Mobile operator MTN Group (MTN) continued its slide in afternoon trade on the JSE as the news that it could face a lawsuit in the US from Turkish operator, TurkCell, continued to weigh.
The group advised late Thursday (February 2, 2011) that Turkcell, which was unsuccessful in attaining the second GSM telecommunications licence in Iran, is looking to bring a case against MTN in a US court.
Turkcell claimes that MTN bribed Iranian and South African officials to secure the cellphone network licence in Iran.
At the opening bell on Friday, shares in MTN declined 4.4% to R132.21, before regaining some value, however by 15:00 on Monday, the group shipped a further R3.18 or 2.34% to R132.81.
An analyst at Thebe Stockbroking told BusinessTech: “MTN’s stock continues to be hit by the news of bribery allegations.”
An analyst at financial services group PSG Konsult added however, that MTN could expect good support at R130, with many of the current concerns already priced into the group’s shares.
MTN dismissed the allegations as having no legal merit, but current sanctions imposed on Iran by the US and Britain, along with civil unrest in Nigeria also continues to sway investor sentiment.
Nigeria is MTN’s largest territory in terms of subscribers at 41.107 million, while in Iran, through a 49% holding in Iran Cell, the group boasts 33.314 million subscribers and a 44% market share. For the quarter ended September 2011, MTN Group recorded 158.59 million subscribers.
With the JSE all-share index down marginally by 0.25% to 34,300 points, Rival groups Vodacom (VOD) slipped 99 cents to R101.21 and Telkom (TKG) dropped 63 cents or 2.12% to R29.06.
Allied Electronics Corporation Limited (Altron) waivered 87 cents or 3.55% to R23.62, with in excess of R400,000 being sold off on Monday.