African Telcos: Shareholder returns to accelerate

Research evidence excerpt

African Telcos: Shareholder returns to accelerate

24 June 2026

African Telcos EquitiesDiversified

Telecommunications

Shareholder returns to accelerate Africa

◆ We see African Telcos sustaining growth momentum in 2026- Madhvendra Singh*, CFA

27e, driven by c12% organic growth in sector, led by MTN Senior Analyst, TMT HSBC Bank Middle East Limited, DIFC

madhvendra.singh@hsbc.com

◆ See solid shareholder return growth potential for African +971 450 93348

Telcos, led by Vodacom, MTN, Safaricom, and TKG Ali Naqvi*

Senior Global TMT Analyst

HSBC Bank Middle East Limited, DIFC

◆ Prefer MTN on high growth, attractive valuation; upgrade ali.naqvi@hsbc.com

VOD, TKG to Buy for better risk-reward, returns outlook +44 20 7992 2176

MTN remains our preferred stock in Africa for the following reasons: (1) MTN is * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations

likely to lead growth charts: EBITDA CAGR of c24% in 2025-27e, ahead of peers

(Africa/wider sector) driven by continued strong growth in Nigeria and Ghana while

recovery (albeit slow) in SA will help. Wider African markets are also likely to grow well

with Uganda recovery and continued good performance in West Africa. Despite ZAR

strength, we see adjusted HEPS growing c36% in 2026 to ZAR18.46 and c29% in 2027

to ZAR23.84. (2) We expect fast shareholder returns growth in 2026-27e as FCF

recovers, helped by Nigeria dividend ramp-up and low net leverage (0.1x net debt-to-

EBITDA ex-leases). Share buybacks also provide support. (3) IHS deal is a major

strategic course correction and we expect will be immediately EPS accretive and boost

visibility/scalability and return of operating leverage. We see this as a superior tool for

cash upstreaming from OpCos.