MTN Nigeria is a profitable venture, a beautiful bride. For any investor, the outlook for the Nigerian registered trade name of the South Africa Group presents the prospects of a good business. And it is a good business. Since arriving in Nigeria after the yet-to-be rivalled digital mobile auction conducted by the Nigerian telecom regulator, Nigerian Communications Commission (NCC), MTN has declared hefty profits; engaged in massive corporate social responsibilities especially in healthcare and has from records at the tax office paid its taxes to the Nigerian treasury.
Since 2001 when it rolled out its services in the mobile telephony genre alongside others, it has remained bullish, commanding the best share of the market all thanks to the marketing ingenuity of its foundation staff. Perhaps it’s safe to say that MTN believed more in the Nigerian market than any of its contemporaries. It sowed big, invested big in network expansion and was the first to scour the expansive Nigerian landscape with its signal. This early head-start has kept MTN at the cutting edge of the competition. Yellow suddenly became the colour of telecom services in a country long starved of such digital communication services. Everywhere you go, there is at least a bar to keep you connected. So, it was no surprise that it creamed off the subscriber market boasting a huge churn from its early days till this day.
Yet, in spite of its success and despite reaping real fortune in the Nigerian market, it behaved for much of the time like a venture capitalist blob, or in some way like an unwilling wife in a forced marriage; unsettled and unwilling to commit all. Yes, MTN had invested humungous sum to build its network and rack up its profit profile but there was something else Nigerians desired the telco to do: get listed on the Nigerian Stock Exchange (NSE). In my over two decades of reporting and over-sighting the telecom ecosystem, nothing has excited Nigerians more than a whiff of news that MTN is to go public. And you don’t blame Nigerians. For a people scammed by stock market mandarins and grifters in the national wave of stock listings of the past decade, MTN is seen as a worthy and sustainable investment.
It was therefore a soothing sonata in a long night of awful music when news filtered into town that MTN Nigeria has at last listed on the NSE. Not many grabbed the import and impact of this milestone. First, MTN is beyond a recharge card plus SIM card company. It has established strong foothold in the nation’s financial bourse, in national data and identity management. And with a commanding share of the telecom market, it exerts a huge influence on national security. Aside the security apparatchik of any country, the next major influencer in any nation’s security architecture and management are the ICT companies. China’s Huawei and ZTE have run into various storms across Europe, United States and other parts of the world for fear they might be doing or has the capacity to engage in espionage. The US government of Donald Trump has frontally accused Huawei of trying to upstage and likely to undermine the security of the US with its light-years-ahead 5G technology. Huawei denies the allegation but the impasse remains largely unresolved. Trump at the moment is trying to recruit adherents across Europe to stop Huawei. Whether the allegation is true or false about Huawei and US security, the inference strongly underscores the capacity of any ICT company to influence national securities across the globe.
Aside security, patriotism and national interest are at the core of most decisions that influence the treatment of multinationals in their countries of operation. In some cases, no multinational is allowed to set up shop in a foreign country without the country exacting maximal benefits from the company on the basis of national interest. Such benefit may include listing on the local Exchange, employing a certain percentage of locals by the foreign company among others.
In recent years, our West African neighbour Ghana, apparently worried by the growing businesses and influence of Nigerians conjured a policy targeted at compelling Nigerians to employ a certain percentage of Ghanaians in their businesses. This is not because the government of Ghana hates Nigerians. No! It is simply driven by the principle of enlightened self-interest, in this case, national interest. The government of Ghana is simply asking the question ‘what’s in it for our people?’. Ghana wants Nigerian businesses in its domain to grow and bloom but it must not be at the expense of Ghanaian publics. That’s how people-centric governments behave in the emergent ‘glocalised’ economy.
Herein is why the listing of MTN Nigeria at the NSE is a win-win for the telco and for Nigerians. It is a testament to the patriotic and nationalistic fervour of the Nigerian telecom regulator, NCC. And credit must go to Professor Umar Danbatta, the Executive Vice Chairman of the NCC, who smartly inserted listing at the NSE as one of the conditions pursuant to MTN’s liquidation of its downwardly reviewed fine. The NCC had on October 20, 2015 slammed a hefty fine of N1.04 trillion on MTN for infraction bordering on activation of non-registered SIM cards. In a rare act of good faith, the fine was grossly reduced to N330 billion and MTN was handed a phased payment plan with a caveat to list at the stock exchange not later than May 2019. And that did the magic. MTN Nigeria has just listed pumping market volume by 20.4 billion units of ordinary shares of its existing shareholders. The telco is yet to issue fresh shares for public purchase. It means those desiring a cut into the MTN pie would have to purchase shares from existing shareholders on the floor of the NSE or via brokerage firms. It is a good place to start.
If you think this is no feat, consider how much the nation has lost over the years through poorly scripted and myopically contrived Joint Venture (JV) cash call agreements entered into with oil majors. The poor stringing of such agreements makes Nigeria more or less a junior partner in a business that it should clearly play a dominant role and by extension receive the fattest chunk of the profits. This is why the MTN-NCC case more than thrills. It excites. Professor Danbatta and his team saw an opportunity and smartly exploited it. It is a template worthy of duplication in other sectors and transactions where Nigeria has been shortchanged on account of poor thinking and indifference by representatives of the country.
Now listed, MTN should consider an Initial Public Offer (IPO) that would see more Nigerians take ownership of the Yellow brand. Aside stacking up more funds for network expansion in the unfolding broadband era, it will confer a sense of ownership of the company on Nigerians. This has the implicit advantage of protection of all that pertains to MTN Nigeria including its infrastructure by Nigerians. Traditionally, we have a culture of ‘protecting our own’ and that should include MTN Nigeria.
