askivy_assessment_center_case_study

Company 4: MultiTel
Business Description
MultiTel is the no.1 mobile operator in Nigeria, and also owns an international phone card
distribution business. The company has over 35% market share in the country, and its brand is
very well recognised. The company is managed by a British businessman who came back to its
native Nigeria in 2005 to take the post as CEO, and the business has grown very rapidly since.
The company is partly owned by South Africa company SA Telecom (40% stake), various
investors from India (25%) and the rest is owned by the management. Due to financial issues,
SATelecom has been looking to sell its stake, however other shareholders’ intentions are not
known at this stage.
Multitel Markets
Multitel only operates in Nigeria, although it has plans to take advantage of its widely
recognised brand to expand in neighbouring countries. The Nigerian market growth potential is
substantial, as there are currently only 44m subscribers for a total population of 159m. In
additional, GDP growth rates have been stable and the population is very young and
increasingly sophisticated. Growth for mobile phones is primarily driven by the unreliable
landline network, and most people have more than one cell phone. The main competitor is the
government-owned Company Nigeria Telecom, however the company has been loosing market
share gradually due to the below average quality of service and poor network reliability.
Recently, several African and Middle Eastern telecom operators have started to set up
operations in the country, and the market is expected to become significantly more competitive
if those manage to establish a strong presence.
Financials in €m
MultiTel 2010 2011 2012 Forecast
Subscribers:
Mobile 11.2m 15.4m 20.1m
Growth +38.1% +29.8%
Revenue 405.1 534.1 662.2
Growth +30.1% +26.1%
EBITDA 48.2 59.1 66.2
Margin 12.1% 11.4% 10.0%
Estimated valuation based on peer companies: €600m-1,000m
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