MTN shares chalked up some gains on Wednesday after wiping off more than R80 billion in the past week on its market value. By Gugu Lourie
The stock has been hard hit by skittish investors who were worried about a Nigerian proposed R71 billion fine, which is due to be paid by the South African-based mobile phone operator by 16 November 2015 if a settlement is not reached.
The stock gained 3.61% at R161.15 by 12:31pm on Wednesday, giving it a market capitalisation of R288 billion.
MTN is still in discussion with the Nigerian authorities over the proposed fine.
“MTN wishes to clarify and place on record that the company continues to engage constructively with Nigerian authorities at all levels,” MTN inform shareholders on Tuesday afternoon.
Furthermore, the Nigerian telecoms watchdog on Tuesday renewed the mobile phone operator’s licence until 31 August 2021.
The Nigerian Communications Commission has approved the renewal,and extension of the tenure of MTN’s operating spectrum in the 900MHz and 1800MHz frequency bands.
The South Africa-based operator would pay $94,2 million (R1.3 billion) as a spectrum fee for the 5-year extension period by no later than 31 December 2015 and conditional upon MTN fulfilling all its regulatory obligations.
MTN told shareholders last week Monday that “the NCC has imposed a fine equivalent to $5.2 billion (R71 billion) on MTN Nigeria”.
“This fine relates to the timing of the disconnection of 5.1 million MTN Nigeria subscribers who were disconnected in August and September 2015 and is based on a fine of N200 000 for each unregistered subscriber,” said the company.
Last month, MTN Nigeria recorded a marginal decline in its subscriber base to 62,5 million subscribers, due to the disconnection of 5,1 million subscribers at the end of August 2015 in line with industry-wide regulatory registration requirements. To date, 3,4 million of these subscribers have been reconnected.