraged by the performance of the business showing strong resilience in a challenging macro.
We feel confident enough to be able to enhance the guidance on the back of the structural trends that we're seeing. That obviously has an interaction with our capital allocation, our framework, and therefore how we think about dividends going forward. Let me start there and you know provide a context to how we as MTN are seeing the future and positioning ourselves for growth. As I said, we are remaining resilient and accelerating growth in actually quite challenging environments. Occasioned by COVID-19, I think we've seen that there's been a subdued economic growth across many of our markets and that obviously is a statement that goes more broader than Africa more globally.
We have seen currencies weakening, particularly against the U.S. dollar, as well as against the rand, which is our reported currency. We've seen volatility in oil prices, and beginning to see inflation coming through. We've been encouraged by the reopening of the economies that we're seeing across our markets and just the sheer resilience of the business in how it's positioned to be able to take advantage of what we're seeing as a structural acceleration in digital services. As a reminder to where the company is, you know, we have second-to-none networks that are well invested in. We have a leading brand and very strong market positions. Those, in combination, with the people that we have in our company, have given us the resilience to be able to deliver the strong results that we have.
At the core is that even through this COVID pandemic and the reopening of the economies, we've actually seen the acceleration remain structural and actually you know accelerating even further than when we were during the COVID pandemic. I want to share a slide that provides you know some context to how we're seeing what we're calling structurally higher demand for the services that we offer. Our results have been driven predominantly by data traffic as well as by the fintech transaction volumes. What you have on the left-hand side of the chart is an indexation of the data traffic through our network pre-COVID into the period where COVID was relatively intense, and then the easing of lockdown. Now, the data point on the easing of lockdowns, we've kind of used Google mobility trends.
We looked at transportation across our markets. You know, you know, it came out that it's more around the end of quarter four, 2020. Last year was actually a year where you can consider in our markets that they were actually relatively open. When you look at it, and you look at the indexation to quarter one, 2019, and to the start of COVID-19, on a quarterly basis, we were getting about 267 petabytes of data through our network. COVID came along, we accelerated to 556. The economies opened further. Yes, there were still some lockdowns, and we moved to 781. An acceleration in terms of the demands of our services and how the business actually has performed.
There's been a lot of narrative that the growth that we've seen is because of the lockdown arrangements. What we wanna say is that actually in our markets, they're actually relatively open. South Africa may be a bit of an outlier, and Uganda, which has now opened up, would be kind of the outliers. The main point that you see here is that actually there's an acceleration. You index back to quarter one, 2019, we actually have 5x the data traffic in our network. I think what's also been pleasing in the way that we've performed is taking on this load of data traffic, we've been able to do it with a reasonable CapEx budget, and you've seen our returns improving over time. The data traffic has not resulted in poor financial performance of the company.
We've been able to manage our CapEx envelopes, our investments, the expense efficiencies in the business to see accelerating growth. If you move to the right, you now look at fintech transactions. Again, indexing to Q1 2019, the pattern is the same, 2.5x the volume of fintech transactions. In last year, we had ZAR 10 billion worth of transactions through our fintech ecosystem. Again, the trend is very clearly accelerating. The trends that we've seen and the performance of the business is what has given us the confidence, within one year, to be able to enhance the guidance that we provided last year.
The main guidance points, you'll be familiar with our medium-term financial guidance which we released last year, and we are making some amendments to that to reflect the structural growth trends, the performance that we have, and our own views of what will happen over the next three to five years within the company. The first change we've made is Group service revenue, moving from low to mid-teens to mid-teen performance. You know that in 2021, we did 18.3%, so already above that guidance. South Africa, we've maintained the same, which we generally read as 4%-6%. Within the current environment, we think South Africa delivering within that range would be very good, you know, performance.
Nigeria, they upgraded their guidance at the end of January, so you know that number, at least 20%. On the holdco leverage, I think what we've been pleased with is the faster deleveraging that we wanted to see on the balance sheets actually has happened over the last 12 months. Our focus is on faster deleveraging of the non-ZAR debt that we have. We paid down the dollar debt, so we paid down some of the 2022 bonds early last year. We do have both 2024 and 2026 bonds that you know is still part of our capital structure, and probably about ZAR 20 billion equivalents if you look at current exchange rates.
We're signaling that we want to be able to have as little dollar debt as possible on the balance sheet to give us more financial flexibility to pursue the growth that we see. Now, as much as we're signaling the growth and also signaling that the CapEx envelope will move a little higher from where it was today, we're also committing to our shareholders that we are responsible allocators of capital who ultimately will deliver returns higher than what you've seen. In this prior year, we did 19.6% as return on equity. We are committing to our investors that within this growth trajectory that we see as structural and stronger, and we're seeing, you know, returns improving, the additional capital that we'll be putting into our networks and platforms ultimately would deliver greater returns.
We think that that framework is what we can deliver over the next three to five years, and we're committing ourselves to that. The capital allocation framework, obviously the underpin of how we think about growth and how we need to, you know, make decisions. At the end of the day, we have a responsibility or one of our major responsibilities is allocating capital, judiciously and into areas of faster growth. We have a very specific batting order which is going to drive and discipline us over the next couple of years. We are going to put capital to the fast growth areas that we see, in the business that will drive the return, and that's what we call the batting order number one around our organic growth.
The leverage point is certainly batting order number two, and then the return of cash to shareholders through dividends is batting order number three. We believe that the first two provide more value and growth for investors over the medium term, and hence, you know, re-emphasizing the priorities. M&A, share buybacks, and special dividends, you know, follow through in within that batting order. With that growth outlook, with the capital allocation framework, we have revised the dividend policy, and I'll come back to that, but first of all cover the dividend declared for FY 2021. We did commit to investors that we would deliver a minimum of ZAR 2.60, given the suspended dividend of the prior.
I'm pleased to announce that the board has approved and made the decision to pay an ordinary dividend per share of ZAR 3.00, ZAR 0.40 higher than the minimum we guided. We believe that this is a very balanced decision in light of our capital allocation priorities and batting orders. This balance is also progress we've seen in the Asset Realisation Programme, the cash strengthening we've seen, particularly in Nigeria, the faster de-leveraging that we've been able to deliver, and creating liquidity headroom for investments in the near to medium term. The 300 cents we feel is appropriate and creates the right balance.
In terms of the future dividend policy, we're announcing the dividend policy, which we're calling an annual dividend declaration, where the board, you know, guides on a minimum dividend in the year ahead. Again, aligned to the capital allocation priorities. We're saying that we anticipate paying a minimum ordinary dividend per share of ZAR 3.30 for FY 2022, and that will be paid as a final dividend, no interim dividend, in the calendar year 2023. I wanted to start off with these announcements because I think they're super important in positioning how we think about capital allocation and also the linkage towards the growth prospects that we have. Just moving on to the operational review and focusing on, you know, the major salient points. I won't cover the financial highlights.
I think you read them, and Tsholo will take us through them in much detail. Just calling out faster earnings growth that we've seen, adjusted headline earnings per share up by just shy of 27%. Again, faster deleveraging that we've seen on the balance sheet. The Holdco leverage now at 1x, down from 2.2x same period on the prior year. Then, obviously, cash flow. Operating free cash flow growing at about 35% on an organic basis, and then the returns, as I mentioned, improving to 19.6. All in all, strong financial delivery, which Tsholo will take us through in her section. If I look at our major markets, starting with South Africa, I think the issue of a challenging macro is well known in South Africa.
