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MTN scrambles to contain investor apprehension from Nigerian regulatory directive

MTN says the subscribers whose SIM cards were not registered using National Identification Numbers in Nigeria amounted to about a third of its Nigerian network users, accounting for 3 percent of its group revenues. Picture: Bloomberg.

MTN says the subscribers whose SIM cards were not registered using National Identification Numbers in Nigeria amounted to about a third of its Nigerian network users, accounting for 3 percent of its group revenues. Picture: Bloomberg.

Published Apr 7, 2022

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TELECOMS giant MTN is scrambling to re-assure investors that the financial impact from a Nigerian regulatory directive to freeze outgoing calls from SIM cards not registered using national identity numbers will be less severe.

This is the second time that MTN has faced regulatory issues over unregistered network users in Nigeria as it has previously been fined a hefty fee for failure to disconnect non-registered network users. The latest directive, issued April 4, saw MTN’s share price on the JSE fall by 7.7 percent in intraday trade.

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Yesterday, MTN said via a JSE SENS announcement that the subscribers whose SIM cards were not registered using National Identification Numbers (NINs) amounted to about a third of its Nigerian network users, accounting for 3 percent of its group revenues.

It also said that it would hold an investor conference to explain the circumstances and impact of the Nigerian regulatory directive on April 8, as it battled to contain potential investor apprehension from the issue.

“Outgoing voice revenue from the current subscribers who have not submitted a NIN, amounts to about 9 percent of MTN Nigeria’s total full year 2021 service revenue on an annualised basis. For MTN Group, this would amount to approximately 3 percent of FY 2021 (full year) service revenue on an annualised basis,” MTN said.

This helped abet the plunge in the company’s share price, which by afternoon trade on Wednesday had firmed by 4.11 percent at R180.7. Its rival operators in Nigeria have also had to comply with the directive from the Nigerian Communications Commission.

As many as 73 million subscribers have been affected across the four main operators – that include Airtel and Glo – and sparked a scramble to register at registration centres, some organised by the mobile operators.

“In line with operating licence requirements, MTN Nigeria has complied with the directive and implemented the restrictions on only outgoing voice calls of affected subscribers,” MTN said.

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While there were bitter disputes over the previous fining of MTN for failure to disconnect unregistered users, the South African incorporated and pan African focused mobile operator said it was supportive of “the work being done by the Federal Government of Nigeria to build a reliable and sustainable National Identity Management system”.

It described this as “a critical enabler that will deliver multiple benefits to the telecoms industry and Nigeria” as a whole through enhancing security and governance.

MTN reported that about 47 million subscribers on its Nigerian network had already submitted their national identity numbers for integration with their SIM cards as at the end of March. This represented 67 percent of its subscriber base.

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Banking and capital markets expert, Taku Chimedza, said those disconnected “still need cellphones and so many of the barred customers will return” to revenue contribution after completing the registration process.

However, he said while MTN Nigeria’s share price had firmed by 1 percent on Tuesday, sentiment towards the volatility hobbling the group had been reflected in its share price plunge on the JSE on the same day.

“A core difference between investors in MTN Nigeria vs. MTN Group is that the former aren’t worried about repatriation of funds. This is becoming a concern again in Nigeria and may have been a contributor to a souring of sentiment towards MTN.”

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MTN, facing regulatory scrutiny in the west African country, listed in Nigeria in 2019. Government officials said at the time that “Nigerians will be empowered to control, own and manage one of dominant telecommunications companies in the country” through the stock exchange listing.

BUSINESS REPORT ONLINE

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