MTN – Great company, poor communicator

It’s the same with MTN. The mobile operator may have facilitated communications among millions of people across the continent but its own communication leaves much to be desired.

It is the only listed company I know that would not offer comment to journalists until the day after the interim results came out. Granted, the numbers were only released very late, but perhaps someone should explain to MTN that being in the news business means a comment from a CEO on the day of the news is far more valuable than one the day after, when other companies are reporting, and happily presenting their CEOs to journalists for a grilling.

Most CEOs are approachable to journalists with a single phone call. Others might take a little longer to track down, but are certainly reachable most times of the year through one or two key people – that all-important PA, the key corporate communications person. Other important people don’t mind at all being called up on their cell phones at any stage.

Not so in the case of MTN CEO Phuthuma Nhleko. He must meet with institutional investors more often (or maybe they experience similar frustrations). But, the only time he ‘presents’ himself to the media is twice a year – when journalists get handed a copy of the presentation slides, normally not even accompanied by a full set of financials – and thrust into a room to compete with scores of other news-hungry journos to squeeze in a question or two before dashing back to their keyboards to file a story on deadline.

And it always feels like he’s there under duress.

Any question posed through the corporate communications department during the year – on matters other than those of a product related nature – are guaranteed to illicit a stock standard response in the order of: “MTN continues to identify value-enhancing expansion opportunities in line with the group’s vision to be a leader in telecommunications in developing markets.”

The fact that MTN is on an expansion drive, and has been trading under cautionary a lot of the time makes this kind of response more understandable. Companies can’t discuss negotiations once they get to a serious stage. They can only warn the market to trade with caution in their shares until a further announcement is made.

But, it is frustrating nonetheless and represents a broader culture of trying to fly below the radar despite punching right up there in the market value and performance stakes.

Also frustrating is being invited to ‘big announcements’ only to find there’s a new consumer offering on the market. Take the ‘news’ of MTN’s 3G launch. Moneyweb wrote about it a week before the launch after details of the offering were posted on broadband activist website MyADSL. But, the group still hosted a clearly expensive ‘mad hatter’s tea party’ replete with yellow cookies to celebrate the ‘news’ of the big launch. All very well for other stakeholders, but an unnecessary two hours out of the day of any busy journalist needing to tackle other ‘news’.

But why should MTN communicate better with the media?

The company itself doesn’t seem to have been disadvantaged by the lack of presenting itself for comment. Shareholders can hardly complain about a price of more than R60, for a share that only three years ago was trading below R10. MTN has been such a success story that journalists write about it all the time anyway, tapping into whatever they can glean from the company, as well as in our case, into the knowledge of the fund managers who’ve pumped millions into the company on behalf of their fund holders and know it well.

These fund managers take a long-term view of the company, and don’t care whether or not Moneyweb interviews the CEO the night of the results, as they’ll more than likely work the numbers through their models and then head out to the analysts’ presentation the next day. But, although Moneyweb serves those in the financial services industry – the bulk of our readers work in this industry – we also serve the man in the street who relies on us for access to company insights.

Communications specialist Clive Simpkins puts it into perspective. He says how a company communicates is a “pivotal aspect” of its corporate image. Good communication can add value to a company’s share price by creating the perception that the company is in safe and competent hands.

The irony with MTN, however, is that despite intermittent communication with some stakeholders, few seem to doubt management’s ability to run the company well. It is widely acknowledged as being a smooth operator in difficult markets, and is known not to overpay for acquisitions. This kudos seems to have become widespread once it demonstrated it had made a success of Nigeria.

So one could argue it has demonstrated its abilities, rather than told people about its achievements. Which is fine when things are going well, but what about if it ever falls on hard-times or slips up?

Simpkins describes the media as a company’s “umbilical cord” to its stakeholders. He says in today’s world of powerful alternative media like blogs, Wikis and RSS feeds, “out-of-touch management teams are putting their personal and corporate reputations at risk with poor media skills.” He says: “Media competence is a strategic marketing differentiator between companies. The adage of ‘you snooze you lose’ has never been more apposite.”