Published: March 16 2009 - The Financial Times
Phuthuma Nhleko is one of Africa’s most influential businesspeople. Since he took over as chief executive of MTN Group in 2002, he has led the company’s expansion from its South African home and turned it into the continent’s biggest mobile telephone operator. MTN had 90m subscribers at the end of last year and operations in 21 countries from Swaziland to Iran.
But with exponential growth comes dizzying expectations. Following the collapse of merger talks last year with Bharti Airtel and Reliance Communications – India’s two mobile giants – Mr Nhleko is under pressure to succeed in the big emerging markets beyond Africa and the Middle East.
On March 12 2009, after he presented MTN’s full-year results showing a 40 per cent increase in revenues, Mr Nhleko spoke to Tom Burgis, FT Johannesburg correspondent, at the company’s headquarters in South Africa’s commercial capital. He talked about expansion plans, the consolidation he foresees in African telecommunications and why the sector is better placed than most to whether the global recession. Below is an edited transcript.
Financial Times: You talk about consolidation coming in African telecoms but it’s not as simple as it seems. A lot of these markets, as you also say, are very crowded. And the new markets that one might be tempted to get into – India, China, wherever – it’s not an easy thing to do. How exactly do you see the sector consolidating?
Phuthuma Nhleko: I fully agree that it’s not an easy thing to do, which is why I’ve spoken about it for three years and nothing has happened. But, having said that, in 2008, in particular, we’ve seen more players coming into small markets that have got three, four, five players. I don’t want to name countries, because maybe this is misunderstood or misinterpreted, but if you look at our footprint, you will see that they are small countries and all I’m saying is it is our view that, in the medium term, some of the players may have a challenge in sustaining their business model.
This is really something that’s not completely unique to telecoms and eventually what will happen is, if tariffs have to come under pressure and margins are to come under pressure, what do you do? You want to start taking costs out and you start looking at economies of scale even more aggressively. Then, one of those ways of looking at economies of scale will probably entail more consolidation, so…
FT: Are these guys just going under or are they all going to be taken out?
PN: I think that it’s people being taken out, sorry, being bought. And in other words, companies will come together and say, okay look, we are three guys in this country or four guys. I’ve only got 10 per cent market share. I have to spend just as much as you on capex, and look at my returns, they’re going to the wall and why don’t we combine and you buy us out or we merge.
FT: You’re talking about the later entrants here?
PN: Yes. I’m talking more about late entrants.
FT: Then we can maybe bring MTN into that. There are the obvious markets. There are the greenfield markets, Angola, Ethiopia. You talked about North Africa. How much can you say about what sort of opportunities you’re either looking at or would like to look at in Africa?
PN: Unfortunately I can’t say much, because really there’s nothing really right now on the table of a serious nature, but suffice to say … If Angola said they were issuing a new licence, would we go for it? Yes, we are attracted to it. If Ethiopia said that they were issuing a new licence, would we look at it? Yes, we’d look at it. But, those are medium-sized licences.
If you look at consolidation, it will most probably happen amongst the players, amongst the operators, sorry, and to give them economies of scale. Now, I mean, I can’t give you any specifics because I don’t know when anybody would decide. It takes all sorts of conditions and things for people to say they need to do it. All I’m saying is as a company, we remain quite convinced that this will happen in the next 24 months or so.
FT: And where will that leave the sector?
PN: I think you’ll have fewer players with, you know, larger footprint, bigger balance sheets, more economies of scale, higher rationalisation and so on.
FT: Do you think the existing big players, the five or six, including three from here [MTN, state-owned Telkom and Vodacom, controlled by the UK’s Vodafone] plus Zain [of Kuwait] and France Telecom, do you think there’s enough room for all these big beasts?
PN: I wouldn’t want to speculate. Suffice to say that I would not rule out further rationalisation, even amongst the big players. I wouldn’t rule that out, but again, I’m so sensitive to being misinterpreted, that people think that there’s a deal under way. All I’m doing is giving my own humble prognosis on where I see the industry going, and I might turn out to be wrong, but that’s how we see it.
FT: How about where MTN is going? A lot of the analysts have asked you the question. They want to know where, after the collapse of talks with Bharti and Reliance, and with your projection for subscriber growth [forecast] next year of 22m much slower growth than this year, is MTN going to continue to be this huge, fast-growing story? And if so, you’re going to have to get into these big emerging markets outside Africa aren’t you?
