Johannesburg - MTN plans to substantially increase capital spending in Nigeria next year after agreeing to settle a $1.7 billion fine in its biggest market.
Africa’s biggest mobile-phone operator will extend 3G coverage to 90 percent of Nigeria in 2017 and start a fibre-network rollout in six cities in the country, the Johannesburg-based company said in a presentation published on its website on Tuesday.
MTN more than doubled its 2016 capital-spending target to R11 billion ($716 million) from R5 billion last year, as uncertainty surrounding the fine lifted, the company said. It didn’t give a specific target for 2017.
MTN agreed to pay a reduced 330 billion naira ($1.7 billion) fine to the Nigerian government last week for missing a deadline to disconnect unregistered subscribers. The agreement was a third of the original penalty of $5.2 billion and will be funded by cash flow from the Nigerian operations, according to a company statement.
MTN shares fell 6 percent to R135.82 as of 4.22pm in Johannesburg, the biggest drop since March 24, after rallying more than 16 percent in two sessions after the fine was settled.
The stock is down 29 percent since the penalty was made public on October 26.
BLOOMBERG