Unemployment, particularly in the second half of the year, where we saw job losses in some of the industries that you know were affected by COVID restrictions. We, as MTN South Africa, focused on investing in our network, put ZAR 9 billion of CapEx into the network for capacity, coverage, and resilience, and that helped us to maintain our number one position. I do wanna make a call-out here that we're very pleased by the South African performance, where all core businesses you know contributed to growth. The service revenue growth of 6.5% is above our guidance range. To the SA team, you know, very well done in 2021. All in all, the South African business you know doing very well.
Some pressure towards the end of the year around prepaid, particularly at the lower end. Our CVM initiatives, I think we should bring us back into a decent position. That's a function of the pressure that you're seeing at the lower end of the market. All in all, you know, very strong growth coming out of South Africa. Nigeria, again, I'll touch on the key highlights, and you've seen these results from Karl and the team. The major issue in the Nigerian context in last year was really the NIN-SIM registration issues.
I'm pleased to say that at the end of quarter four, we started seeing net additions back in the Nigerian base, 1 million net additions, you know, after degrowth of the business because we couldn't register any new subscribers. The trends we saw in quarter four have come through in the first two months of this year, so we encourage that. We're seeing Nigeria back in subscriber growth. We saw you know very strong 4G build-out of the network. We did allocate more CapEx to them on the back of you know strong growth that you've seen in their data and obviously picking up a lot of data traffic, 85% data traffic growth on the prior year.
We're also pleased to see that we had some progress on the PSB. As you well are aware, we had an approval in principle. This is what we've been looking forward to in the last two years, to really try and get our fintech business in Nigeria also scaling, you know, over time. We've been interacting with the Central Bank of Nigeria to get all our approvals in place, and we await the decisions of the CBN. Very strong results, you know, from Karl and the team in Nigeria, encouraging us as well as we have now upgraded the guidance for service revenue within that business. The other markets are looking at SEA, WECA, and MENA. I think we've seen broad-based growth across the regions.
I think a couple of highlights to pick up are all the regions growing obviously above the group service revenue guide, a performance of 18%. SEA very strong and WECA strong as well. I think in WECA we also have to remember that many of the markets are basically indexed, you know, to the euro, so very low inflation environments. Getting an 18.4% growth has been very strong. All the regions have been accretive from an EBITDA margin perspective, so driving, you know, profitability all the way to the bottom line and cash flow. If I look at fintech, again, a very strong story and performance around our fintech business.
You know, just again re-emphasizing the strength of that ecosystem, 10 billion transactions, $239 billion worth of transaction value. The main verticals within the fintech business, wallet, bank tech, merchant payments, and e-commerce, you know, performing very well. We signed up a joint venture with Sanlam on the InsurTech going through regulatory approvals now, so we should be able to launch that in the second half of this year and also start to see the InsurTech business grow strongly. We secured partnerships that are really helping us, in particular, drive the merchant ecosystem, which I'll talk to, which is critical, you know, for the growth of this business going forward. Still on fintech.
I think, as I mentioned, a really important part is the ecosystem expansion that we've seen in the business. We had 57 million monthly active users at the end of the year, up from 46. One of the key strategies has been that we want to see base penetration, and we feel that we will get the business growing very strongly when we get to about 70%. What we saw on the base penetration as we moved from 40% to 46, so starting to see an acceleration of our own JSM customers using mobile money services. Obviously a big progress was to get the PSB AIP in Nigeria.
The merchant and agent ecosystem is really the area that I think we should focus on as we think about the ecosystem effects. What was very pleasing for us is to see the build-out, in particular, of the merchant network. We've seen the acceleration of the informal merchant acquisition and the rollout, you know, of self-onboarding with our OpenAPI framework. If you look at the transaction value column, I think you will also see there that we had 45 million API transactions from partners in 2020, moving to 155 million API transactions from over 1,000 partners, scaling and building out the effects of our fintech ecosystem.
In the year, we also made progress with the structural separation of the business, and I just wanted to pause and talk to the structural separation, so that all investors understand what we mean by it and what we don't mean by it. The structural separation of the business has been about creating the accounting separation of the fintech business out of the GSM business, and with that, creating its own set of financials, its own set of commercial agreements with the GSM business because both business still have a lot of value, that you know depends on each other's business. You see, for example, airtime sold through MoMo actually is increasing.
That process of accounting separation, legal structure, set up, and then contracting has been a process that's been ongoing, and we're very well advanced, you know, with that process. We anticipate we'll complete that process end of quarter two this year. Ideally, we complete that with the PSB announcement having been made, and obviously that's subject to the regulator. When we complete that process is when we go into the second part of our process of setting up the fintech businesses separately. That is when we are going to be seeking partners who help us accelerate the business, particularly in the areas such as merchant acquiring and the acceleration of that part of our business.
That is the part that we've said that we would focus in the second half of the year and once we've created the structural separation. At the end of this year, want to have completed two aspects of the fintech, the completion of structural separation by the first half, and then bringing onboarding strategic partners to help us accelerate the business. We'll report on the progress of that as we go through our H1 results. If I move to the portfolio transformation, just a few call-outs. You know, good progress we've made around in terms of IHS being listed in New York. We're obviously disappointed with the current valuation of the business, and if that valuation persists, we wouldn't be selling down as per the right that we have at the next window.
There's an April window for current existing shareholders to sell down. Given the state of the balance sheet, we're under no pressure, you know, to sell at values that we think materially undervalue the business. It does, the listing has created a liquidity platform that we can tap into in future. Obviously, you know, we have the next three years plus that we can think about, thus, you know, the monetization of the asset. We've made good progress on the SA tower transaction, and we are awaiting Competition Commission approval on that. You know, net proceeds on a successful transaction would be about $5.5 billion. Then the other call-out I'd have on the portfolio transformation has really been about the Nigeria sell down.
We sold down 3% of the group holding in Nigeria, and net proceeds of that is approximately about ZAR 3.6 billion, and we anticipate that that will flow in the first half of this year. In terms of simplifying the portfolio and, you know, really driving our Pan-African focus, progress made, yes, in Yemen and in Syria. Afghanistan, we continue to evaluate options. The events post August last year, you know, complicated our ability to engage with some of the parties that we're talking to, but we are continuing discussions, and we'll be able to update investors on our progress thereof. We've said we wanted to exit in an orderly manner, and that is something that we will obviously be focused on.
On creating shared value, I think investors are now familiar with our framework in terms of our ESG responsibilities. A few points of call-out here. Firstly, you know, we're making good progress on greenhouse emissions reductions and 16% on scope one and two. We are rebasing scope three, and so for last year, you know, we are reporting on the scope one and two. But for scope one, two, and three, we're still committing to our reduction levels of 47% by 2030. Good progress there. Rural broadband, you know, great progress made in the year. 83% broadband coverage, that is, you know, access to at least a 3G technology, and we have a target of 95%, so good progress in the year.
Our diversity and inclusion measure is women in senior management in the management layers. We made a 1% improvement from 38 in prior to 39. Still a long way to go to get to the 50%, but have got very clear plans at the group and in all the operations to get there. One of the important things, and we took feedback from investors, is about how do we link the ESG agenda to executive remuneration. As of 2022, the LTI has a 25% linkage to ESG, the three-year LTI payout structure. It has three components, which is net zero, diversity and inclusion, and then on the rural broadband.
