MTN Nigeria IPO Done by Year-End If Market Allows, CEO Says

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MTN Annual Results at their head office in Johannesburg on Thursday, March 8 2018. CEO,Rob Shuter spoke at the announcement of the results along with CFO, Ralph Mupita. Pic: Waldo Swiegers / Bloomberg
  • Mobile-phone carrier earlier expected completion by mid-2018
  • Company’s planned IPO in Ghana ‘well advanced’: Shuter
  • CEO says more details on Nigeria IPO in next months
  • MTN eyes mobile services to boost margins
  • Forms partnership with Ecobank for Africa
  • Aims to triple mobile service users, fend off competition (Adds telecoms regulator and central bank MoU)

MTN Group Ltd. expects the listing of its Nigerian unit on the Lagos stock exchange to be done by the end of 2018, its CEO said, after suggesting in November that the process would be concluded by mid-year.

“We are progressing very well with the Nigerian listing and if market conditions are appropriate, we will conclude that by the end of the year,” Rob Shuter said Tuesday in an interview in Lagos. He declined to provide more details on the process.

MTN agreed to the Nigerian Stock Exchange initial public offering as part of the settlement of a $1 billion fine imposed by local regulators in 2015. Africa’s biggest wireless operator by sales incurred the penalty after missing a deadline to disconnect unregistered subscribers amid a security crackdown in the West African country. Nigeria is the largest of the company’s 22 markets across Africa and the Middle East.

MTN is planning to raise at least $500 million from the sale of shares, people familiar with the preparations for the listing said. The company could dispose of as much as 30 percent of its Lagos-based unit, the people, who asked not to be identified as the details aren’t public, said in February.

MTN is also preparing to list a 35 percent stake of its local unit in regional neighbour Ghana, part of a deal with the government to use fourth-generation spectrum, a high-speed mobile data service.

“The Ghana IPO is well advanced,” Shuter said, declining to provide details. “We will make the specific announcement of that in accordance with the IPO schedule.”

MTN is targeting close to $800 million dollars with the listing, which would be more than 10 times bigger than the country’s largest IPO to date, people familiar with the matter said in March.

He added the South African telecoms group was targeting 60 million customers via mobile services over the next three years, up from 23 million now across the 14 markets where it has launched the product.

MTN and Ecobank’s agreement on a mobile banking partnership came on the heels of an announcement by Kenya’s top three telecom companies on Friday to offer cross-network money transfers by mobile phone.

In a separate development, the Nigerian Communications Commission (NCC) – the telecoms regulator – said on Tuesday it had signed a memorandum of understanding with the central bank to boost the use of mobile banking.

Godwin Emefiele, the central bank governor, said the aim was “to produce a payment system in Nigeria, reducing cash transaction and enhancing cashless operations”. He said the target was to ensure 80 percent of Nigerians had access to financial services by 2020 compared with 40 percent now.

In Nigeria MTN’s rival, investment holding company Teleology, has partnered with East Africa’s largest telecoms operator Safaricom to offer mobile services. Teleology Holdings agreed in March to buy 9mobile, Nigeria’s fourth largest telecoms provider.

Shuter, a former Vodafone European head, who became MTN’s chief executive last year, has a background in banking, and is looking for new revenue streams as competition and regulation hit profit margins.

Shuter said MTN was building its mobile services business, which is an important part of its digital growth strategy, and it saw a lot of common ground with commercial banks.

“Ecobank has very similar aspirations to us,” he said.

Ecobank, which operates in 36 African countries, has said it expects its digital banking platform to boost its customers to 100 million from 13 million by 2020 and that it will focus expansion on existing markets via low cost mobile services to tap customers on lower incomes.

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Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

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