Nigeria With N3 Trillion Revenue N857 Billion in Profit MTN Makes It Big

Post on: 2011-08-30 By: admin

As MTN Nigeria Communications Limited turns 10, it has every reason to celebrate. The company's shareholders in South Africa took a massive gamble on the Nigerian market when they decided to pay $285 million for a GSM licence following an auction held by the Nigerian Communications Commission in February 2001.
Today, not only is MTN Nigeria the jewel in the MTN Group's crown, its success story has proven that with the right business strategy and marketing guile, Nigeria can turn out an investors dream, despite the challenges of operating in the terrain.
This was evident in the survey conducted by THISDAY last week on MTN Nigeria's operations which showed that in 10 years, the company grossed a total of N2.988 trillion in revenues between March 2001 and December 2010, and posted profits after tax amounting to N857.655 billion during the same period.
In 10 years, the company has also grown its subscriber base from 327,000 in its first year of operation ending March 2002 to 40.5 million revenue generating subscribers by June 2011, representing 52 percent of market share and accounting for 26.6 percent of the MTN Group subscriber mix, comprising South Africa, Iran and other countries where the company operates.
But it has not been a bed of roses for MTN in Nigeria, as its first financial result in 2002 showed that it reported a loss after tax of N5.091 billion, but was able to turn this around by the next year by investing in an aggressive network expansion programme.
Between 2001 and 2010, the company's results indicated that MTN Nigeria invested N887.577 billion in fixed assets, enabling the company to build the largest network in the country comprising approximately 7,000 base transceiver stations, the largest switch in the world, the largest transmission network in terms of fibre and microwave in Africa, and has landed a submarine cable in the country to complement the bandwidth capability in Nigeria.
Funding its investment in the network required MTN to seek short and long term financing of N1.143 trillion from local and international markets during the 10 year period.
Having enjoyed the pioneer status granted GSM operators, which were exempted them from paying company income tax in the first five years of operations, MTN Nigeria, nonetheless, has paid taxes (starting in 2006), sundry levies and annual operating levies to the federal government and the NCC totaling N546.113 billion.
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