Many thanks to our colleagues for the great progress that we had and improvements in our ratings in the year past. Finally, just to talk about, you know, some of the numbers before I hand over to Tsholo to take you in more detail. Again, on our old guidance structure, you know, pretty much green on the service revenue. We outperformed on service revenue. Fintech is on track. This movement to 9.3 is actually above what our expectation was. We spoke about holdco leverage and also spoke about returns, so good progress in delivering on the guidance that we committed to investors. With that, let me pass on to Tsholo, and then I'll come back with a look-forward view after Tsholo presents.
Thank you very much, Ralph. A very good afternoon to everyone joining us in person and virtually on various platforms, today, and especially hello to all our MTNers across all our markets who are joining us for these results. I'm going to take you through our very pleasing results, the financial performance for 2021, and I will cover the following. Firstly, what are the material items that have impacted on our reported results? I will then take you through some of the salient features on the income statement and then share with you some of the performance of our two largest markets, particularly South Africa and Nigeria. I will then move on to the key line items, specifically in a bit more detail on the income statement.
Lastly, share with you how we've been able to generate strong cash, manage the balance sheet, as well as improve returns. If we start with the material impact on our reported results, you will notice that from a currency movement perspective, the stronger rand on an average exchange rate basis resulted in group service revenue being impacted negatively by 17 percentage points relative to constant currency. The rand was also stronger against the Nigerian naira by about 18.5%. The rand also closed weaker against the dollar, impacting balance sheet items, but also impacting on Holdco leverage negatively. We also recorded Forex losses of about ZAR 2.6 billion during the year, largely due to currency devaluation in various markets relative to the stronger rand. We also had some significant one-off items.
Some of these we reported, and during our interims, we had a gain on disposal of BICS of ZAR 1.2 billion, and we recorded a loss on the recognition of MTN Syria when we lost control at the beginning of the year, a loss of ZAR 4.7 billion. Yemen, as Ralph indicated, we have exited and it has been assessed at nil, and we have recognized some impairments on goodwill as well as non-current assets totaling about ZAR 1.2 billion. We also made some COVID donations during the year of ZAR 486 million, with ZAR 383 million to the AU for COVID vaccines, as well as ZAR 103 million from MTN Nigeria to a coalition against COVID.
We also provided for a multi-year arbitration settlement during the year, amounting to ZAR 536 million. All these significant once-off items have had an impact on our expenses, EBITDA, EBIT, as well as headline earnings per share. Some of the items that are key to note is also the significant appreciation in the group share price, which has impacted our staff cost significantly due to the share-based payments of roughly about ZAR 1.2 billion, resulting in a reduction in EBITDA margins of 0.6 percentage points. We also upstreamed a total of ZAR 18.4 billion from our operations, with a total of about ZAR 7.8 billion coming from Nigeria dividend upstreaming. An additional ZAR 430 million was also upstreamed from Nigeria post December 2021.
The progress with upstreaming has positively impacted our holdco leverage, which I will share with you later. If we move on to the income statement, you will notice that on your left-hand side, you have the year-on-year movement on key line items on an IFRS reported basis, and on the right you see the movement in constant currency. As we said, we delivered good solid service revenue growth of about 18.3% to ZAR 171 billion, which is ahead of our medium-term target in constant currency. This was really largely driven by double-digit growth that we saw in Nigeria and Ghana.
We also saw good, pleasing results from South Africa, with service revenue of about 6.5%, in line with their medium-term target of between 4%-6%, compared to a growth of 1.6% in FY 2022. On an IFRS basis, if we look at EBITDA, which decreased by 6.3%, but in constant currency before one-off items, as we mentioned earlier, EBITDA increased by 23.7%, and this was really driven by healthy operational results across all markets.
The 7.6% increase that we see in depreciation, amortization, and goodwill impairment was largely driven by increased capital expenditure additions that we did in prior periods, but also, as I mentioned earlier, the goodwill impairment, which we recorded in the period for Yemen. Net finance costs, you will realize that it decreased by 12.5% in constant currency, largely due to a reduction of ZAR 2 billion year-over-year in Forex losses, but also due to a lower interest rate environment and there was a significant reduction in net debt, which I will share with you later. The share of results of associates, as you can see, increased by 80% to ZAR 2 billion, and this was driven primarily by the strong underlying performance from MTN Irancell, which is an associate.
Income tax expenses grew by about 25%, largely due to withholding taxes, as well as an increase in non-deductible expenses in other markets. The group effective tax rate, however, was 41%, and really this was impacted by non-deductible losses, particularly from the derecognition of MTN Syria that I mentioned earlier. On a normalized basis, we saw group effective tax rate being at 35%, which is really in line with our target of mid to high thirties. Adjusted earnings per share grew by 26.6% in the period, and this was impacted positively by some of the adjustment on non-operational items, totaling ZAR 1.23 per share that I mentioned earlier.
If we unpack our group service revenue in a bit more detail, you will see that we saw pleasing revenue growth across all bearers with voice, data and fintech being the main drivers of the growth. You will see that voice revenue grew by 5.2%, supported by growth in voice traffic. The performance was also supported by our well-executed customer service, customer value management initiatives, as well as segmented customer propositions.
We saw stellar growth in data revenue, which grew by 36.5%, underpinned by a surge in data usage, as you saw in Ralph's slide, 53% growth with about 6.4 Gb per user per month, and active subscriber growth of 11 million to now close the year at 122 million subscribers. Digital revenue also increased by almost 23%, and this was supported by an improved uptake in our digital offerings in our markets. We saw good increase in service revenue from fintech, driven by a base growth of about 10.4 in our active MoMo users to now 56.8 million.
Wholesale revenue also grew by about ZAR 49.7 million on the back of a strong national roaming in MTN SA, and I'll take you through that later on. Other revenue also included ICT and enterprise connectivity, which grew by 14.5%, benefiting from increased data users on the back of strong performance in fixed access data, cloud security and hosting services, particularly from MTN South Africa, and some turnaround in some of the SME segments across our market. Now let us look at fintech in a bit more detail. You will have seen the operational performance, and this is how it translates into the financials.
As you will see, fintech now contributes 9.3% to group service revenue, which rose by 30.9% in the period as we continue to scale up our mobile financial services. The bulk of the fintech revenue, as you see on the pie chart, mainly came from withdrawals at 57% of the total revenue. EBITDA growth was 31.5%, in line with solid service revenue growth, which on a pro forma basis EBITDA margins at 46.7%. We do expect that the EBITDA margins will rebase over time as the growth picks up and we start allocating the full cost associated with running the business once we have structurally separated the fintech business.
A key metric here to look at is actually our free cash flow, which was strong at 29.8%, which is really important given the economics of the business, which is really capital light. You will notice that we spent ZAR 200 million in capital expenditure towards the fintech business. If we move on to the financial performance of our two major operations, and I will start with South Africa. The slide illustrates the trends that we saw in service revenue, expenses, EBITDA, as well as capital expenditure. You will notice that MTN SA delivers solid performance overall with service revenue of 6.5%, enabled through commercial and operational execution across all business units.
