Although it is not the first entrant among the main telecom companies that dominate the country’s seamless communication space, MTN Nigeria Communications Plc has certainly remained strong and steady in the market. It has been offering excellent services to its almost 70 million subscribers for two decades. Since its launch in August 2001, MTN has steadily deployed its services across Nigeria. It now provides services in 223 cities and towns, more than 10,000 villages and communities and an increasing number of highways across the country.
MTN Nigeria is part of the MTN Group, Africa’s leading cellular telecommunications company that started off as M-Cell in South Africa.
It paid $285 million for one of four GSM licenses in Nigeria in January 2001. On May 16, 2001, MTN became the first GSM network to make a call following the globally lauded Nigerian GSM auction conducted by the Nigerian Communications Commission (NCC) earlier that year. After that, the company launched full commercial operations beginning with Lagos, Abuja and Port Harcourt.
To date, it has invested more than $1.8 billion building mobile telecommunications infrastructure in Nigeria. Its digital microwave transmission backbone, the 3,400 km Y’elloBahn, was commissioned by President Olusegun Obasanjo in January 2003 and reputed to be the most extensive digital microwave transmission infrastructure in Africa. It operates on the core brand values of leadership, relationship, integrity, innovation and can-do, as it also prides itself on its ability to make the impossible possible, connecting people with friends, family and opportunities.
It has also expanded its network capacity to include a new numbering range with the prefix 0806, making MTN the first GSM network in Nigeria to have adopted an additional numbering system, having exhausted its initial subscriber numbering range – 0803. In its resolve to enhance quality customer service, it introduced a self-help toll-free 181 customer-care line through which subscribers can resolve their frequently asked questions at no cost.
Its mission is to be a catalyst for Nigeria’s economic growth and development, helping to unleash Nigeria’s strong developmental potential not only through the provision of world class communications, but also through innovative and sustainable corporate social responsibility initiatives.
When MTN managed to get a foothold in Nigeria, it expected good business but could not have imagined it would become the country’s largest listed company in two decades. One year after MTN opened its mobile phone operation in Nigeria in 2001, it reported it had reached a milestone – with just over 500,000 subscribers on its network, but nearly two decades later, it has nearly 70million subscribers.
The company admitted that early projections in both South Africa and in other markets, particularly Nigeria, were well off-target as no one had any idea what the size of the market would be for the new technology.
MTN’s evolution from a good idea into a multibillion-dollar company in less than two decades is the stuff of corporate legend. In 20 years it has become one of Africa’s top multinational companies in an industry that has revolutionized the African continent and beyond.
Nigeria is its biggest market, accounting for nearly a third of its annual core profit. After seeing spectacular growth in South Africa in its early years, the company started expanding into other African markets in 1998, starting with Rwanda, Uganda and Swaziland. But Nigeria was considered the big prize right from the start, given its population, then estimated at 160million, and the poor state of its limited landline infrastructure and services. Originally, it estimated that it will have 10million subscribers in five years, but ended up at 32million. The size of the informal market in Nigeria foxed the forecasters, who relied on official statistics from the IMF, World Bank and the likes to inform business plans.
Over the years, MTN has ploughed billions of dollars of investment into Nigeria to keep up with the ever-growing demand. In 2020, it announced a three-year capital investment program of $1.6billion to strengthen and expand its network and operations in the country. It is committed to expanding the 4G network from the existing 40 percent coverage. It has also got the nod from the central bank to move into the digital financial services space.
Despite its rocky ride with the authorities, in the past, over allegations of tax evasion and irregular repatriation of dividends, the company has stayed its focus. Though the issues were resolved through negotiation, analysts believe the perceived government harassment of one of Nigeria’s biggest investors tainted the country’s investment profile.
The settlement that fined MTN $5.1billion for its failure to disconnect users with unregistered SIM cards, also require it to undertake its long-promised listing on the Nigerian Stock Exchange. Nigerian investors hold about 20 percent of its shares, with MTN retaining 78.8 percent, and other investors holding 1.8 percent. The telecom giant recorded 390.3 billion naira profitin the first half of 2021.
According to the Chief Executive Officer, MTN Nigeria, Karl Toriola, “In the first half of 2021, we made good progress, strengthening the resilience of the business, managing the impact of the COVID-19 pandemic and enhancing support to our people, customers and other stakeholders”. Thecompanyextended its commitment to the Coalition Against COVID-19 (CACOVID) with an additional 3 billion naira contribution over a two-year period, half of which has already been paid”. This is in support of MTN’s efforts to promote the health and security of Nigerians, as the country navigates its way through the pandemic; and in line with the Y’ello Hope initiatives through which it provided support to its broad base of stakeholders to the value of approximately N25 billion in 2020.
The company’s progress towards achieving greater business resilience is reflected in the upgrade by Global Credit Ratings (GCR) of its national scale long-term issuer rating to AAA, and affirmation of its national scale short-term rating of A1plus stable outlook. This puts MTN Nigeria on the highest possible GCR scale for short-term and long-term ratings, providing a solid platform for growth.
2021 marks the 20th anniversary of MTN’s presence in Nigeria. “As we celebrate this milestone”, Karl Toriola enthused, “we are pleased to announce that our Board of Directors has approved our participation in the Road Infrastructure Tax Credit (RITC) Scheme”. Its participation in the scheme is in response to the federal government’s drive towards public-private partnerships in the rehabilitation of critical road infrastructure in Nigeria. “We intend to participate in the restoration and refurbishment of the Enugu-Onitsha Expressway. Conversations in this regard have already commenced and further announcements will be made in due course”, Toriola said.
In line with its desire to plant deeper and more permanent roots in Nigeria, MTN has also initiated plans to commission a purpose-built, state of the art MTN Head Office, designed to act as a central hub for its network, a catalyst for creativity and innovation, and a showcase for the flexible working structures that are driving efficiency gains in this new working environment. Aligned with its wider commitment to environmental sustainability, it continues to meet the highest global environmental standards, demonstrating the role of green technology in our future.
Following its stated intention to sell up to 14 percent of its investment in MTN Nigeria over the medium-term, MTN Nigeria’s shareholders approved an equity shelf program at its last Annual General Meeting. This will facilitate increased ownership of the company by more Nigerian retail and institutional investors. And it will alsofurther localize the predominantly Nigerian management team with the appointment of additional Nigerians to key senior positions, like Chief Marketing Officer and Chief Information Officer, presently held by expatriates.
MTN Nigeria continues to invest in improved world class services and network, accelerating the expansion of its 4G coverage and providing home broadband. As part of its rural connectivity program, it plans to connect approximately 1,000 rural communities to its network this year and an additional 2,000 communities in 2022. These are translating into stronger operational performance in line with the objectives of Ambition 2025.
In the next 3 years, MTN will invest over N600 billion to expand broadband access across the country in support of the government’s Broadband Plan. Toriola said, “Operationally, our mobile subscribers closed H1 at 68.9 million, down 9.9 percent from December 2020.
This decrease from 2020 was due to the regulatory restrictions on new SIM sales and activations, which was lifted on April 19, 2021. “Although the initial run-rate of additions has been slower than usual due to new process requirements, we anticipate growth to normalize in the short-term as more of our acquisition centers are certified for SIM registration”, he said.
The Board of Directors of MTN Nigeria has approved an interim dividend of N4.55 kobo per share to be paid out of distributable net income. This represents a growth of 30 per cent over N3.50 kobo per share paid in H1 2020.”