MTN gets another 10 years to operate in Nigeria
MTN Nigeria has secured another 10 years in the West African country as the telecoms regulator renewed its operating licence, the group’s largest earner said on Wednesday.
MTN said the Nigerian Communications Commission renewed its operating and spectrum licences for another decade, effective from September 1, after they expired on August 31, resulting in the group having to pay additional fees.
“Renewing our licences for another 10 years is very important to our business and enables us to continue to provide services to ensure the benefits of a modern connected life for our people,” said MTN Nigeria CEO Karl Toriola . MTN, which has a market value of R236bn, is the
West African country’s largest mobile operator, having rapidly grown its customer base since launching there in 1998, competing with firms such as Airtel, Globacom and 9Mobile.
Nigeria is the group’s largest market and accounts for a third of its revenue.
By the end of the half-year to June, MTN had a total of 277million customers, spread across 21 markets in Africa and the Middle East. It is Africa’s largest mobile operator by subscribers.
During the period the group reported service revenue rose 19.7% to R81.9bn, led by growth of 9.3% in MTN SA, 23.8% in MTN Nigeria and 25.5% in MTN Ghana. Data revenues surged by a third, thanks to a 56.4% increase in usage.
Though making the largest chunk of its money from Nigeria, the country has proven at times to be a difficult environment in which to operate. MTN, whose share price has more than doubled since the start of the year, has been working to reduce its group debt, after years of struggling to get money out of countries such as Iran and Nigeria. Things are, however, looking more positive on this front.
In the half-year, the group cut its borrowings to R36.7bn. As a ratio to equity, this has come down to 1.4, ahead of guidance of 1.5. MTN was helped by cash inflows of R9.3bn, including R4bn from Nigeria.
In 2015, MTN was infamously slapped with a $1bn fine by Nigeria’s government for not “deregistering SIM cards”— an administrative bungle that cost then-CEO Sifiso Dabengwa his job. MTN managed to negotiate on the original fine of $5.2bn.
In recent months, pay-TV operator MultiChoice has also felt the wrath of Nigerian authorities over a disputed $4.38bn tax bill. Despite these setbacks, MTN has made efforts to maintain its place in the country, which is likely to grow in importance as the group announced last year its departure from the Middle East to focus on its African units.