If you look at the various revenue bearers, you will see that revenue, voice revenue was actually down by 5.2%. This was driven mainly by consumer prepaid voice, where the push for bundle usage is diluting out-of-bundle usage. The prepaid in-bundle revenue increased, but was not sufficient to offset the reduction that we saw in out-of-bundle. The decline, however, was also due to the impact of a 4.6% decline in prepaid users as customers migrate to Voice over IP, as well as data substitution. We saw an increase of 13% in data revenue, supported by 58% growth in data traffic and the growth in active subscribers of 12.5%, now totaling 17.7 million subscribers.
Core digital grew by 19.5... 19.9%, benefiting from a number of growth initiatives, including billing optimization, as well as other products, new products that were implemented. Fintech revenue started to pick up, and it comprised of airtime lending fees, which grew by about 3.5%. This was also driven by an increase in XtraTime lending fees with MoMo. As I indicated later, we start to see it picking up in South Africa. Wholesale revenue grew by 36%, and this was driven mainly by notable improvement in Cell C. MTN SA recorded ZAR 2.7 billion in roaming revenue, particularly from Cell C, which was an increase of 33.9%.
We continue to account for Cell C on a cash basis, and we had unrecognized revenue of about ZAR 236 at the end of the period. If we look at the expenses from MTN SA in a bit more detail, you will see that cost of sales only grew by 3.5%, which was way below the service revenue growth. The main increase was in handsets and device costs, as well as commission expenses of a lower base due to COVID impacts in 2020. The device cost of sales was higher by about 5.6%, and this was largely due to the LTE device distribution during the period, with an increase of about 24% in LTE devices sold.
MTN SA has been able to improve its gross margins through the optimization of device subsidies, which contributed about 0.5 percentage points to the EBITDA margins. Commission expenses were up about 6.4% due to increases in device distributions and activations during the year. If we look at operating expenses, it grew significantly by 13.1% year on year, but this was mainly impacted by staff costs that grew by 43% as a result of the increase in the share-based payments, as I indicated earlier, because of our increase in our share price. If we exclude this item, staff costs in South Africa would have only grown by 1.1%.
Other drivers of the OpEx increase were due to network operating expenses, which increased by almost 5%, predominantly due to rent utilities, as well as maintenance, and this was really driven by high electricity tariffs of about 15% during the period. We saw MTN therefore achieving an EBITDA growth of 6.8% with an EBITDA margin of 38.9. The EBITDA margin of 38.9 was actually impacted by the share-based payments. If we excluded that, we would have seen a margin of 41.4% in South Africa, which is really within the guidance that we've always given of between 39% and 42%. MTN spent a total of ZAR 10.4 billion, and this includes the...
This is on an IFRS 16 basis with continued investment in 3G as well as 4G and a rollout of 5G sites of about 843 during the year. This resulted in CapEx intensity on an IFRS 16 basis of 21.4. If we look at it from an IAS 17 perspective, CapEx intensity was at 18.8% this year. If we look at all the segments, then, across South Africa, encouragingly, you will see that the consumer prepaid business was up 2.1% during the year, slowing down in the fourth quarter. The business's performance, however, was supported by strong data revenue.
However, this was really offset by pressure from voice, as I indicated earlier, voice substitution, challenging macroeconomic conditions, as well as an increased split of consumer wallet share that we're seeing. The consumer postpaid business delivered service revenue growth of 4.5% in a highly competitive market. The focus on subscriber additions was driven by channel expansion, well-managed churn, and a consistent drive for SIM-only deals as well as data-rich packages, which contributed to this growth. Enterprise service revenue remained on a positive trajectory with growth of 16.8%, now recording growth for more than nine consecutive quarters. The business continues to grow through fixed data deals, strengthening the SME CVM initiatives, as well as sustained recovery of the ICT business.
If we briefly touch on Nigeria, I will only just touch briefly because you would have seen the results of Nigeria at the end of January. MTN Nigeria, as you can see, delivered double-digit service revenue growth of 23% in constant currency, and this was mainly driven by voice, data, as well as fintech. Voice revenue grew by 8% due to higher usage in active SIM base, with a 10% growth in minutes of use. We saw a solid data revenue growth of 55%, underpinned by increased usage from the existing base, with impressive data traffic growth of 85%, supported by the acceleration of 4G rollout and enhanced network capacity.
FinTech revenue also had commendable growth of 57%, due to sustained growth in the use of XtraTime and broader FinTech services by customers. In terms of expenses, you will see that we saw an increase of 17.5%. Cost of sales grew due to higher commissions and distribution costs, in line with the revenue growth, which were up 14%. Regulatory fees went up by 23%, also in line with the revenue growth that we're seeing. We saw an increase of 21.7% in operational expenditure due to higher network costs from accelerated site rollout, but also due to the devaluation of the naira and CPI impacts on the current BTS rentals. MTN Nigeria also continues to implement expense efficiencies and eight...
Aimed at driving margin expansion in the near term, thus improving the EBITDA margin to 53% by 2 percentage points. Total capital expenditure in MTN Nigeria was about ZAR 14.9 billion for the period, and as I indicated, due to the accelerated rollout of 3G and 4G sites, resulting in CapEx intensity of 24.8%. Now, if we turn to group expenses, which were well managed during the period, you will notice that cost of sales was up 10%, largely driven by increase in commissions and distribution costs, as I indicated, mainly in Ghana, SA, and Nigeria, as well as an increase in handsets at cost in South Africa over smaller base.
The increase in commissions and distribution was mainly driven by the strong growth in our MoMo business and increased activations compared to 2020. Operating expenses increased by 15.9%, and this was led by higher network and as we continue to roll out sites across all our market. The IFRS charge or the share-based payment also would have had an impact on staff costs, as I indicated earlier. We continue to see relentless focus on cost management across all our markets, despite the growing business, with our expense efficiency program continuing to drive margin expansion. In the year, we realized ZAR 3.7 billion worth of efficiencies, with the largest savings coming from MTN SA, as well as Nigeria. The savings in OpEx were largely realized in the network environment.
We continue to target savings in network and IT costs, sales and distribution, as well as energy efficiency going forward, as we anticipate that these will contribute significantly to targeted savings of a further ZAR 5 billion over the planning period, over 2020 base. If you look at the EBITDA then, you can see that the drivers of group EBITDA, both in absolute terms, as well as margins. Overall group EBITDA on core operations was up 20.3% in constant currency, as I indicated earlier, before one-off items. The growth was really broad-based across all the performance from all the markets, in particular Nigeria, South Africa, the CER region, as well as the WECA region.
At an operational level, the EBITDA margin expanded by 2 percentage points, with positive contribution from all the markets, supported by solid service revenue growth, as well as relentless focus on cost. The group reported an EBITDA margin decline by 4.1% on a reported basis, and this was mainly impacted by the derecognition of MTN Syria and as well as the losses that are indicated on impairment of Yemen. Moving on to the adjusted headline earnings per share analysis. This table provides a reconciliation of our attributable earnings per share through to adjusted headline earnings per share, and this gives more visibility to our strong underlying performance during the year.
The difference between attributable earnings per share, which declined by 19.3%, and basic headline earnings per share, which grew by 31.8%, is due to the significant once-off transactions that I mentioned earlier, being Syria losses, Yemen impairments, and some gains on disposal of investments and acquisition of a subsidiary, thus resulting in basic headline earnings per share of ZAR 9.87. A further adjustment to reported headline earnings for forex losses, COVID donations, and arbitration settlement resulted in adjusted HEPS of ZAR 11.10 per share, giving an increase of 26.6% year-on-year, which is an indication of positive operational earnings momentum.