PN: I think there is a lot of truth in that, in the sense that to maintain our growth, somehow we need to try and find larger markets. Now, what form that will take is always difficult to say. That is one of the reasons why we did have an engagement with the Indians last year but unfortunately, as you know, we didn’t conclude anything.
FT: Do you consider yourself a target? That’s obviously one way into the markets.
PN: Well, MTN is a publicly listed company, so it’s not for us as managers to say nobody should look at MTN. What I can say is we don’t have a for-sale sign out, because that’s not our job. Our job is to continue growing the business. If something came to pass as a result of somebody approaching our shareholders, it’s the shareholders’ job.
FT: Sure, but then in terms of what is up to you, R37bn capex [for the coming year, an increase from the previous one, itself a record]. That’s another big jump, though obviously some of that’s to do with the exchange rates…
PN: When you say some of it: 40 per cent. I mean, before you even start, the rand going from 6.40 to 10.40 [against the dollar] or what have you is a 40 per cent jump before we start, so there is a bit of a misconception about what the increase in the capex really is.
FT: Okay, but it’s still a large amount of money.
PN: In 21 countries, though.
FT: In 21 countries, but you’ve reduced your gearing, you say you’ve kept your dividend cover high to keep you flexible. There’s got to be a trade-off somewhere between how much cash you can have, ready to go for opportunities, and how much you can fund that directly from your balance sheet and how much you can return to shareholders.
PN: I think that’s true and we are trying to keep a sensible balance. A net debt to ebitda [ratio] of 0.3 is not demanding. If you benchmark us against our peer group, it’s extremely low. So I think we can tick that box, and then we can also say net debt of equity of 16 per cent is very decent, and we can tick that box, and significant cash resources, that’s quite large as well. So we’ve got a decent balance on those things.
If, let’s say, we had a net debt [to] equity [ratio] of 3 or 2.5 and we were tabling a capex roll-out of R37bn, then I would agree with you that somebody would be justified in saying, you guys, you’re out of kilter somewhere. But I think we’ve got a comfortable arrangement, and this is why we’re confident to continue paying out the dividend on the current dividend cover that we’ve always had: the five [the amount of times the dividend could be paid from profits]. A lot of companies are holding back on dividends. We’ve paid, because we’re very comfortable with the cash generation.
FT: But how would you fund that capex? Do you fund it all through cash flow?
PN: It’s cash flow, but we also have borrowings in-country, because we try to optimise the balance sheet and optimise return on investment, so it wouldn’t make sense to use all the cash. But in doing that borrowing, obviously we try and match where our revenues are, so that we don’t have a misalignment on currency.
FT: So do we consider this cash in the bank, this R27bn [at December 31], effectively a war chest?
PN: It is in some respects a war chest, in the sense that that’s why it’s there.
FT: You mentioned borrowing and your finance costs seem to be down. How are the capital markets out there? I mean, if you’re borrowing in Nigeria, obviously the Nigerian capital market seems to be in a state of complete turmoil. Are you finding the capital markets much more difficult, even for a blue chip company?
PN: We haven’t gone out for borrowings since it really got bad. I think our timing was fortunate.
FT: Of the reduced gearing?
PN: Yes, and the borrowings that we did in-country. You know, all of this happened beginning of ‘08, end of ‘07, so by the time things really got bad in the financial markets, we had essentially made the larger borrowings that we had to make and we had the facilities. But what underpins it all is that it’s a very cash-generative business, which helps, so we haven’t gone out to markets to try and raise money.
FT: And the margins seem to be holding up okay. But presumably one would see one of the effects of the global recession being reduced margins and that might be something that feeds into the consolidation?
PN: Yes, we can’t believe that we’d ever remain unscathed but we also are saying that this sector is fairly resilient. I mean, you saw the margins in this business – when I say the margins, the average revenue per user. The outlook [is] very resilient. It’s come down slightly, which we expect, as you go deeper into the market, but it’s been fairly strong. And the take up in the last two months, the first two months of 2009 – still very strong. So that’s why when people ask us, what are the prospects? Why do we say “cautiously optimistic”? Well, we say cautiously optimistic because we are that we will weather the storm. We will be affected but it’s a fairly strong business model.
FT: You also mentioned commodities [during the results presentation] and I thought that was very interesting, from a broader business perspective in Africa. To what extent are African business and these other sectors – telecoms, banks – still fundamentally dependent on the performance of commodities?
