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Investors in quoted telcos earn N396bn in 4 months

Sub-sector posts N7.055trn in market capitalisation
COVID-19 lockdown, virtual parleys spur growth

Shareholders in mobile telecommunications services companies quoted on the main and premium boards of the nation’s stock market have earned about N396 billion in the last four months of last year following positive market sentiments even as COVID-19 continues to ravage the world. The market sentiments for the segment, which comprises two telecom firms, MTN Nigeria Plc and Airtel Africa Plc, have remained resilient in the face of the pandemic.

Checks by our correspondent revealed that the sub-sector recorded a gain of N396 billion or 5.95 per cent to close at N7.055 trillion in market capitalisation on April 30, as against opening figure of N6.659 trillion at the beginning of trading on January 2. It is on record that the regulatory action taken by the Nigerian Communications Commission (NCC) to facilitate the listing of MTN Nigeria on the country’s stock exchange market has continued to bring economic gains to Nigeria and Nigerians in terms of boosting market capitalisation and yielding dividends to shareholders.

Shortly after the listing, market analysts said that MTN investors had raked in over N1 trillion in price appreciation and dividends since April 2020. The listing of MTN was as a result of NCC’s effective regulatory action taken during the mobile network operator’s fine settlement agreement in 2016, which compelled the telco to, among other things, list on the Nigerian Stock Exchange (NSE).

The listing was one of the outcomes of the NCC’s stringent regulatory posture, which served as tonic for other telcos such as Airtel to follow the same direction. Further checks by New Telegraph revealed that MTN Nigeria Plc recorded N102 billion gain or 2.95 per cent to close at N3.560 trillion from the opening figure of N3.458 trillion on January 2. Airtel Africa Plc on the other hand gained N294 billion or 9.18 per cent to close at N3.495 trillion in April 30, 2021, in contrast to N3.201 trillion at the beginning of the year. Telecoms companies are currently taking advantage of the pandemic to rake in gains from data subscriptions and voice calls.

A former Director of Public Affairs, Nigerian Communications Commission, Dr Henry Nkemadu, had last year confirmed the fact that there had been a large amount of voice and data traffic in recent times. This, according to him, has necessitated the installation of more fibre cables in certain areas in the country to provide the needed capacity. “As a result of the lockdown, the amount of voice and data usage has increased by huge amounts and there is a need to expand the network to provide optimum quality of service to users sitting at home.

Telecom is also critical for information dissemination during the lockdown,” Nkemadu said. Internet traffic has also increased in Lagos and other states where the lockdown, which aims to reduce the spread of coronavirus, has taken effect. Many workers are leveraging the Internet for online education, teleworking, gaming and entertainment and there has been a rise in Internet traffic recorded by the Internet exchange point. According to reports, the Chief Executive Officer, Internet Exchange Point of Nigeria, Muhammed Rudman, had said a surge in Internet traffic was noticed on March 31, when the lockdown took effect in selected states, especially in Lagos.

According to him, Internet traffic increased by as many companies introduced work-fromhome policy, a week before the government-imposed lockdown. In post-COVID-19 era, telcos are expected to perform well as the world will be more connected and businesses better prepared for such calamities, says GlobalData, a leading data and analytics company. Emma Mohr-McClune Technology Service Director at GlobalData, says: “The global telecom market will face sales challenges due to retail store closures and supply chain disruption, and may also take an average revenue per user (ARPU) hit as states insist on bill waive programs to keep the financially weak sectors of society online. “Customer support lines will also be affected, as call center staff are required to work from home wherever possible. 5G spectrum auctions and roll-outs are facing delays in several countries.” In the long-term the outlook remains positive, as reliable connectivity becomes a critical commodity.

 

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