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 Global Credit Rating, among other issues. Nosa Alekhuogie presents the excerpts:

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.

Nigeria missed out on the 80 per cent goal target for financial inclusion in 2020. What’s your long-term view of how the telcos can contribute to towards achieving the next target?

We have a large distribution network and the way we can contribute is by assisting the financial ecosystem to tap into the unbanked. A positive outcome we discovered is that the inclusion of the unbanked into financial services actually accelerates the growth of the deposit money banks and that’s something we’ve seen across all the markets where mobile money has been accelerated. Nigeria is making great strides on its financial inclusion drive and we have a role to play in terms of FinTech and digitisation of access to banking services. Our country is indicatively on the global forefront for financial inclusion, so I believe the federal government’s policies and the deposit money banks have done well in terms of developing channels such as USSD and mobile apps to mention a few. Of course, we want to play a part to support the Central Bank and will be happy doing so when invited.

What is the outlook for MTN Nigeria for the rest of 2021?

As we venture out of the COVID pandemic, we are happy to support the entire nation’s business, individuals, families, in being able to communicate during periods of restricted movements. We remain optimistic about the long-term outlook in Nigeria and are focused on improved customer service as we continue to accelerate our capacity and infrastructure to support that. MTN Nigeria remains a critical part of the MTN Group. We are proud to be on the African Continent and also proud to stay in Nigeria.