From South Sudan to Nigeria and Uganda, the telco is facing challenges that have seen its shares, listed at the Johannesburg Securities Exchange, take a 32 per cent slump since October, after it was slapped with a record $5.2 billion fine in Nigeria.
By ALLAN OLINGO
IN SUMMARY
- From South Sudan to Nigeria and Uganda, the telco is facing challenges that have seen its shares, listed at the Johannesburg Securities Exchange, take a 32 per cent slump since October, after it was slapped with a record $5.2 billion fine in Nigeria.
- The telecommunications firm’s 2015 earnings before interest, tax, depreciation and amortisation (Ebitda) decreased by 8.6 per cent to $3.84 billion as it lost more than 10.4 million subscribers in Nigeria and Uganda alone due to regulatory registration requirements.
- MTN has 231 million subscribers in 22 countries across Africa, Asia and the Middle East. However, Nigeria is its biggest market.
MTN’s 2015 earnings before interest, tax, depreciation and amortisation (Ebitda) decreased by 8.6 per cent to $3.84 billion as it lost more than 10.4 million subscribers in Nigeria and Uganda alone due to regulatory registration requirements. The telco’s group revenue remained flat at $9.49 billion, attributed to a fall in earnings in Nigeria — its biggest African business.From South Sudan to Nigeria and Uganda, the telco is facing challenges that have seen its shares, listed at the Johannesburg Securities Exchange, take a 32 per cent slump since October, after it was slapped with a record $5.2 billion fine in Nigeria.
Last week, its South Sudan unit announced that it had been hard hit by a dollar scarcity and devaluation, forcing it to lay off staff and scale down its operations, which could lead to eventual closure in that market. The MTN head of corporate services in Juba, Khumbulani Dhlomo, confirmed that if the situation didn’t change, MTN would exit the South Sudan market.
“We are going to reduce our workforce by half from the current 170 to 80, with most expatriates’ jobs being taken over by locals. We have also shelved the expansion plans that included the building of 40 towers countrywide,” said Mr Dhlomo.
MTN has in the past two years spent $170 million on network infrastructure but has never made a profit since starting operations in 2012.
“The currency devaluation last year hit us hard because we import most of our equipment, and with the current currency situation we believe we are not in a position to make returns on these investments,” said Mr Dhlomo.
In Uganda, the firm lost 3.7 million subscribers last year, decreasing its market share after a forcible deregistration by the Uganda Communications Commission.
In November, Brian Gouldie, the chief executive officer of MTN Uganda, said that they had switched off 300,000 subscribers who had not taken part in the Sim card registration process, a far cry from the 3.7 million figure the parent company issued in its full year report in March.
“We have deactivated 300,000 Sim cards that had not been registered. We have at least 11.4 million subscribers who are both partially and fully registered,” said Mr Gouldie.
The Uganda Communications Commission had given telecom companies up to November 30, 2015 to switch off unregistered Sim cards in order to avoid being fined, which means that the more than 3.4 million subscribers could have been forcibly switched off.
In Nigeria, the country’s House of Representatives is considering tripling the fine the telecom was slapped with by the Nigeria Communications Commission in October last year.
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