If we look at capital expenditure, as we indicated, we remain focused on building the largest and most valuable platforms and increasing the capacity of our network. We capitalized ZAR 32.7 billion during the year across all markets, which is higher than our original guidance to the market, achieving a CapEx intensity of 18%. We accelerated the rollout of 3G and 4G sites in support of the growth that we are seeing, mainly in Nigeria, Ghana, as well as Uganda. We rolled out a total of 3,566 sites, which was 90% more than we planned, and about 9,158 4G sites, which is about 36% more than we planned.
If you look at on the pie chart, you will realize that network expansion, which is the RAN transmission, the core network as, and as well as site infrastructure, accounted for a total of about 76% of the total capital expenditure. Investments in IT modernization, including the development of product tools to support our growing platform business accounted for about 24% of the CapEx. As I indicated in MTN SA, they continue to invest in the 5G network rollout with about 843 sites that were live during the period.
Our group CapEx guidance for 2022 will be ZAR 34.4 billion, and we expect the intensity to reduce over the medium term as the business continue to grow, guided by our disciplined capital allocation framework, with group CapEx intensity expected to be in the range of 18%-15%. If we look at our cash flows, you will notice that operating free cash flow before the spectrum as well as license acquisitions grew by 35%, and this was due to strong cash generation from operations of ZAR 67.3 billion, which was an increase of 15%, really driven by solid operational performance across the markets.
You will see that our license renewals and spectrum acquisitions, which was mainly from Nigeria 5G spectrum acquisition, amounted to ZAR 6.2 billion in the year. We also saw an improvement in our working capital of ZAR 4 billion, and this was largely due to the timing effects relating to payment of vendors and suppliers, mainly in Nigeria. Working capital will remain a key focus area for us as we continue our efforts to preserve cash during these challenging trading conditions. You will also see that the key cash outflows, we paid a total of ZAR 22 billion in taxes as well as interest, net interest paid on borrowings. As well as interest and this excluded the CapEx excluding lease payments of about ZAR 29 billion.
The movement in financing activities, as you can see, was ZAR 24 billion, and these were largely driven by net repayment of debt and settlement of lease obligations of about ZAR 6 billion. During the year, we actually settled ZAR 44 billion in debt, which was offset by new borrowings of about ZAR 24 billion. The ZAR 44 billion also included some refinancing. This was also positively impacted by the proceeds from the Uganda listing of ZAR 2.3 billion. Other investments of ZAR 4.3 billion were driven mainly by proceeds from disposal of investment in BICS of about ZAR 1.8 billion, realization of fixed deposits at head office of about ZAR 1.4 billion, and from Nigeria of about ZAR 3.5 billion.
These were offset by movements in restricted cash of about ZAR 1.5 billion, mainly in Nigeria relating to letters of credit. If you look at the Holdco net debt, we continue to improve the strength of our balance sheet with progress in cash upstreaming and the faster deleveraging of the Holdco debt. On the top left-hand side, you will notice that the group progressed well over the last two years, reducing Holdco debt from ZAR 55 billion in 2019 to now ZAR 30 billion. The group leverage improved to 0.4x from 0.8x in 2020.
This was supported by strong cash generation from operations while the Holdco leverage also improved to 1x from 2.2x in 2020, positively impacted by the progress that we've made on cash upstreaming as well as settlement of borrowings. We've also made improvement in our debt mix. As we also said, we would like to make sure that we have a mix of 60% rand debt relative to non-rand debt. We continue to reduce our exposure to U.S. dollar debt and improve the funding mix at Holdco level. If you recall, we also redeemed a 2020 Eurobond of about $500 million, which was due to mature in February this year.
During the year, we also utilized the proceeds from our ARP, which is our Asset Realization Program, and cash upstreamed from operations to be able to repay our debt in Holdco. This comprised about ZAR 12.6 billion in USD-denominated debt, as well as about ZAR 8 billion in ZAR-denominated debt. We also concluded about ZAR 5.6 billion in debt through a combination of local debt capital market issuances, as well as bank facilities. This allowed us to extend and maintain a smooth maturity profile, as you can see on the right-hand side, as well as enable us to improve our cost of funding and to further improve the Holdco debt mix going forward.
Looking at the statement of financial position, sorry, I just want to highlight some of the major movements on the balance sheet. The increase in intangible assets and goodwill was largely due to the acquisition of the 5G spectrum in Nigeria. Included in other non-current assets is our investment in IHS, which we fair valued at about ZAR 19 billion during the period. As Ralph indicated, the devaluation of the IHS was largely due to the negative share price movement following the IPO listing in the New York Stock Exchange. The MoMo deposits and payables amounted to ZAR 39 billion, and this was due to increased cash-in deposits in line with the growth in our MoMo business.
You will see that the increase in our cash and cash equivalence resulted from increased cash generated from operations across the group. Non-current asset held for sale comprises the MTN SA tower sale and leaseback transaction. The interest-bearing liabilities, as I indicated, decreased, which was a 16% decrease, and mainly as a result of the settlement of debt. Other liabilities increased by 16%, and the growth is mainly attributable to accrued expenses, mainly from Nigeria as a result of unsettled foreign denominated liabilities. Non-current liabilities held for sale is in line with the non-current assets held for sale that I indicated, and these are lease liabilities relating to MTN SA tower sale. Now, if I can conclude my presentation, let us look at the progress we've made on the return on equity.
We see an increase from 17% in December last year to now 19.6%, really driven by operational earnings growth from the consolidated subsidiaries. The notable drag on the ROE were higher group effective tax, as I indicated, at 141%, and the movements in non-controlling interest driven mainly by the Rwanda as well as Uganda reduction in shareholding, and the FCTRs, which are foreign currency translation reserves as a result of the weaker rand on the reported results. We are pleased with the ROE evolution, which is really just shy of our target medium-term target of over 20%. Ladies and gentlemen, I will conclude my presentation here and hand over to Ralph.
Thanks very much, Tsholo, for taking us through a very comprehensive view of our financial performance, both at the group level and looking at our major subsidiaries. I think, as investors, you'll all appreciate, we're a large group. I trust that you are, you know, more familiar with the performance, after, you know, Tsholo's presentation. Just a couple of points, you know, before we close, just looking ahead. Obviously we are a couple of months into 2022, and just the context that we see in our operating environment would be as follows. I think we will continue to see a sluggish economic performance, in many of our major markets in South Africa.
I think South Africa did a bounce back in GDP growth last year off the low base of 2020. But constrained by the unemployment issues related to structural reforms coming forward. I think we are strongly encouraged in South Africa that, as we speak right now, we are in the middle of the spectrum auction process, which the main auction proceeds tomorrow. Structural reforms overall are much needed in South Africa to get GDP growth rates. Nigeria, I think it's anticipated that again, we will see a sluggish growth. The thing I would say here is that these were a pretty similar kind of economic outlook positions as last year, and that is MTN, notwithstanding the COVID effects and the sluggish economic outlook.
We're able to be resilient and to be able to take advantage of the opportunities that we see with mobile and the fintech acceleration that I painted earlier on. The macro context we see as potentially challenging, you know, through the year ahead, but the business has resilience, strong networks, strong brand, and the economies of scale that allow us to withstand shock if we see such as the year progresses ahead. A similar kind of macro context, you know, as per 2021. If we look ahead specifically to MTN, what are our priorities? Our priorities largely stay the same. We are focusing on looking to accelerate the growth that we see in both South Africa and in Nigeria.
