Follow Us on Google
By Chinenye Anuforo [email protected]
The MTN Media Innovation Programme (MIP) Cohort 2 Fellows recently engaged in an enlightening session with Karl Toriola, CEO, MTN Nigeria.
The meeting held in the CEO’s boardroom and served as a platform for candid exchange of ideas and insights that shed light on a spectrum of crucial topics, ranging from the MTN Foundation’s initiatives to the network’s quality of service, shareholders’ dividend payments and the future of the telecommunications industry.
Toriola spoke extensively about MTN’s commitment to national priorities through the MTN Foundation. Excerpts:
What is the rationale behind the MTN Nigeria Media Innovation Programme (MTN MIP)?
The MTN Nigeria MIP is a brainchild of a few people among us and I think it is a brilliant idea that we put together. Why do we do this? We do this because we thought that the vibrant press media community in Nigeria is instrumental to giving the public a clear and balanced view of our industry and the better informed the press and the media are, the more we can keep the balanced view on what’s happening in our industry, how we are progressing, challenges and so on. Having designed this, and used a huge chunk of our budget for this programme, I am very proud of corporate services team for putting this together and really, it has become somewhat a shining light of how we should work with and manage the media in MTN. We don’t expect you to give us soft landing as MTN but just a fair view and an opportunity to express our views, because the media must remain independent, for the better informed they are, the better they can provide a balance report. So, judge us purely on our merits. We don’t ask any favors. I understand that this media innovation programme has become the hot thing in the media industry, and there’s a lot of interest and competition. So, we hope and aspire as long as our budget allows us to continue doing this on and on in the future.
How has it been doing business in Nigeria?
Not just to MTN Nigeria, we all know that it is a difficult operating environment. It’s not just businesses, individuals are under significant inflationary and fuel price pressure. We released our half year results recently, while we grew as one of the few industries under pressure from exchange rates, we still extremely remain enthused and excited about the opportunities that the biggest economy and largest population in this continent offers. And what is making us excited? A number of things; demographics of the country, an opportunity for change in the direction of the economy, the youthful, intrapreneurial population that we have in every part of this country, and the opportunities that technology and financial services offers to help transform Nigeria.
What is the status of MTN 5G in Nigeria?
We were one of the two successful bidders for the 5G spectrum and we were the first to launch. We rolled out 5G in seven cities initially and later expanded to 13 and, by the end of the year, we are expanding to eight more cities. We are really excited with potential of 5G technology because of the extremely high speeds, low latency which makes a lot more use cases of 5G possible, which are not possible with any other technologies. Gradually , we will take this technology to as many Nigerians as possible. As you know, this rollout is gradual, we started with using 2G technology and now, we are talking of much higher technology and this needs a lot of investments. So, in the same way we have done others, we are going to do with 5G.
Now, we have about 1,000 5G sites in the country but by the end of the year we are going to have about 2,200 total 5G sites. So, we are investing significantly and will continue to invest to give as many Nigerians as possible, the benefit of 5G technology. We think there’s huge opportunities that 5G offers for transformation of our economy to fully digitized economy. There are also a lot of opportunities around education, automation of industries amongst others with 5G. But, apart from 5G, the second thing which I am very keen and excited about is the financial services. Nigeria does have a well advanced financial services Fintech industry. In some ways, I think, we are the most advanced in the world. But, there’s still a lot of latent opportunity, particularly in the rural areas. We come from all across Nigeria, we travel to our home towns at least once a year, you know that, we see queues at ATMs, you will see people queuing up for POS services. We are positioning MoMo PSB as a solution particularly in rural areas. I think the urban areas, are already advanced with in all areas of financial services to replace cash as means of payment. If you go to markets like Ghana, where we operate and markets like Kenya where we don’t operate, you actually be surprised how rarely, anyone ever uses cash. We are just at the beginning of that journey and we are fully committed to it because we want to transform the way this society operates and transfers values from using cash to MoMo PSB.
