Telecom giant may list on NSE as earnings plunge

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March 4, 2016 4:21 PM

This follows the company's headline earnings falling by 51 percent in the last year, weighed down by $600 million it put aside to cover a huge fine imposed by the Nigeria Communications Commission (NCC).

Phuthuma Nhleko (L), CEO of MTN group, addresses a news conference in a file photo. REUTERS/Aladin Abdel Naby

Phuthuma Nhleko, executive chairman of South Africa-based telecoms giant MTN Group, says the company may list its Nigerian unit on the Nigeria Stock Exchange (NSE) in Lagos once it has resolved the disputed $3.9 billion fine with authorities in Nigeria.

This follows the company's headline earnings falling by 51 percent in the last year, weighed down by $600 million it put aside to cover a huge fine imposed by the Nigeria Communications Commission (NCC).

But without counting the fine, earnings were down 14 percent, Nhleko said, according to Nigeria CommunicationsWeek.

MTN’s Nigeria subsidiary was hit with a $3.9 billion penalty in October 2015 for failure to disconnect 5.1 million unregistered SIM cards.

The company announced that it had made provision of 9.2 billion rand ($594 million) toward the fine. It has already paid out $250 million to the Nigerian government as it tries to negotiate a settlement.

The company also withdrew its legal challenge over the fine in a Lagos High Court, to enable the two parties to try to reach a settlement.

“We are working as urgently as we can to get an amicable solution of this matter,” said Nhleko.

Nigerian authorities had ordered unregistered SIM cards to be deactivated for security reasons, as the country battles Boko Haram Islamists as well as criminality, especially kidnapping for ransom.

Nigeria is Africa’s most populous country and MTN’s largest market, where it now has 61.3 million subscribers.

The MTN chairman said 2015 was “an exceptionally difficult year for the company — I will probably say the most difficult year it has ever experienced in its 21-year history”.

In 2015, MTN had to disconnect 10 million subscribers — 6.7 million of which was in Nigeria and 3.7 million in Uganda.

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