South Africa, as I said, we would be very pleased if the business is growing within the 4%-6% range, and getting the EBITDA margin in the 39%-42% range. As Tsholo said, if you took out the IFRS to charge, actually South Africa was a business that was, you know, growing at 41% in terms of the EBITDA margin. We will see pressure in consumer prepaid. We do have CVM initiatives that we believe will help us, you know, stabilize the pressure that we saw in the consumer prepaid, particularly quarter three and four. That's pretty much across the SA market.
The South African business, you know, we believe has got is well invested and will be resilient to deliver, you know, good growth in the year ahead. Nigeria, we're seeing accelerating growth, hence, we upgraded the guidance there. The rollout on 4G, you know, is we've been able to monetize that. Having procured the 5G spectrum, it was a plan to build out on 5G services, both for the home and business, individuals and businesses. You know, it'll be a story that we'll be talking to you about the progress we've made at the half year. As I mentioned, on fintech, two big things. Complete the structural separation, the accounting, the intercompany agreements, the full setup of group fintech, and ideally the PSB was within that construct.
Our first step, and then secure strategic partners to support the acceleration of the Group Fintech. We'd always positioned that, in some of the platforms, we will seek partners to help accelerate the growth, and to better manage those businesses, in the form of those platforms. Quite a lot of focus and attention from us as a management team around that. Obviously we've delivered ZAR 15 billion of the ZAR 25 billion on the ARP. We've still got some way to go. We are looking forward to progressing with the Nigeria sell down series two in the course of this year. And obviously would want to see the series one cash come up. You know, focus on executing on the localizations, you know, remains a focus for us.
The exit of Afghanistan, done orderly, is also a priority for us. I mean, the networks remain the bedrock and foundation of the company, so we're putting a full investment profile of ZAR 34 billion. We will be within the CapEx intensity range that Tsholofelo Molefe spoke about, 18%-15% over time. Capital well invested and efficiently invested, you know, to deliver the returns. Obviously we still have a set of complex litigations in the Middle East in Afghanistan that we're dealing with, and Turkcell, so we'll be working around those. Finally, you know, our ESG initiatives and priorities to bed those down and actually take on progress. This is the list of our priorities, which we will report back on progress at the half year.
Suffice to say that, you know, these priorities are pretty much similar to the ones we had in prior years. You know, trying to drive momentum and, you know, doing the same things that we've done and not, you know, throwing our strategy around, too much. Just in conclusion, I mean, I just wanted to, you know, leave you as audience, investors, and stakeholders with six key points. The first is that, in the year under review, we've seen very strong operational, and sustained commercial momentum. That translates into the base growth that we've seen and into the financials, including return improvements, both at an equity level as well as cash flow level. The business now has a lot of financial flexibility if you look at with the hard core leverages.
We are maintaining the liquidity headroom to be able to take advantage of opportunities to invest in growth, but also to be able to withstand shock in this current kind of geopolitical context, where there's a lot of uncertainty still. We are pleased with the shifts in the debt mix as well as the fact that we now have predominantly ZAR debt at the center. Progress in ARP and portfolio transformation, you know, has been made in the year. We still have quite a bit to do. As I mentioned, you know, the focus on fintech and growing that ecosystem out is something that we're very focused on.
Creating shared value, you know, driving further our ESG work, as well as the localization has been something that we've been focused on, and we're very happy with the progress. Then the final point, linked to my earlier statements about the enhanced guidance is we are seeing growth, and we think that that growth is structural. We are going to invest into that growth and deliver, you know, improving returns for shareholders. Hence, we are enhancing the guidance from FY 2022 as communicated at the start of my presentation. Just to remind investors, what we see ourselves as MTN. We see ourselves as a compelling Africa growth story. We see tremendous amounts of growth, both in data and fintech, and more broadly across the company.
We believe that the investment case for MTN remains intact, a unique company that is able to deliver growth on the digital and financial acceleration that we're seeing across our continent. With that, I just wanna thank you all for listening intently to myself and Tsholo for over an hour. We'll just invite Thato to manage the Q&A that you may have. Thato. I'll ask Tsholo to join me on the stage.
Thanks, very much, Ralph and Tsholo, for the presentation. Maybe we'll just start the questions with your final point there on your six points. It's really just some clarity around the growth guidance. You've upgraded your group revenue growth guidance. How much is that due to the Nigeria outlook versus the other markets? Maybe that's the first question.
Okay.
The second question, on Nigeria, can you give us your assessment of the availability of USD in the Nigerian market and how it's impacting on repatriation? Or maybe you can just add in, you know, the average rate that cash was upstream from Nigeria?
The average rate, I'll leave to Sulu. She will remember all those numbers. I mean, on the first question really around the outlook, Nigeria is obviously material. It's a third of the group. You know, when we enhance guidance and all things stay the same, you would enhance guidance for the group. We did enhance guidance for Ghana as well. As I said, we're seeing structural trends throughout our portfolio of rising demand for data and fintech services. It's not only Nigeria. It is a material point. Ghana is another material point, but we're seeing a broad base. The market that we think that our guidance remains largely intact will be South Africa, and that's why we have not touched South Africa. Think of it as the 4%-6%.
I don't anticipate that we'll be above 6% this year, to be clear to investors, but we will be within the corridor of 4%-6%, in terms of South Africa. Coming to the point of liquidity, hard currency liquidity, you know, Nigeria, we took the dollars as and when we were able to get them, you know, under the CBN structures that we are being able to repatriate. I would argue that nothing has changed materially from the half year. You know, our team go to the window, and they get $10 million or $15 million. That's how we've been able to get it.
Post the year end, last year we had $7.8 billion coming out, and post the year end with half a billion. We anticipate that series one, we should be able to clear that, you know, you know, outside of any shocks, we should be able to clear that in the first half of this year because we want to commit to series two in Nigeria only when we have money out from series one. We wouldn't be committing to series two and having more cash trapped in Nigeria. Yeah, we're still able to get dollars, and obviously the team are getting dollars and using LCs for the CapEx program. On the average exchange rate?
Yeah, we externalized at an average of about 480. I think, you know, very important to understand that, yes, there is a premium, and the size of the externalization is also a factor. If you think about the fact that we've been able to upstream ZAR 7.8 billion, including, you know, about 430 post-December, it is quite a large size. We're quite happy that we've been able to clear all the outstanding dividends from 2019.
Thanks, Ralph and Solo. Maybe just the next two questions to do with fintech. What form might fintech strategic partnerships look like, and on what criteria do you assess partners? It's the first question. The second one, point of clarity, can you elaborate on the nature of the fintech revenues earned in South Africa versus your other main markets, if there is indeed such a difference? Yeah, I mean, on the partnership point, as I mentioned, what we're looking for is strategic partners that can help us accelerate. Now, what you've got to think about, we have five verticals within the Group Fintech, and each of them, you know, potentially require different partners to drive acceleration.
We did show in the slide some of the partnerships that we've made to drive acceleration. For example, we said, we think we can grow faster by partnering Sanlam on InsurTech. You know, subject to regulatory approvals, they are a strategic partner who can help accelerate. We're not saying that there will be a strategic partner necessarily in the Group Fintech. You need to think of the ecosystem of the verticals and companies that are able to. Because we are very focused on strategic partners to accelerate. We're not looking for financial investment, to be clear. Our you know, we have the CapEx to drive our own growth. We believe partnership is the right model to drive those.