PN: You know, that is one of the most difficult questions to answer, because the stats are just so completely unreliable. The answer is it is still dependent, particularly the oil economies. If you look at the balance of payments, they’re reliant on what’s coming in through oil export revenue.
But I would also say people also underestimate the extent of the shadow economy in these countries, where people are not completely reliant on government for a living and for a job and so on.
FT: The informal economy?
PN: The informal economy, yes. It’s quite big. If it weren’t, if we would have gone with the IMF and World Bank stats for Nigeria – which we started with, by the way, in fact, one of the reasons why we underinvested initially, was because we were going with those stats – we would get a lot of things wrong.
But because the shadow economy is so big and it is informal, I think that in some cases the impact of the commodity cycle is exaggerated. There are some countries where we haven’t seen a decline in spend. I’m not saying we’re not going to see it by June but maybe [it will be] a bit later or maybe it’s not going to be that big, I don’t know.
FT: So is this the much-maligned African informal economy coming to the rescue?
PN: I think it is there. You know, it is always difficult to prove how big it is. All we can go by is the traffic: it’s the spend – it’s a pre-paid business – and it’s the growth.
FT: That’s the unforeseen cushion from the crisis?
PN: To some extent, yes.
FT: On the margins, obviously you’re making a lot of money and you’re talking about consolidation as smaller players’ margins come under pressure, or even bigger players’. Isn’t there a developmental aspect to this as well? The mobile phone is of huge importance in Africa. With greater consolidation, greater revenues and fewer big players, won’t that drive up prices for millions and millions of poor Africans, for whom [mobile telephony] is a very important developmental factor?
PN: Not necessarily, because there’s an affordability issue. There’s a point of diminishing returns. You can’t just have high tariffs and leave out a huge part of the population, because everybody has a cap on spend. The fact that those people can afford high tariffs doesn’t mean that they’ve got an infinite use of the phone. So, you basically do need lower tariffs to get more people affording? And to be able to maintain margins at lower tariffs and possibly lower output. So you want a large business, rather than high margins, high tariffs and a small business. But I accept that somewhere there’s a desirable balance.
FT: If you were to pick out a couple of trends for African telecoms over the next 12 to 24 months, do you see the economic crisis having much of an effect, or is it resistant enough and has it become ingrained enough?
PN: No, it will because Africa is part of the world. All I’m saying is there are three key factors that are going to instruct or determine what that impact is.
One, most of the emerging markets and Africa in particular have got very low fixed-line penetration. There’s no other alternative [to mobiles], so that already gives you a cushion. Two, it’s low penetration. So people still need to get a phone, just for voice, let alone all these sophisticated things [data services and the like]. Thirdly, there is a very big informal sector that is unregistered and surviving on its own. And then, of course, whether you are in Sweden or you are in Swaziland or Rwanda, the mobile phone has become almost and essential service, so maybe that’s a fourth reason.
So, because of those four reasons, I’m saying that it is our view that the impact of the global crisis is not going to be as severe in our industry as it will be on, let’s say, someone who is in luxury goods.
FT: So the consolidation is just because it’s an overcrowded field?
PN: Exactly.
FT: Anything else going to change? The role of governments?
PN: I think the regulators are becoming more and more partners in terms of recognising that over-regulation doesn’t suit them, it reduces penetration, it reduces what we can do. Again, it’s a happy medium. We do say to governments that sometimes when they want to balance the treasury books, the easiest thing is just to slap taxes and levies and all of that but we are saying it’s extremely short-termist.
FT: That’s happening now in Nigeria, Uganda …
PN: Yes, but it’s levies, it’s manageable. There’s no operator in the world that’s going to say they’re happy about receiving levies applied on them but all we’re saying is there is an element of taking a holistic view, what makes sense for the industry, what makes sense for the country.
FT: But this makes you a victim of your strength. You mentioned the strength of MTN and your peers. In tough times, such as now, it’s the telecom companies that the government might look to for a few extra…
PN: Yes, but if they start making it unattractive for the operators to invest … That’s why I’m saying it’s short-termism, because what happens is everybody is looking for stimulus. We are the guys that are still spending a significant amount on infrastructure. If they do things that discourage us from spending an amount on infrastructure and all of that, that’s just … you know?
FT: They risk that?
PN: Yeah.
