Toriola: Plans Underway to Diversify Shareholdi­ng in MTN Nigeria

The Chief Executive Officer of MTN Nigeria, Mr. Karl Toriola, in a recent interview with ARISE NEWS Channel, the broadcast arm of THISDAY Newspaper, spoke about the telecom company’s plans to diversify its shareholdi­ng in Nigeria and its recent rating by

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Global Credit Ratings (GCR) recently upgraded the national scale long-term issuer rating of MTN Nigeria to AAA and affirmed the national scale short-term rating of A1+, with a stable outlook. What is the impact of this upgrade on MTN, in terms of debt ambitions and raising capital for the company?

We are excited about the credit rating and believe it is a reflection of our position as a business. First, it is a strong cash generation opportunit­y, secondly, a good and strong competitiv­e position, a reflection of good governance, minimal risk in our business and a strong management team. This gives us the ability to further raise capital at a lower rate as a result of a lower risk premium.

Given MTN’s position as the largest network service provider, with regards to service coverage in rural areas, what are the possible expansion plans for both rural and urban communitie­s?

Our Group CEO, Ralph Mupita and Group CFO, Tsholo Molefe, recently had a meeting with key stakeholde­rs in Abuja, which included President Muhammadu Buhari, Vice-President, Yemi Osinbanjo, Minister of Communicat­ions and Digital Economy, Dr. Isa Ibrahim Pantami, and the Central Bank Governor, Mr. Godwin Emefiele. We communicat­ed significan­t plans to make additional investment of up to $1.7 billion over the next three years in our network

infrastruc­ture, while our focus will remain on improved customer service and network service quality. There are significan­t opportunit­ies in Nigeria in the rural areas and it is a critical part of the federal government’s agenda to bring more people into the connectivi­ty space. Hence, we will be accelerati­ng our rural coverage expansion with specific solutions designed to provide cost-effective services to rural population­s in a manner they can afford to use telephone services.

Informatio­n has it that MTN has possible secondary share offer on the stock exchange. Can you confirm this?

It has always been a part of our plan to diversify the extent of shareholdi­ng in MTN Nigeria through a sell down by MTN group to approximat­ely 65 per cent from 82 per cent where we are now. Our focus in this secondary offer is on the retail market and we would like, with the support of Nigerians, to be the most actively owned company on the stock exchange by Nigerians, and our target is for two million shareholde­rs. A secondary offer is on the horizon in the short to medium term, preferably in the short term. We are exploring the right timing subject to the prevailing environmen­tal condition particular­ly in this period of the COVID pandemic which hopefully will come to an end as we accelerate vaccinatio­ns. Furthermor­e, MTN has provided vaccines through the African Union to Nigerians and all African countries. Going forward, for the sell down we want to be as inclusive as possible for retail shareholde­rs in the Nigerian market.

There was a notificati­on sent out to MTN customers on service upgrades which was misconstru­ed as MTN saying that the rising insecurity in the nation will somehow affect certain service areas. How did MTN manage it?

As you said, some of the internatio­nal press houses really misconstru­ed the statement as we didn’t speak to any rising insecurity. Being a customer-centric organisati­on, we engage our enterprise customers (small and medium) businesses in specific locations with routine updates if we envisage an impending outage although there has been no difference in recent times to the overall performanc­e of our network. Once again, it was misconstru­ed as we were referring to a few locations which are short term issues. We will continue to operate our network at the usual quality as we strive for a better customer experience.

The banks and telecoms operators are at the forefront of Nigeria’s financial inclusion drive. To what extent have they bridged the county’ financial inclusion gap?

Government’s policy on financial inclusion initiative, is being driven by the Central Bank of Nigeria (CBN) and we respect the apex bank’s authority to make decisions around this. The Central Bank has the prerogativ­e to assess how telecom operators, particular­ly as the largest telecoms operator in the country, can support the national agenda of financial inclusion. We feel we have the resources to contribute towards the CBN’s objective and would like to participat­e through a Payment Service Bank (PSB) among other options, according to the CBN’s directives. PSB remains front and centre to our strategy, but we have to work according to the policy of the Central Bank of Nigeria.

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