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MTN plans a less ambitious BEE deal
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Thabiso Mochiko
Business Day
Monday, March 15, 2010
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MTN Group still intends to conclude a black economic empowerment (BEE) transaction, but will not sell as many shares as the 5%-6% it said it would in December 2008.
MTN CEO Phuthuma Nhleko said on Friday the market capitalisation of the company had grown so much — from R186bn in December 2008 to R219,2bn — that a 6% shareholding would be worth almost R13bn, which the company deemed excessive.
MTN had said it would sell shares to the black public after the winding up of its black group, Newshelf. That plan was shelved in February last year when finance was found to be too costly.
Presenting results for the year to December, Nhleko said MTN was still committed to the BEE deal. Further details would come in the third quarter of this year.
“We are still working on the modalities. We want to come up with an acceptable BEE scheme to ensure we address all the aspects. The structure also has to be inclusive,” he said, meaning the shares should be spread among community groups, employees and the general public. Nhleko said the smaller deal would meet government requirements.
MTN reported a 16% decline in adjusted headline earnings per share to 754,3c. The group is continuing with its investments in networks and submarine cables to boost its earnings.
At least 15% of MTN’s revenue of R111,9bn came from data.
Consultants Frost & Sullivan said this showed that the days of data consisting only of short message services and accounting for less than 10% of an operator’s revenue were gone. “There is an increased demand for services such as high-speed internet, VPN (virtual private networks) and mobile internet,” said Frost & Sullivan analyst Silvia Hirano Venter. She said cellphones were slowly starting to replace personal computers. “In sub-Saharan Africa, where a PC is still quite expensive, there is less incentive for consumers to acquire laptops or desktops if they can do what they need from their phones.”
She said growth opportunities in the 21 African and Middle Eastern countries markets where MTN operated were significant.
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