MTN cuts its forecast for Nigerian subscriber growth
MTN Group slashed its full-year forecast for Nigerian subscriber growth by nearly a third on Thursday, raising concern about its ability to fight off competition in its top market and sending its shares sliding.
The company has been fighting to stay in the lead in Nigeria, ahead of competitors such as the United Arab Emirates’ Etisalat, India’s Bharti Airtel and privately owned Nigerian firm Globacom.
It now expects to add 3.5 million users in Nigeria this year from its previous forecast of 5 million.
In total, it has 58.4 million customers in Nigeria, a slight decrease from three months ago.
“That comes as a bit of a surprise. Many participants in the market were looking for a correction in Nigeria,” said Nadim Mohammed, a telecoms industry analyst at First Avenue Investment Management, referring to MTN’s revision to its subscribers forecast.
“You’ve got a very capable regulator in the country now and they are doing the right things to promote competition, better costs to communicate and a better experience for the consumer. I am actually worried,” he added.
Nigerian authorities this year fined MTN and two other operators a combined $4 million (R43.8 million) for poor service and banned them from selling SIM cards.
Its Nigerian user base was also hit after militant Islamist group Boko Haram burnt down radio masts.
MTN’s shares were down 4.6% after it published its trading update. The company reported 2% growth in total users in the three months to end-September, bringing its customer base to 219 million users across its 22 markets in Africa and the Middle East.