Behold the African Telecom King!
With the release of its latest annual results in South Africa which confirmed MTN as the most profitable telecom operator in Africa, Tayo Ajakaye in this report looks at the attributes of the telecom giant.
It was not until after the successful bid for a Digital Mobile Licence (DML) in January 2001 that many Nigerians came in contact with MTN. Before then, those who were familiar with that name were those who had been to either South Africa or any of the smaller African states where the company operates. The entry into Nigeria of MTN has been to the benefit of both the country and the operator.
Since it came into the country three years ago, MTN has become a household name in Nigeria, probably more than old time operator, NITEL. MTN has established its presence in several hundred villages and communities within this short period, a feat NITEL could not perform in 60 years. Without a doubt, MTN has become the first name and number on GSM Street in Nigeria.
The coming of the operator into Nigeria has enabled it settle scores with its long time rival, Vodacom, over who is the biggest operator in Africa.
MTN does not have to play second fiddle to Vodacom any more. In the results announced in South Africa Thursday last week, MTN Group made R4.3 Billion (N94.6Billion) profits as against Vodacom's R3.0 Billion (N61.5Billion) announced the previous Monday.
Of this amount, MTN Nigeria contributed more than half of the profit, making R2.7 billion or N59 billion of the total profits. MTN South Africa which used to contribute the highest profit to the Group was able to make only R2.2billion with a subscriber base of 6.5 millions as apposed to MTN Nigeria's subscriber base of 1.9 million.
The results show that evidently, the operator has done well for itself in Nigeria. But then, it has been of immense service to the country. It has made communicating easier and access simpler. Gone were the days when it takes upward of six months to get a functioning telephone line, MTN has helped to stop that. With the rapidity of its expansion which has seen it spread to more than 33 of the 36 states of the federation, and Abuja, MTN is really connecting Nigeria.
MTN has also offered employment to many Nigerians of various qualifications. It has given direct employment approximately 2,000 people and indirect employment to indigenes of several states where it operates. Probably more than it could itself calculate.
It is one of the biggest advertisers in Nigeria. Some dying publications have remained alive due to MTN's advert placement in such publications. The media have benefited and continues to benefit from the operator.
It has brought revenue to the country via duty on equipment. Whether while it was having five percent duty waiver like other operators on imported telecom equipment, or when it has started paying full duties on the equipment, MTN continues to be a source of revenue for government.
MTN has also been involved in several areas of sponsorships: sports, educational, musical and just about every other aspect of national life.
Recently, it has established a foundation which it hopes will coordinate its social responsibility efforts. The company's chairman, Pascal Dodzie, says it is a way of giving back something to the Nigerian people.
Again, more than any other company in recent times, MTN has announced to the world through its presence in Nigeria that the country is indeed a gold mine, just like the Indian traders have always known; and that beyond all the name calling, investors could do good business in Nigeria. Even the Presidency could not make a better statement for Nigeria.
Above all these, however, MTN has really made good for itself. It has been moving from profitability to even more profitability. No business in Nigeria seems to be more profitable than the MTN business. Not even the Nigerian Breweries, Guinness and Cadbury put together could make such profits in 12 months! MTN Nigeria keeps breaking profitability records which only MTN Nigeria was setting.
In making all the profits however, it seems that MTN has not treated its customers fairly. Till date MTN remains the only GSM operator in Nigeria where a subscriber cannot migrate to per second billing whenever he chooses. Since December 1, 2003 when NCC decreed that per second billing should be adopted by all operators, MTN complied for a couple of weeks and suspended it, claiming that there were too many subscribers to cope with on the PSB platform. Migration was to be resumed soon. Six months after, MTN is still not able to migrate people to the PSB. That speaks volumes for the biggest operator in Nigeria. Or is it that it is easier to make more easy money by keeping more people against their will on per minute billing (PMB)?
If a subscriber is on the MTN network and he has any problem and he dares call the help line, MTN charges him N6.00 per minute for disturbing, as it were, their operators. Otherwise, why would your operator charge you for asking for help? Currently all other GSM operators offer toll free help lines except MTN. And before the MTN operators would even come on line, the subscriber would have listened to unsolicited music for more than 10 minutes. That is a cool N60 for the operator who has not even listened to your problem, talk less of proffering solutions. If that happens to 100 subscribers in a day, that adds to N6000. And it goes on that way. No wonder, MTN is making such wonderful profits.
At better times, when the MTN Nigeria's management has not been so conscious of profit-making, MTN would offer free 100 SMS's for each of its subscribers, in acknowledgement of the fact that it had a congested network; so the free SMS messages serve as some form of compensation. Not anymore! Subscribers now have to bear the burden of dropped calls by themselves. They also have to pay for SMS not delivered. Subscribers have been looking for the appropriate name to call an operator that bills them for SMS not delivered.
At various sessions of the Telecom Consumer Parliament, an NCC-organised programme for bringing operators face-to-face with subscribers, MTN has been told about these problems repeatedly, but it has not undertaken any remedy. Some people believe it has got away with most of these acts because the country does not have a consumer protection law. And the few individuals who are in consumer advocacy are in it mainly for career development and not strictly for the love of the consumers.
Now MTN is giving out one percent of all the profit it makes to charity through its MTN Foundation. The question observers are asking is: does that adequately make up for the dropped calls which were billed, for the SMS messages which were also billed but not delivered? Wouldn't the subscribers prefer to get value for money instead of the company's method of trying to give back through philanthropy, a fraction of what it has wrongly taken?
It is good to make profits, but it would be wrong to make marvellous profits on the misfortune of those who love you enough to subscribe to your service. Profits should be made with good conscience. It should also be made in a fair manner. The fact that nobody is calling an operator to question does not mean that he should take the subscribers for a ride. It is not going to be a seller's market forever. Even in Nigeria. MTN should not put people in a situation where they are willing to dump its lines at the next minute an operator with equal competency comes along.
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