CALLING for the listing of telcos on African bourses may not have come at a better time than this period of economic recession which has put many countries’ economies in dire strait. This is because the capital market remains a veritable source of wealth creation and distribution, with a tremendous capacity to catalyse economic development.
Unarguably, the capital market would appear to have played major roles in the economic development of nations. A functional financial system is a reflection of the capital market which is buoyed by the listing of various equities.
There are about 29 bourses across the African continent, yet several African nations have struggled to list telcos on the local bourses. At different times, the authorities in several nations have move from persuasion to subtle threat and outright punitive steps to compel the telecommunications companies to list on the local bourse.
The benefits of listing on the local bourses are humongous and mutually beneficial to the entities and the publics. Notably, the listing of securities also entails disclosure of price-sensitive materials and financial information to the public on a regular basis. By and large, the decision on listing sends a clear signal to potential investors that the company management is willing to run the company transparently.
By agreeing to list, telcos would have demonstrated willingness to share their “prosperity” with the public through dividends, bonus issues, capital appreciation of share prices. This will not only endear the business to the investing public, it will also create a sense of ownership and protection for the entity. And aside from making the business of the equities more transparent via adherence to the corporate governance codes, it also ensures cost effectiveness in the process of raising capital in the capital market in sharp contrast to the money market.
The success story of Safaricom; the largest mobile operator in Kenya, which has been performing well at the Nairobi Security Exchange, is a reflection of the advantages that come with listing. The benefits of listing which is beyond raising more money for expansion, and the spread of the risk of ownership among a large group of shareholders, also include increasing the liquidity of the stock market. Listing of the telcos in Africa would bring additional transparency and boost confidence in the stock markets.
The MTN Group with footprints in South Africa, Sudan, Uganda, Rwanda, Zambia, Botswana, Congo Brazzaville, Cameroon, Nigeria, Benin, Ghana, Ivory Coast, Liberia, Guinea, and Guinea Bissau should take the lead in local listing. Etisalat Group, the UAE’s incumbent telecom operator, can also take a cue from the success of the sale of a 9.1 per cent stake in PT XL Axiata, an Indonesian mobile telecommunications provider, to go to the stock market with its African operations: Egypt, Tanzania, Nigeria, Sudan, Ivory Coast, Benin, Gabon, Togo, Central Africa, and Niger.
Vodacom, majority owned by UK operator Vodafone Group, should make local listing an option in South Africa, Tanzania, DRC and Mozambique, and Lesotho, while Vodafone; its parent company should do same in Egypt and Ghana. France Telecom-Orange, too, with footprints in Egypt, Niger, Ivory Coast, Cameroon, Kenya, Madagascar and Senegal, must consider local listing.
We encourage the Qtel Group, Qatar’s incumbent operator, to go to the market with its operations in Algeria and Tunisia just as it did with its Kuwait-based unit, Wataniya Telecom. Similarly, we encourage Bharti Airtel to ensure that the success of its listing in Zambia should be extended to Nigeria, Burkina Faso, Chad, Congo B, Democratic Republic of Congo, Gabon, Madagascar, Niger, Ghana, Kenya, Malawi, Seychelles, Sierra Leone, Tanzania, Uganda and Rwanda. Ditto for Zain Group’s operations in Sudan and Morocco. Orascom Telecom, owned by Russian telecom group, VimpelCom, must also list in Algeria via Djezzy, and in Central African Republic, Burundi, and Zimbabwe with Telecel Globe operations.
Millicom International Cellular, which is based in Luxembourg, must avoid the initial pitfall of its Senegal subsidiary by ensuring listing in other seven African countries.
It is equally important to challenge Globacom as a home grown success story from Nigeria to ensure listing across its operations in Nigeria, Benin, Ghana, Ivory Coast, Senegal, and Gambia.