Please, explain more about the MoMo PSB…
As you are aware we were licensed by Central Bank sometime last year in May, to offer financial services under MoMo Payment Service Banking (MoMo PSB), and we also launched last year. Just like our connectivity business almost 20 plus years ago, MTN saw the opportunity and challenge here in Nigeria to try and drive connectivity across the various segments of the society, we also see that same challenge when we look at the financial services. As you are aware, more than 50% of Nigerians are today financially excluded. So, the MoMo PSB is a major opportunity for us to contribute our quota towards addressing the financial inclusion problem in Nigeria. Firstly for us, is to see how we can extend financial services to the last mile by offering great services, allowing customers to have access to the simple wallet solution, simple accounting solutions, where they can offer depository and withdrawal services, both in urban areas but more importantly, in the rural areas where we have most of the people that are financially excluded. But, beyond offering people those basic services, we all know bigger problem that we have when it comes to financial services and that is payment. We all experience how difficult it was during the cash crunch for people to make payments once cash was limited in Nigeria and that’s why we say MoMo is better than cash because we are offering our customers what’s convenient. When we say our customers, it’s not just customers of MTN, we offer services across all networks, whether you carry an Airtel SIM or Glo SIM potentially you will be able to open an account with MoMo. And so, for payments, we expect we should be able to remove the pain points and the frictions by offering both offline payment solutions and online. You know today, is not just about how you continue payments physically but more and more ecommerce is moving online. So, the ability for us to also enable online retailers to be able to access payment is very important. And so, that’s one area for us, how we can move almost a 90% cash based transactions today and digitize our process to enable people to carry out reliable and safe transactions using alternative medium primarily with MoMo. We are also trying to address the problem with payment across Africa. So, we are trying to build a different rail that connects African countries, so that transactions within Africa can be within Africa.
There was some clip that was trending on social media around African countries asking the question, why do we do African transactions with dollar? Why not use African currencies to do that? We are working on those initiatives. Already we have debut our inbound and outbound services with MoMo. We will be empowering our customers to be able to send money to every African country and also receive money from African countries and we are doing that using African rail and without dollar based transactions essentially just leveraging our currency swap. For us, it is one of those services that we are offering that will enable our customers to be able to live a much better life and a more connected lives not just in Nigeria, but also across Africa.
How committed is MTN to Nigeria?
We are 100% committed to this country. We are not a foreign company. Nobody thinks of Nestle or Nigerian Brewery as a foreign company. We are a Nigerian company and very committed at that. I have spoke about our staff representation etc but our commitment goes way beyond that. We announced some time ago that we are going to build a state of the art, iconic green building as our head offices. We have procure the land and we are in the process of doing the design and then we will go to tender for construction services. You know this kind of thing takes about three to four years. In four years time, we will be inviting you to the opening of our head office. We aspire that His Excellency the President will be able to do that for us when that time comes. We are committed and we are spending on what is ongoing on Enugu-Onitsha Expressway under the RITC and it stand for Road Infrastructure Tax Credit Scheme. So, we started that a few months ago and work is ongoing. The contractors that have been appointed by the Federal Ministry of works are engaged with their team there as agreed under the contractor terms in favour of public procurement etc. So, if you come from that area, you will see work ongoing. There was a delay, because of the transition of government, we haven’t done the media engagements on that but now that the cabinet has been appointed, will be engaging with the governors of the states, traditional rulers, Minister of works, etc to speak about that.
I can tell you that we have touched millions of people in every single local government in Nigeria through our Foundation. Our Foundation focuses on education, health, women empowerment, building hospitals, refurbishing an incredible number of classrooms, providing potable water, unique exceptional cases of medical challenges that we have sponsored, people in critical conditions for surgery, etc.
And it’s part of our contribution, and I think, above all we are compliant company, which means we follow the rules and regulations of Nigeria to the latter. Which is why we have received all sorts of awards. FIRS gave us an award as the most tax compliance company last year. The NGX has given us the most progressive company in terms of terms of gender equality, etc. But we are very humble, we are very humbled organization, that is the nature of the organization. We are pleased to serve, we are a compliant company and we follow the policies of the government and are ready to stand for what is right, what we are defended with by the laws of the country, which we operate., While we humble, we are also not a pushover. We are the largest company on the stock exchange in terms of market cap. We are very proud of that. We have included Nigerians in the share of value within the MTN Nigeria, through the public offer that we did and I think Nigerians bought it at 165 per share. We have seen capital appreciation as well as the steady flow of dividends. The interim dividend for 2022 is going to be paid today. We also did the first digital offer on the stock exchange. So, people applied online, paid online and that automates the whole system of registering their shares with CSCS to get their dividends automatically, that’s breaking another barrier because that solved the rigorous process of the manual process of registering the shares. We do intend to sell down further stakes in MTN Nigeria when the economic conditions are right. So, that might be quarter two or quarter three next year when the economy has stabilized. So, it is not a fixed date. The sell downs is by no means whatsoever any form of intention of exit of MTN Group from Nigeria, we are selling down to a minimum of 65%, so there is no question on the surface of the earth about exiting Nigeria, absolutely not because MTN is an African company, you are exiting to go where? It is not like an Indian company or British company or a Swiss company or GSK that said they are not doing anymore. Where are we going? This is home. We don’t have anywhere else to go. So, the real and only intention for the future sell don is to include even more Nigerians in the value of the space.
