Ferdi Moolman, the Chief Executive Officer of MTN Nigeria has given insights on how the company managed to remain in business during the teething period of Covid-19 pandemic in Nigeria.
While agreeing that the pandemic caused unprecedented disruption to businesses and impacted lives and livelihoods, he averred that even though the operating environment remains challenging, “the easing of lockdown restrictions led to an improvement in economic activity and market conditions into H2.”
“Our response to the pandemic and its impact can be categorised into four broad areas, namely social, commercial, network and supply chain as well as funding and liquidity considerations.
“In terms of the social impact, we launched various initiatives to provide support for our people, customers and the various levels of government as part of our Y’ello Hope packages. We empowered our people to work remotely and implemented health measures and monitoring to ensure their safety and business continuity. We continue to provide welfare support to them through the MTN Global Staff Emergency Fund.
“Our customers, particularly lower-income earners, benefitted from the free SMS initiative introduced in Q2. This provided customers with 300 free text messages for three months to ensure that they remained in touch with friends and family. Over 4.3 billion text messages were sent by more than 75% of our subscribers. We zero-rated access to a range of health and education sites, enabling our customers to access vital information at no cost to them. Fees for local money transfers via the MoMo Agent Network were waived for a month, during the lockdown, to support our customers.
“We rolled out a number of interventions to support the thousands of small businesses that rely on us for connectivity. These included the relaxation of payment terms at the beginning of the crisis as well as designing and delivering the multi-faceted REVV programme. These initiatives were aimed at supporting MSMEs amid the economic disruptions resulting from the COVID-19 pandemic. Over 20,000 MSMEs registered for our masterclass sessions and we provided support for the 200 MSMEs (Y’ello 200) that emerged from the programme, helping them to adapt to a digital marketplace.
Moolman revealed that “To support government’s efforts at combatting the pandemic, we donated N1 billion to CACOVID and delivered N250 million worth of personal protective equipment (PPE) to the Nigeria Centre for Disease Control (NCDC), through the MTN Nigeria Foundation. This is in addition to the logistical and communications support provided to the Nigerian Governors Forum, NCDC and State Governments. We made an early payment of our taxes ahead of established deadlines to support the Federal Inland Revenue Services’ (FIRS) revenue acceleration efforts.
According to him, “From a commercial perspective, we saw encouraging trends in our traffic patterns as COVID-19 restrictions eased. Demand for voice services, which initially came under pressure in April 2020, has fully recovered and voice traffic reached new highs by Q4. Demand for data and digital services grew significantly as lockdowns were imposed and remained resilient at elevated levels due to shifts in consumer spending patterns. There was also an increased uptake of our fintech services with transaction volume in April 2020 rising by more than three times above the March 2020 level to 4.3 million, and the momentum has continued to increase.
“In terms of network and supply chain, our immediate response when COVID-19 restrictions kicked in was to enhance network capacity to maintain service quality following an unprecedented surge in data traffic. We were only able to rollout a limited number of sites in Q2 due to the constraints on movement, paucity of foreign exchange and port congestion. However, we accelerated site rollouts in H2 as restrictions and logistical bottlenecks eased. As a result, we achieved a 60% 4G population coverage in 2020, which is in line with our target.
The CEO noted further that “Our funding and liquidity remain well-managed, supported by strong cash flows and approved funding facilities. Our headroom to leverage is comfortably within banking covenants and is able to meet our operational, investment and financial requirements. The foreign currency exposure of our borrowings is within comfortable limits, with 94% of our debt in local currency, which positions our balance sheet well to withstand currency volatility. We plan to use the bond market to further diversify our funding sources and optimise funding costs, while mitigating exposure to market risks.