FT: Thank you.
Phuthuma Nhleko is one of Africa’s most influential businesspeople. Since he took over as chief executive of MTN Group in 2002, he has led the company’s expansion from its South African home and turned it into the continent’s biggest mobile telephone operator. MTN had 90m subscribers at the end of last year and operations in 21 countries from Swaziland to Iran.
But with exponential growth comes dizzying expectations. Following the collapse of merger talks last year with Bharti Airtel and Reliance Communications – India’s two mobile giants – Mr Nhleko is under pressure to succeed in the big emerging markets beyond Africa and the Middle East.
On March 12 2009, after he presented MTN’s full-year results showing a 40 per cent increase in revenues, Mr Nhleko spoke to Tom Burgis, FT Johannesburg correspondent, at the company’s headquarters in South Africa’s commercial capital. He talked about expansion plans, the consolidation he foresees in African telecommunications and why the sector is better placed than most to whether the global recession. Below is an edited transcript.
Financial Times: You talk about consolidation coming in African telecoms but it’s not as simple as it seems. A lot of these markets, as you also say, are very crowded. And the new markets that one might be tempted to get into – India, China, wherever – it’s not an easy thing to do. How exactly do you see the sector consolidating?
Phuthuma Nhleko: I fully agree that it’s not an easy thing to do, which is why I’ve spoken about it for three years and nothing has happened. But, having said that, in 2008, in particular, we’ve seen more players coming into small markets that have got three, four, five players. I don’t want to name countries, because maybe this is misunderstood or misinterpreted, but if you look at our footprint, you will see that they are small countries and all I’m saying is it is our view that, in the medium term, some of the players may have a challenge in sustaining their business model.
This is really something that’s not completely unique to telecoms and eventually what will happen is, if tariffs have to come under pressure and margins are to come under pressure, what do you do? You want to start taking costs out and you start looking at economies of scale even more aggressively. Then, one of those ways of looking at economies of scale will probably entail more consolidation, so…
FT: Are these guys just going under or are they all going to be taken out?
PN: I think that it’s people being taken out, sorry, being bought. And in other words, companies will come together and say, okay look, we are three guys in this country or four guys. I’ve only got 10 per cent market share. I have to spend just as much as you on capex, and look at my returns, they’re going to the wall and why don’t we combine and you buy us out or we merge.
FT: You’re talking about the later entrants here?
PN: Yes. I’m talking more about late entrants.
FT: Then we can maybe bring MTN into that. There are the obvious markets. There are the greenfield markets, Angola, Ethiopia. You talked about North Africa. How much can you say about what sort of opportunities you’re either looking at or would like to look at in Africa?
PN: Unfortunately I can’t say much, because really there’s nothing really right now on the table of a serious nature, but suffice to say … If Angola said they were issuing a new licence, would we go for it? Yes, we are attracted to it. If Ethiopia said that they were issuing a new licence, would we look at it? Yes, we’d look at it. But, those are medium-sized licences.
If you look at consolidation, it will most probably happen amongst the players, amongst the operators, sorry, and to give them economies of scale. Now, I mean, I can’t give you any specifics because I don’t know when anybody would decide. It takes all sorts of conditions and things for people to say they need to do it. All I’m saying is as a company, we remain quite convinced that this will happen in the next 24 months or so.
FT: And where will that leave the sector?
PN: I think you’ll have fewer players with, you know, larger footprint, bigger balance sheets, more economies of scale, higher rationalisation and so on.
FT: Do you think the existing big players, the five or six, including three from here [MTN, state-owned Telkom and Vodacom, controlled by the UK’s Vodafone] plus Zain [of Kuwait] and France Telecom, do you think there’s enough room for all these big beasts?
PN: I wouldn’t want to speculate. Suffice to say that I would not rule out further rationalisation, even amongst the big players. I wouldn’t rule that out, but again, I’m so sensitive to being misinterpreted, that people think that there’s a deal under way. All I’m doing is giving my own humble prognosis on where I see the industry going, and I might turn out to be wrong, but that’s how we see it.
FT: How about where MTN is going? A lot of the analysts have asked you the question. They want to know where, after the collapse of talks with Bharti and Reliance, and with your projection for subscriber growth [forecast] next year of 22m much slower growth than this year, is MTN going to continue to be this huge, fast-growing story? And if so, you’re going to have to get into these big emerging markets outside Africa aren’t you?
