MTN LISTING: The dawn of a new epoch
Africa’s leading cellular telecommunications company, and the first GSM network to make a call in Nigeria, MTN Nigeria, has just been recently listed on the Nigerian Stock Exchange (NSE). The telco, since its launch in August 2001, provides services in 223 cities and towns, more than 10,000 villages and communities and, a growing number of highways across the country; spanning the 36 states of Nigeria and the Federal Capital Territory, Abuja.
The company has 50.4% of the market space, with 58.1 million subscribers as at the fourth quarter of 2018. Amounting to the obvious that the telecoms giant porting from a private company to a public liability company ahead of its listing on the exchange, and its eventual listing, is a good development for investors in the Nigerian market.
In Tanzania for example, Vodacom listed 25% of its business on the Dar es Salaam Stock Exchange; MTN Ghana launched its initial public offering (IPO) to raise GH¢3.47 billion for Ghanaians to own 35 per cent of the company’s shares – in order to obtain a 15-year 4G license; MTN Nigeria, despite the 2015 infraction and the company’s embroilment in a number of scandals, including failure to duly register its subscribers as required by the law, alleged illegal repatriation of funds, and unpaid back taxes. Word on the street is Listing on the NSE is a way to resolve the N330 billion fine placed on the telco by the Nigerian Communications Commission (NCC) for its inability to disconnect improperly registered SIM cards, listing on the NSE was one of the conditions reached.
In the short to medium term, the listing on the NSE would create a new telecoms asset class for investors and provide a wider group of Nigerians with a chance to participate in MTN investment opportunity. In the long term, it is expected that this further supports foreign interest in the Nigerian equity space.
Interestingly, MTN Nigeria remains a growth story in the Nigerian economy, given the room for improvement in mobile penetration (increased from 53% in 2016 to 84% in 2018) and internet usage across the rapidly growing population (Internet users increased to more than 111.6 million as at December 2018). We believe this is the dawn of a new epoch for the telecommunication sector, as this will help improve the firm’s financial flexibility, capital structure and could potentially support a better relationship with its regulator (NCC).
The epoch wont only empower a larger pool of Nigerians to attain ownership of the company, but would also help deepen the market, improve wider sector diversity, encourage further listings by other telecoms companies, and eventually make the equity market a better representation of the wider economy.
Considering the number of stakeholders that would be interested in buying into the telco’s IPO, InfoWARE alongside the exchange and other stakeholders are working towards leveraging technology to birth innovative trading activities to ensure that the process for retail investors to invest is extremely seamless and stress-free.
This technology initiative also includes - an interactive platform for investment enthusiasts who want to explore real-time market data to virtually invest and place trades in an ever-expanding variety of investment options leveraging Robo-Advisory -instructions, market data, top investors and watch lists.
GrowMyKudi, will seek to educate retail investors, most especially, about 98% of Nigerians who do not invest in neither the capital nor money market.