Waiting for Telcos at The Nigerian Stock market

The Floor of the Nigerian Stock Exchange

Over three years ago, the House of Representatives Committee on Capital Market resolved that telecommunications and oil firms should be listed on the Stock Exchange. The Federal Government is now pushing to actualise this dream. Will it succeed? LUCAS AJANAKU writes.

When the Co-ordinating Minister of the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala and her Communications Technology counterpart, Mrs Omobola Johnson spoke during a visit to the Nigeria Stock Exchange (NSE), Lagos, they did not conceal their mission.
“We are here today because we believe that this stock market needs to be deepened and broadened and one of the key ways to do that is to get more companies to list.

“Our vision for this stock market is that it must become the premier stock exchange of Africa. We must overtake Johannesburg, even as our economy overtakes that of others and we are hoping that down the line this stock market will do the same,” Dr Okonjo-Iweala said.
Mrs Johnson said the telecoms sector is the fastest growing sector of the economy, adding that it has taken the leadership position in the last five years, growing yearly at an average of between 22 and 23 per cent and contributing 8.5 per cent to the Gross Domestic Product (GDP) as at the second quarter of the year.

“The main reason we are here is to bring more companies unto the stock exchange. The ICT industry contributes 8.5 per cent to GDP; it is the fastest growing sector of the economy and we need to ensure that companies in the sector are listed. It is therefore appropriate that many more Nigerians should benefit from this success through the increased public ownership of these companies. That will happen when they are listed on the stock exchange,” she said, stressing that efforts had gone beyond just calls for more companies to be listed to collaboration.
The ministers pledged the government’s support to the NSE and the Securities and Exchange Commission (SEC) as it moves to deepen the market.
Twelve years after the liberalisation of the telecoms sector, the subscriber base has crossed the 100 million mark while most of the telcos have been smiling to the banks, repatriating billions of dollars yearly as profit.
Though some of the telcos have moved close to indigenising the brand by appointing Nigerians as chief executive officers, sector analysts argue that listing on the NSE will further strengthen the people’s confidence in the telcos.
Chief Executive Officer (CEO), Teledon International Group, Dr Emmanuel Ekuwem, said the time had come for the telcos to list on the NSE. According to him, when he was national president of the Association of Telecoms Companies of Nigeria (ATCON), getting the telcos listed was one point he raised.

“The big telcos, MTN, Etisalat, Glo and Airtel should be listed on the NSE. They are big enough. They are generating a lot of revenue. They should become proper Nigerian entities so that Nigerians, who desire can own shares in them. When their public offer is out, people can buy their shares. 

When they have annual general meetings, management will account for their stewardship. The move will popularise them rather than victimise them. It will make them open to Nigerians so that if there is any subscriber that has the financial muscle to participate, such a subscriber will buy shares and bring a lot of capital onboard. They keep talking about going abroad or going to banks to source $2 billion, $3 billion to expand their networks. When they do public offer, they will have a lot of capital because of the shares that people will buy. That will give them the financial muscle to expand their network and improve on the quality of service as well as popularise them as Nigerians will now have a sense of ownnership of these companies,” he said.

He added that listing will also enhance the institutionalisation of corporate governance which will bring about transparency and accountability.
The telcos, he said, would be reluctant to list, arguing that when the necessary regulatory framework is in place, the telcos will fall in line.
President, National Association of Telecoms Subscribers (NATCOMS) Chief Adeolu Ogunbanjo, agrees with the former ATCON boss. According to him, if the telcos get listed, the issue of vandalism will become a thing of the past as the subscribers will see the infrastructure as their own. “The telcos will be able to raise money from the public to finance network expansion and improve services. People will be prepared to allow the erection of BTS in their homes and offices. There will be a sense of belonging by Nigerians who will jealously guard the infrastructure,” he said.
All the operators except Glo are listed on the stock exchange of their home countries.

MTN Nigeria
Board Chairman: Dr Pascal Dozie
CEO: Michael Ipkoki
Subscribers: 55, 238,430 million
MTN Group is a South Africa-based multinational mobile telecommunications company, operating in many African, European and Middle Eastern countries. Its head office is in Johannesburg and it is listed on Johannesburg Stock Exchange (JSE).

Globacom Limited
Board Chairman: Dr Mike Adenuga
CEO: Jameel Mohammed
Subscriber base: 25,019,862 million
Globacom Limited is a Nigerian multinational telecommunications company headquartered in Lagos. The firm is a privately owned telecommunications carrier that started operations on August 29, 2003.
Since then, there is no record of the telco going to source funds from any bank both onshore and offshore.
About four years ago, the firm single-handedly funded a submarine cable, Glo 1, at $800million. It recently signed a network modernisation with two Chinese quipment vendors, ZTE and Huawei worth $1.25billion. It also operates in Ghana, Republic of Benin and Cote d’Ivoire.

Airtel Nigeria
Board Chairman: Oba Otudeko
CEO: Segun Ogunsanya
Subscriber: 21, 591,904 million
Bharti Airtel Limited, popularly known as Airtel, is an Indian multinational telecoms services company with headquarters in New Delhi, India. It operates in 20 countries across South Asia, Africa, and the Channel Islands. Airtel has GSM network in all countries in which it operates, providing 2G, 3G, (3.75G in Nigeria) and 4G services depending upon the country of operation. It is reputed to be the world’s fourth largest mobile telecommunications company by subscribers with over 275 million subscribers across 20 countries as of July, this year. It is the largest cellular service provider in India, with 191.39 million subscribers as of last month. Airtel is the third largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.
Airtel is credited with pioneering the business strategy of outsourcing all of its business operations except marketing, sales and finance and building the ‘minutes factory’ model of low cost and high volumes. The strategy has since been copied by several operators.
Aside Nigeria, it operates in 16 other African countries, namely Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Rwanda, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.
It is listed on the floor of both the National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Emirates Telecommunications Corporation (Etisalat Nigeria)
Board Chairman: Hakeem Belo-Osagie
CEO: Steven Evans
Subscribers: 15,303,647million
Emirates Telecommunications Corporation, branded trade name Etisalat is a United Arab Emirates (UAE) – based telecommunications services provider, operating in 18 countries across Asia, the Middle East and Africa. As of February, last year, Etisalat was the 15th largest mobile network operator in the world, with a total customer base of more than 135 million and was named the most powerful company in the UAE by Forbes Middle East last year.
Etisalat International Investments is the business unit of Etisalat that operates outside the UAE and manages the firm’s stakes in telecommunications carriers in Nigeria, Afghanistan, Benin, Burkina Faso, the Central African Republic, Gabon, India, Indonesia, Iran, the Ivory Coast, Egypt, Niger, Saudi Arabia, Sudan, Tanzania, Togo, Sri Lanka and Pakistan.
The International Investments unit also manages Etisalat’s minor stakes in other telecommunications services providers, such as Sudatel (a mobile, fixed and Internet services provider in Sudan), and Qtel (Qatar-based telecoms services provider).
It is listed in the UAE Stock Exchange.
“Any of these telcos that braves the odds and be the first to get listed on NSE will attract the attention of subscribers who will naturally see it as truly a Nigerian brand,” Ogunbanjo said.

Via The Nation
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