PN: I think there is a lot of truth in that, in the sense that to maintain our growth, somehow we need to try and find larger markets. Now, what form that will take is always difficult to say. That is one of the reasons why we did have an engagement with the Indians last year but unfortunately, as you know, we didn’t conclude anything.
FT: Do you consider yourself a target? That’s obviously one way into the markets.
PN: Well, MTN is a publicly listed company, so it’s not for us as managers to say nobody should look at MTN. What I can say is we don’t have a for-sale sign out, because that’s not our job. Our job is to continue growing the business. If something came to pass as a result of somebody approaching our shareholders, it’s the shareholders’ job.
FT: Sure, but then in terms of what is up to you, R37bn capex [for the coming year, an increase from the previous one, itself a record]. That’s another big jump, though obviously some of that’s to do with the exchange rates…
PN: When you say some of it: 40 per cent. I mean, before you even start, the rand going from 6.40 to 10.40 [against the dollar] or what have you is a 40 per cent jump before we start, so there is a bit of a misconception about what the increase in the capex really is.
FT: Okay, but it’s still a large amount of money.
PN: In 21 countries, though.
FT: In 21 countries, but you’ve reduced your gearing, you say you’ve kept your dividend cover high to keep you flexible. There’s got to be a trade-off somewhere between how much cash you can have, ready to go for opportunities, and how much you can fund that directly from your balance sheet and how much you can return to shareholders.
PN: I think that’s true and we are trying to keep a sensible balance. A net debt to ebitda [ratio] of 0.3 is not demanding. If you benchmark us against our peer group, it’s extremely low. So I think we can tick that box, and then we can also say net debt of equity of 16 per cent is very decent, and we can tick that box, and significant cash resources, that’s quite large as well. So we’ve got a decent balance on those things.
If, let’s say, we had a net debt [to] equity [ratio] of 3 or 2.5 and we were tabling a capex roll-out of R37bn, then I would agree with you that somebody would be justified in saying, you guys, you’re out of kilter somewhere. But I think we’ve got a comfortable arrangement, and this is why we’re confident to continue paying out the dividend on the current dividend cover that we’ve always had: the five [the amount of times the dividend could be paid from profits]. A lot of companies are holding back on dividends. We’ve paid, because we’re very comfortable with the cash generation.
FT: But how would you fund that capex? Do you fund it all through cash flow?
PN: It’s cash flow, but we also have borrowings in-country, because we try to optimise the balance sheet and optimise return on investment, so it wouldn’t make sense to use all the cash. But in doing that borrowing, obviously we try and match where our revenues are, so that we don’t have a misalignment on currency.
FT: So do we consider this cash in the bank, this R27bn [at December 31], effectively a war chest?
PN: It is in some respects a war chest, in the sense that that’s why it’s there.
FT: You mentioned borrowing and your finance costs seem to be down. How are the capital markets out there? I mean, if you’re borrowing in Nigeria, obviously the Nigerian capital market seems to be in a state of complete turmoil. Are you finding the capital markets much more difficult, even for a blue chip company?
PN: We haven’t gone out for borrowings since it really got bad. I think our timing was fortunate.
FT: Of the reduced gearing?
PN: Yes, and the borrowings that we did in-country. You know, all of this happened beginning of ‘08, end of ‘07, so by the time things really got bad in the financial markets, we had essentially made the larger borrowings that we had to make and we had the facilities. But what underpins it all is that it’s a very cash-generative business, which helps, so we haven’t gone out to markets to try and raise money.
FT: And the margins seem to be holding up okay. But presumably one would see one of the effects of the global recession being reduced margins and that might be something that feeds into the consolidation?
PN: Yes, we can’t believe that we’d ever remain unscathed but we also are saying that this sector is fairly resilient. I mean, you saw the margins in this business – when I say the margins, the average revenue per user. The outlook [is] very resilient. It’s come down slightly, which we expect, as you go deeper into the market, but it’s been fairly strong. And the take up in the last two months, the first two months of 2009 – still very strong. So that’s why when people ask us, what are the prospects? Why do we say “cautiously optimistic”? Well, we say cautiously optimistic because we are that we will weather the storm. We will be affected but it’s a fairly strong business model.
FT: You also mentioned commodities [during the results presentation] and I thought that was very interesting, from a broader business perspective in Africa. To what extent are African business and these other sectors – telecoms, banks – still fundamentally dependent on the performance of commodities?
