MTN Group Limited’s subscriber numbers
fell during the first quarter as disconnections ordered by the
government in Nigeria, its biggest market, curbed the growth of Africa’s
largest wireless operator.
MTN’s customer base decreased by 1.4 per
cent to about 229 million across 22 countries in the three months
through March, compared with the previous quarter, the
Johannesburg-based company said in a statement on Thursday. The company
cut its guidance for the full year to 11.95 million net additions from
12.5 million.
“In order to mitigate any future
regulatory challenges, the group took an exceptionally conservative
stance by disconnecting all subscribers who could possibly be deemed to
be non-compliant,” Bloomberg quoted its Executive Chairman, Phuthuma
Nhleko to have said in the statement.
“This has had a significant unfavorable impact on total subscriber growth and revenue” in the first quarter.
MTN was fined a record $5.2 billion in
Nigeria last year for missing a deadline to disconnect subscribers, whom
the government had deemed unregistered amid a crackdown on security.
The company is still in negotiations about settling the penalty, which
was later reduced to $3.9 billion. Nhleko returned to the company he
used to run in November to handle the dispute after Chief Executive
Officer Sifiso Dabengwa resigned.
The shares declined as much as 2.7 per
cent before reversing to trade 2.2 percent higher at 151.11 rand by 9:29
a.m. in Johannesburg, valuing the company at 277 billion rand ($19
billion). The stock has lost about 21 percent of its value since the
Nigeria penalty was announced in October.
“We expected a drop in subscribers in
Nigeria during the first quarter, even though the drop was bigger than
expected,” Arqaam Capital analyst Tibor Bokor said by phone from Dubai.
“We expect that numbers in Nigeria will improve during the second
quarter, as the political landscape has changed in the country.”
MTN Nigeria subscribers decreased by 6.9
percent after 4.5 million customers were disconnected in February. In
South Africa, the company’s second-largest market, customer numbers fell
by 1.7 percent.
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