MTN Targets Double-Digit Sales Growth from Nigeria

March 12, 2018

By Modupe Gbadeyanka

Africa’s biggest mobile phone operator, MTN Group, has expressed its intention to double its sales in Nigeria as it plans to review its operations in all 22 of its markets across Africa and the Middle East.

MTN’s Chief Financial Officer, Mr Ralph Mupita, disclosed in an interview last Thursday that it has no plan to leave Nigeria, its biggest market, despite having run-ins with the Nigerian government, which led to it being fined $1 billion for missing a deadline to disconnect unregistered users.

The telco said it expects double-digit Nigeria sales growth in the medium term, above an overall average of high-single digits, as economic conditions improve and it gains subscribers from troubled competitors.

To achieve this, MTN is planning use spectrum gained from its acquisition of Visafone in 2016 and talks are ongoing with the nation’s regulatory agency on achieving this.

“Our strategy is to grow our network and we need all the spectrum we can,” Mr Mupita disclosed in the interview.

Also, MTN is planning to list its $500 million shares on the floor of the Nigerian Stock Exchange (NSE).

However, MTN said it won’t invest in countries it classes as “conflict markets” like Yemen, Syria, Afghanistan and South Sudan, which means the local units have to be self-funding to stay in business.

The company will take “appropriate action” if any of them are not cash-flow positive.

“If the markets are able to return to a non-conflict situation they could be attractive to us,” Mupita said. “Syria, for instance, was one of our top ten markets not so long ago.”

According to the Johannesburg-based firm, it is struggling to repatriate cash that’s been stuck in Iran, one of its top three markets.

This is as a result of former US and UK sanctions. The carrier has managed to repatriate about R6.5bn to date and is in talks with the central bank to move another R5bn later this year.

“They are prioritising foreign-exchange allocation to primary industries such as food goods at the moment,” said Mupita.

MTN is in a dispute with regulatory authorities in Benin on frequency fees, which it says are too high. “While we are fighting hard to stay in that market, economic sense need to prevail,” the Chief Financial Officer said further.

In Cameroon, MTN received a $6.6m fine and a one-year reduction in its license term for allegedly not complying with spectrum and subscriber registration regulations. The company was also ordered to disconnect 3 million subscribers.

“It’s a big priority to resolve this in the near term,” Mupita said. “If it’s not resolvable, then it’s not resolvable. We want to find an amicable resolution to stay.”

In the new markets, Angola plans to sell a minority stake in a state-owned telecommunications provider and hold an auction for a fourth industry operator in 2018.

“We will certainly look at Angola and also Ethiopia if it opened up for a license. There are a couple of countries in West Africa that we could look at, like Togo and Senegal,” the CFO said.

In Ghana, MTN has agreed to sell shares in its local unit to Ghanaian investors in exchange for a 4G license.

“The primary objective is not to monetise, but to comply with regulatory requirements for the 4G license,” said Mr Mupita.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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