According to Nairametrics analysis, Airtel Africa Plc has a market cap that is bigger than all the 14 banks listed in the Nigerian Stock Exchange. Airtel Africa has a market cap of N4.78 trillion while the 14 banks combine for N3.77 trillion.
This trajectory will continue because telecoms is the operating system of the knowledge economy. As banking, logistics, retail, and indeed all sectors are being digitized, telecom companies will capture more value.
Simply, everyone is growing the telecoms market. Move retail to ecommerce, you have created more data plans for the likes of MTN, Glo and Airtel. Call it being positioned at the edges of the smiling curve . In the banking sector, Zenith Bank maintained its lead as at Jan 31 2022: “Zenith Bank maintained the top spot with a market valuation of N817.9 billion, closely followed by GT Bank with a market cap of N791.7 billion. Stanbic IBTC with N463.2 billion valuation stands in third place, while First Bank’s valuation stood at N412.8 billion as of the end of January 2022. On the flip side, Unity Bank has the lowest market capitalization with N5.96 billion, following a N351 million decline compared to the previous month. Jaiz Bank also followed with a valuation of N23.5 billion, albeit a N4.1 billion gain in the month of January 2022.” Source: Nairametrics The biggest threat to the Nigerian banking sector is now the telecom companies like Airtel, MTN, etc. Across most dimensions, the telcos are now at the edges of the smiling curve while the banks are clearly at the center. The fintech companies, provided they can grow their user base, will be fine as they have made us accept that they can “tax” all transactions with their 1.99% charges. Banks do not have that freedom. In short, the Central Bank of Nigeria has reduced the charges with the slash of ATM, card and electronic fees. Largely, can the big banks double their market caps in the next decade at least to beat inflation and currency deterioration? Where investors do not think so, the high-growth, record-breaking telcos will be the new brides in the market. Comment 1 : MTN and Airtel will be the next biggest Fintechs. They make lots of revenue on inelastic demand to diversify and take over any sector that can use telecoms infrastructure as a launch pad. It’s simply the most logical next stop for MTN and Airtel. […]
