MTN suffers profit loss after paying $2.1bn fine to Nigeria

One of Africa’s biggest mobile phone operator, MTN Group, has suffered its first annual loss in revenue projections in two decades, due mainly to a fine imposed on it by the Nigerian telecoms regulatory body, NCC.

This is according to the financial performance report it released on Thursday.

It would be recalled that MTN, in June 2016, agreed to pay a fine of $1.1 billion, reduced from an initial fine of $5.2 billion, after a prolonged legal battle to end a dispute in Nigeria for failing to keep to the deadline to cut off unregistered SIM cards from its network.

The fine on the GSM firm, believed to be the most active but increasingly problematic market holder, said it had made it wipe $768 million from its profit projection, amounting to loss of 500 cents per share in 2016.

Despite the loss, MTN shares rose in value by nearly 10 per cent after the mobile network operator promised that it would pay 700 cents dividend per share .

But the company’s woes in Nigeria, having its biggest customer-base, still persist, with it facing an investigation by Nigerian lawmakers for allegedly repatriating about $14 billion between 2005 and 2016, illegally.

It has denied any wrongdoing amidst recent destruction of its properties by angry youths over the February xenophobic attacks on Nigerians in South Africa .

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Founded in 1994, MTN is seen as one of post-apartheid South Africa’s biggest commercial successes, but clashes with regulators from various countries in recent years is said to have reduced its growth.

The firm said its total subscribers increased by 3.3 percent or 7.7 million to 240 million by December 2016

 

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