PN: You know, that is one of the most difficult questions to answer, because the stats are just so completely unreliable. The answer is it is still dependent, particularly the oil economies. If you look at the balance of payments, they’re reliant on what’s coming in through oil export revenue.
But I would also say people also underestimate the extent of the shadow economy in these countries, where people are not completely reliant on government for a living and for a job and so on.
FT: The informal economy?
PN: The informal economy, yes. It’s quite big. If it weren’t, if we would have gone with the IMF and World Bank stats for Nigeria – which we started with, by the way, in fact, one of the reasons why we underinvested initially, was because we were going with those stats – we would get a lot of things wrong.
But because the shadow economy is so big and it is informal, I think that in some cases the impact of the commodity cycle is exaggerated. There are some countries where we haven’t seen a decline in spend. I’m not saying we’re not going to see it by June but maybe [it will be] a bit later or maybe it’s not going to be that big, I don’t know.
FT: So is this the much-maligned African informal economy coming to the rescue?
PN: I think it is there. You know, it is always difficult to prove how big it is. All we can go by is the traffic: it’s the spend – it’s a pre-paid business – and it’s the growth.
FT: That’s the unforeseen cushion from the crisis?
PN: To some extent, yes.
FT: On the margins, obviously you’re making a lot of money and you’re talking about consolidation as smaller players’ margins come under pressure, or even bigger players’. Isn’t there a developmental aspect to this as well? The mobile phone is of huge importance in Africa. With greater consolidation, greater revenues and fewer big players, won’t that drive up prices for millions and millions of poor Africans, for whom [mobile telephony] is a very important developmental factor?
PN: Not necessarily, because there’s an affordability issue. There’s a point of diminishing returns. You can’t just have high tariffs and leave out a huge part of the population, because everybody has a cap on spend. The fact that those people can afford high tariffs doesn’t mean that they’ve got an infinite use of the phone. So, you basically do need lower tariffs to get more people affording? And to be able to maintain margins at lower tariffs and possibly lower output. So you want a large business, rather than high margins, high tariffs and a small business. But I accept that somewhere there’s a desirable balance.
FT: If you were to pick out a couple of trends for African telecoms over the next 12 to 24 months, do you see the economic crisis having much of an effect, or is it resistant enough and has it become ingrained enough?
PN: No, it will because Africa is part of the world. All I’m saying is there are three key factors that are going to instruct or determine what that impact is.
One, most of the emerging markets and Africa in particular have got very low fixed-line penetration. There’s no other alternative [to mobiles], so that already gives you a cushion. Two, it’s low penetration. So people still need to get a phone, just for voice, let alone all these sophisticated things [data services and the like]. Thirdly, there is a very big informal sector that is unregistered and surviving on its own. And then, of course, whether you are in Sweden or you are in Swaziland or Rwanda, the mobile phone has become almost and essential service, so maybe that’s a fourth reason.
So, because of those four reasons, I’m saying that it is our view that the impact of the global crisis is not going to be as severe in our industry as it will be on, let’s say, someone who is in luxury goods.
FT: So the consolidation is just because it’s an overcrowded field?
PN: Exactly.
FT: Anything else going to change? The role of governments?
PN: I think the regulators are becoming more and more partners in terms of recognising that over-regulation doesn’t suit them, it reduces penetration, it reduces what we can do. Again, it’s a happy medium. We do say to governments that sometimes when they want to balance the treasury books, the easiest thing is just to slap taxes and levies and all of that but we are saying it’s extremely short-termist.
FT: That’s happening now in Nigeria, Uganda …
PN: Yes, but it’s levies, it’s manageable. There’s no operator in the world that’s going to say they’re happy about receiving levies applied on them but all we’re saying is there is an element of taking a holistic view, what makes sense for the industry, what makes sense for the country.
FT: But this makes you a victim of your strength. You mentioned the strength of MTN and your peers. In tough times, such as now, it’s the telecom companies that the government might look to for a few extra…
PN: Yes, but if they start making it unattractive for the operators to invest … That’s why I’m saying it’s short-termism, because what happens is everybody is looking for stimulus. We are the guys that are still spending a significant amount on infrastructure. If they do things that discourage us from spending an amount on infrastructure and all of that, that’s just … you know?
FT: They risk that?
PN: Yeah.
FT: Thank you.