The simple way to think about the strategic partners that we are looking for this year are the ones that are able to help us grow the verticals or a couple of the verticals faster than we would ourselves. That's the way to think about it. You know, any capital that comes with that process actually is a secondary consideration. The primary consideration is the partnership model to scale the verticals. I mean, obviously, South Africa is a very different fintech market. South Africa, you know, obviously we need to work with bank partners. We don't have e-money license regimes or PSB type regimes. Ours is to work with bank partners to focus actually on what we call a proposition of better and safer than cash.
We're not trying to compete with the banks in South Africa. We're actually trying to deliver financial inclusion in largely informal markets. The business is right now very nascent. And I think it's a business that we think, you know, over the medium term, you know, can have monthly active users, you know, somewhere between 4 million-5 million. It's very nascent right now, but it will add to the portfolio over time. South Africa is a very different proposition to what we have, like in Ghana and potentially what we're gonna have with the PSB, you know, subject to regulatory approvals. Thanks, Ralph. Maybe two questions on Iran. Can you please comment on what drove the performance in Iran and your expectations for the coming year or two? First question.
The second one is, how much do you have stuck there in terms of receivables? I think we disclosed that at ZAR 3.4 billion.
Yeah. What is your strategy in terms of how you look at repatriating that money? Yeah, I mean, maybe to start with the second question last. I mean, obviously, with the sanctions regime being in place, you know, for our own sanctions compliance and management of sanctions risk, you know, we've left that money trapped in Iran and actually provided as loans to the company. You know, if the JCPOA deal is struck, obviously changes the situation where we would be able to repatriate capital. Until such time, that cash and the dividends that we're declaring are remaining trapped within that environment. You know, any movement on the nuclear deal and incorporation of Iran into the global system, you know, will obviously be positive.
In terms of the performance of the business, I think, you know, the core connectivity business, you know, remains, you know, a market leader, particularly around data services. So you know, we've been investing in expanding that network. Actually, we, you know, the we have more traffic going through into that business than in Nigeria, as an example. So it's a very big and strong network supporting 50 million subscribers. So the core connectivity business is growing strongly. What is actually pleasing in Iran actually is the Snapp business, the so-called Uber of Iran. I mean, they've got 3 million daily rides in Snapp. Snapp Foods is delivering 250,000 meals per day. Snapp Delivery, another 200,000 plus a day.
The ecosystem effect of Snapp business is actually very impressive. You know, Iran is trapped into this particular structure right now where, because of the JCPOA, it is kind of a ring-fence market. You know, very pleasing growth in that business, on the back of its own network expansion. You know, 4G services. The smartphone penetration in that market is probably across all our markets, you know, leading. I mean, it is well over 80% smartphone penetration within that market. I mean, the business has been well invested and, you know, remains very strong.
Thanks, Ralph. A couple of questions for Tsholo. Is the first one in CapEx. Is the head office CapEx guidance increase to fund fintech growth? If so, should we expect this to rise further in the coming years? First question. The second one's just around U.S. dollar debt deleveraging. I think you did touch on it. Do you intend to repay bonds as they mature, or possibly through tender?
Maybe starting with that one. I mean, our intention is to deleverage the balance sheet, as we indicated. We would like to see the two remaining Eurobonds, 2024 and 2026, reducing to a de minimis balance. It will be subject to market conditions. We will obviously assess how the market reacts, depending on what we have, and we intend to start the process this year, based on, you know, market conditions. I think that's our focus in terms of the Eurobonds. Then, on the other question was on, sorry? I think on the first one.
The other question was on CapEx, the increase in head office CapEx.
Yeah. On whether it has to do with fintech.
Fintech. Yeah.
No, I mean, obviously at this point in time, fintech has not been removed completely. As you have seen, the fintech business CapEx is currently only about ZAR 200 million. As we structurally separate it, fintech business will be a separate entity, which is the work that we're doing now. You will have seen that it's grown from ZAR 80 million last year to ZAR 200 million. It's essentially within the 24% that I spoke about earlier on in terms of 24% of the total capital expenditure.
Thanks, Tsholo. The question on South Africa, could you kindly provide some color, I think this is for you, Ralph, on the strong performance in EBU and SA? Are you making any progress on gaining a greater share of the RT15 tender?
Yeah, I mean, to Wonder, and this team are the entire South Africa team, I mean, tremendous performance. This performance we're seeing now is, you know, as this genesis multi years where, you know, we did reposition the business from being ICT-centric, actually to be connectivity-centric with ICT on top. That's the work that, you know, Wonder and the team have done, very well over the last couple of years. We have been gaining share, you know, in the market, outside of the, so firstly, in the private sector, the SME space, and in the large multinationals. We've been able to get share there. The RT15 contract came into effect last year, and we think we're getting a reasonable share.
That is supporting the growth, but it's not all, only driven by the RT15. It has to do with the multi-year work that we've been seeing. I think now I even forget whether it is nine consecutive quarters.
Mm-hmm.
Of, you know, strong growth from that business when it was in degrowth. It's sustained performance, you know, getting the proposition right. For sure the RT15 is helping, but it's not the only driver of growth.
Thanks, Ralph. I'm just gonna take a moment, Ralph, to turn around to see if any of our in-person guests have any questions, just by show of hands. I won't let it hang for too long. Jay, just wait for a roaming mic, if you will.
It's the first time we've had shareholders in the room for two years.
It's exciting.
Exciting.
I know. It's good to see everyone in person again. Thanks, team, and congrats on the good set of results. Can you just explain the ZAR 3 dividend? I mean, I know the minimum, you know, guidance was ZAR 2.60. How did you get to ZAR 3 then? Then, you know, how is the ZAR 3.30 calculated? How should we think about it?
Yeah, maybe just to you, and Tsholo will top and tail. I mean, as you say, we guided 260 because we thought that in reasonable stress scenario. Last year, remember, there were three stress scenarios we were concerned about. One is COVID uncertainties. We had the Delta variant then, and we weren't sure how that would impact the markets. The second uncertainty that we said was cash upstreaming from Nigeria. The third is progress with ARP. I think both, all three of those uncertainties, you know, have diminished somewhat but not completely disappeared within. You know, we don't know where the next variant will come from and what impact it will have. COVID is not over yet because if you look at Africa, you only got 11% vaccination rates. So let.
We have to assume that, you know, we can be surprised on the COVID side of markets, you know, potentially closing, so we need to have the buffer for that. The second point is, you know, obviously cash upstreaming, we made good progress. As I mentioned, even into the beginning of this year, we're seeing a similar profile where, you know, the taps have not opened on dollar liquidity. We need to also be circumspect around that. Obviously the ARP is a function of how we're able to execute, particularly around IHS. IHS share price very depressed. We're not sellers at the next windows, and if it stays depressed for another year, we'll remain with our shareholding and not sell.
On the basis of those uncertainties and the cash that we have at the group, and having run reasonable shock scenarios, the ZAR 0.300 per share made sense to us, number one. The 330, again, you know, we were able to do shock scenarios that say we, you know, we back ourselves to be able to deliver this in reasonable shock scenarios. I wanna come back to the point that I started with, how best do we allocate capital that the shareholders have given us? As we look at capital allocation and priorities, the best investment for a dollar of capital that we believe at the MTN Group is to invest it in the growth that we're seeing that is structurally higher. We're able to invest that and get a better return.
