MTN CONSIDERS LISTING IN NIGERIA

Mergers, Acquisitions and Financial Results

In a bid to broaden its Nigerian shareholder base, mobile phone company MTN Group (MTN) will consider some options including listing its Nigerian subsidiary in Lagos during the first quarter of next year, CEO Phuthuma Nhleko says.

For the first half ended September 2005, MTN derived 34% of its revenue from Nigeria where the subscriber base has grown to 7.7 million from 5.6 million in March, while average revenue per user (ARPU) plunged US$17 to $23 per month.

The West African country's ARPU is expected to remain steady around $20 for the next quarter, in line with the South African ARPU which came in at $26 (or 168 rand) per month for the three months ended September.

MTN's profit was 4.462 billion rand of which 51% or 2.284 billion rand came from Nigeria, while South Africa generated 1.822 billion rand with six other countries contributing 356 million rand.

Nhleko said the group was still in the process of evaluating different options but reiterated a potential flotation of MTN Nigeria.

Addressing the investment community after the release of the company's interim results, Nhleko said the operator wanted to grow its Nigerian subscriber base to 8.5 million by December 31.

Nigeria's cellular market size is expected to grow from around its current 16 million subscribers to between 25 and 30 million subscribers by 2009 and MTN has stated that, looking ahead, it would continue to entrench its market leadership position - which stands at 47% at present.

MTN Nigeria is 75%-owned by MTN while the balance is in the hands of local investors. In the case of listing, the parent company might have to reduce its shareholding in MTN Nigeria to ensure more players came on board and possibly aligning its free float with the stock exchange requirements in the West African country, analysts said.

Listing in Nigeria would also help cement the relationships between the operator and the local investors and other stakeholders, the analysts added.

Turning to South Africa - MTN's homebase, Nhleko said the subsidiary's performance was disappointing and acknowledged the fact that the company lost some ground - adding that it could have done better.

During the quarter ending December 31, the South African operation is expected to rise 11% to 10 million subscribers - way below the Vodacom Group which already has 16 million customers locally.

MTN this year made four acquisitions: Botswana, Cote d'Ivoire (the Ivory Coast), a tiny operator in Zambia and a 49% stake in Iran's second mobile operator, which is due to roll out within the next nine months.

The group is also expected to enter the Tunisian market and the sparsely-populated country of Namibia in 2006, which would take its footprint to twelve countries.

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