MTN to com­ply with dead­line

Business Day - - FRONT PAGE - Nick Hed­ley hed­leyn@busi­nesslive.co.za

MTN Benin says it will com­ply with a dead­line set by the coun­try’s telecom­mu­ni­ca­tions reg­u­la­tor, Ar­cep, which has warned that the mo­bile op­er­a­tor faces pos­si­ble sanc­tions over un­paid fees.

MTN Benin says it will com­ply with a dead­line set by the coun­try’s telecom­mu­ni­ca­tions reg­u­la­tor, which has warned that the mo­bile op­er­a­tor could face sanc­tions over un­paid fees.

The com­pany has been given un­til the end of the week to sub­mit a re­sponse to the reg­u­la­tor, Ar­cep, ex­plain­ing why it has not yet paid fre­quency fees for 2016 and 2017, which MTN says are “ex­ces­sive” at $213m.

The com­pany would meet the dead­line, said MTN Benin CEO Stephen Blewett.

Benin has shut down other telecom­mu­ni­ca­tions op­er­a­tors in re­cent months.

Bell Benin Com­mu­ni­ca­tions’ li­cence was with­drawn in Au­gust, while Ar­cep de­clined to re­new the li­cence of Globa­com Benin in Septem­ber.

MTN’s fee in­voices were “very ex­ces­sive”, as they amounted to three-times earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­sa­tion, said Im­tiaz Suli­man, port­fo­lio man­ager at Sen­tio Cap­i­tal.

MTN gen­er­ated R4bn in rev­enue in 2016 in Benin, where it had 4-mil­lion sub­scribers. Its fi­nan­cial state­ments showed that its mar­ket share was 51.6%.

Based on Ar­cep’s re­cent ac­tions, MTN’s li­cence “very well could be re­voked”, said Suli­man. “I’m sure they’ll fight it and use what­ever means and le­gal av­enues they can. But it’s some­thing that’s very tough to ar­gue against.”

Benin and other coun­tries were “play­ing hard­ball”, he said.

“They see these tel­cos [telecom­mu­ni­ca­tions com­pa­nies] as very cash gen­er­a­tive and easy pick­ings,” he said.

Mean­while, MPs in Nige­ria last week said an in­ves­ti­ga­tion re­vealed that MTN had not vi­o­lated the law by repa­tri­at­ing nearly $14bn from the coun­try.

Af­ter MTN Nige­ria was fined $1bn in 2016 for fail­ing to dis­con­nect sub­scribers, this was “a pos­i­tive de­vel­op­ment and a sign that the re­la­tion­ship with the gov­ern­ment is im­prov­ing”, Mer­gence In­vest­ment Man­agers port­fo­lio man­ager Peter Takaen­desa said.

“This is also a pos­i­tive de­vel­op­ment for the Nige­rian gov­ern­ment as far as mar­ket per­cep­tions about its re­la­tion­ship with busi­ness go,” Takaen­desa said.

Telecom­mu­ni­ca­tions reg­u­la­tors in the re­gion were seem­ing to be­come stricter “as they want to as­sert their con­trol over the mar­ket” and also to gen­er­ate ad­di­tional in­come, said Africa Anal­y­sis di­rec­tor Dobek Pater.

In many cases, reg­u­la­tors were is­su­ing fines for con­tra­ven­tions that they had let slide in the past, Pater said.

“In gen­eral, re­la­tion­ships be­tween reg­u­la­tors and op­er­a­tors ap­pear to be co-op­er­a­tive – maybe not cor­dial – and re­spect­ful,” he said.

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