The second batting order, and we need to make sure that we have resource for that, is to Tsulu's point. We want to really improve the kind of financial risk profile of the group balance sheet. The dollar debt that sits there, you know, it is there, but Tsholo and I would like to have none of it. We put that as priority number two from a capital allocation. When we play the risk scenarios of what can and may not happen, as well as where should we be deploying capital, the ZAR 3.00 and ZAR 3.30 kind of made sense to us. In kind of reasonable shock stress scenarios, we would be able to deliver that. That's why we say it's a minimum of.
If we ever have a super fantastic year of cash upstreaming and all of that, we've committed that the last capital allocation priority we would invoke that, which is our willingness to pay specials. But the uncertainties are still with us, and the world is not a super certain place at the moment, and we must run our business responsibly. We think the ZAR 3 and the ZAR 3.30 absolutely makes sense in current kind of market conditions. Tsulu?
No, I think you've covered everything, Ralph.
Did you not want to pay higher?
I think I'm a lot more conservative than you are.
Yeah, she's more conservative than I am. Yeah.
Sure, thanks. Can I just jump in with one more? On capital structure now. You know, net debt at the Holdco is now down to, I think one times. And you're looking to pay down all the dollar debt. You know, does that mean you deleverage completely, and MTN ends up in some sort of net cash or, you know, ultimate cash position? You know, how should we think about the debt levels within the group?
I'll let the CFO start.
Yeah. I suppose, firstly, I think it's important that we emphasize that we will remain with the guidance at 1.5 times. It's important that we keep the financial flexibility. I think to Ralph's point around capital allocation, you know, we still have a business that's growing, so we want to make sure that we support the business from a growth perspective. Obviously there's a number of issues that, from a risk perspective, that Ralph mentioned around, you know, ability to be able to upstream from markets. Those are the things that we are thinking about.
I think certainly the U.S. dollar debt, if I can put it that way, we would like to extinguish it as much as possible because it does have some risk from an interest rate and Forex losses perspective. The more we can actually reduce it so that we increase the rand-denominated debt, the better. Yeah. We do take into account that we are still in a growth phase.
Mm.
Yeah.
Thanks.
Just checking if there's any more in-person questions at the back there.
Yeah. Thanks a lot for the opportunity. My name is Roy Mutooni from Absa. Is the mic on?
We can hear you, Roy.
Oh, perfect. Okay, cool. Just on the PSB license, maybe if you could just give us a little bit of a rundown on expected milestones or the timeline towards full approval. Also, is it a big leap from where your current business there is with regards to CapEx and operationalizing?
Yeah. I've got Serigne Dioum in the room who, you know, can give you an even better answer than I can. Suffice to say timelines, you know, we have the approval in principle, and that requires us to interact with the CBN and meet certain conditions. We are meeting those conditions and, you know, are quite far progressed. The timeline of moving from AIP to a full license or nothing else, that's subject to the CBN. There is no specific timeline that they work to that says, "We will complete an AIP process by time X." It's not like when the Competition Commission says, "Intermediate merger, we'll do it by 60 days." Here, there isn't a specific timeline towards that.
We have engaged since November, quite extensively, and, you know, from our side, there's nothing outstanding, you know, as we sit. To your point, trying to answer it in short, the PSB is very different from a super agent license because, you know, we are effectively then become a PSB, a payment services bank. So, the float and the wallet economics are with us as a PSB, banking structure, as opposed to, right now a super agent license. We are an agent, and the float would remain always with the banking partners that we have. So the economics of the two businesses are actually quite fundamentally different. You know, I'm looking at Thato here who's saying I mustn't give the thesis here.
I think what we are encouraged with is that we have already leveraged, or at least grown our distribution and got our agents used to taking, you know, naira, as part of that whole process of them, you know, taking naira and giving you know airtime. So that kind of engagement of our distribution channel is well advanced, and you saw the acceleration, particularly in quarter four, where we now have 9 million MoMo subscribers in Nigeria. That's under the super agent license regime. The PSB license regime has got, you know, obviously much better economics for us. We are awaiting the CBN to give us confirmation. There isn't a timeline that they work to.
All right. Okay.
Hello? Hi, Ralph. Hi, it's-
Hi.
Just a quick question. By the way, Mudiwa Gavaza, Business Day, Financial Mail. Because you guys are building platform businesses as part of, you know, the evolution of the business, et cetera, I wanted to check, because as a mobile operator, you guys have always had the advantage of being, you know, a very sort of, cash and liquid business, right? How are you guys thinking about, if at all, you know, subscriptions, simply because a lot of platform businesses are trying to, you know, move towards, you know, software as a business, some type of annuity revenue, some type of subscription, you know, type of models and all of that stuff, you know?
How are you thinking, if at all, or are you okay, you know, with, you know, remaining as a cash sort of, type of operation?
Yeah, I think it's a structure of our markets. I mean, you know, Mudiwa, you can do a Netflix subscription, you know, pay $6-$8 because you have the money. Our business is largely a prepaid business. We're dealing with customers that have largely, you know, limited amounts that they can spend on communication services. As a data point, if you're in the U.S., a telecommunications customer is spending $40-$50 average revenue or ARPU. I mean, we're dealing with $3-$4, maybe up to $5. Our customers are more financially constrained, so we need to deliver services in much smaller chunks than you would in developed markets. From a platform perspective, we see connectivity as a platform, and I think 5G evolution will turn connectivity absolutely into a platform.
Fintech's a platform. The other one that we've spoken about, and you haven't asked questions about it, which I'm surprised, is really what we're doing around our FibreCo. That we see as a platform that evolves over time into an open access model, as you need the levels of investment to meet the data traffic demands that will come with 4G and 5G evolution and so forth. Where we are super focused right now is connectivity, fintech, and Infraco. We have a lot of digital services, but our desire is not to, you know, develop the content. It's very expensive to do that. We leave it to others. We can curate it and, you know, take a margin off that. That's not gonna be a big part of our revenue going forward.
Think of the revenues and the growth of the revenue of the company being core connectivity, fintech, and then the Infraco, the FibreCo business that we said has progressed very well in terms of its own expansion in the last year.
Okay, I think we're gonna have the last question. James, do you have a question?
You can shout it.
Yeah, you can shout. We can hear you. Need it for the broadcast.
Okay. Maybe just on Ethiopia and any plans to, you know, re-explore potentially the third license there.
No, for now, you heard us talk about capital allocation and constraints, and you saw our batting order. The last time there, you know, we looked at it and you know, walked away because we couldn't see our way in terms of the financial investment. We've got our hands full right now, and I think we might be spreading ourselves too thinly at the moment. You know, if the license come, we'll have a look at it, but it's not right up there in our batting order. There's a lot that we have, and we only have 24 hours in a day and only ZAR 34 billion of CapEx. And so this balance sheet has only got ZAR 20 billion of cash.
Yeah, it's right now we have other irons in the fire.
Perfect. Thanks.
Thank you very much. I think we've come to the end of our time. I don't know if you've got any closing remarks, Ralph.
No, just to thank everybody and, you know, on who's dialed in, and lovely to see shareholders actually at 14th Avenue for the first time in two years. We just wanna thank you for your support over what has been a challenging time. We trust that the delivery that we have made in the last year it satisfies you. You know, we continue to be very focused on taking advantage of the growth opportunities that we see in the market. Thanks very much.