Shares in mobile operator, MTN, declined as much as 12.49% to R167 after on Monday, after the Nigerian Communications Commission imposed a fine of $5.2 billion\u00a0 (R71 billion) on its operation in Nigeria.<\/p>\n
MTN lost nearly R24 rand, on the Johannesburg Stock Exchange, its biggest single day loss since 1998 according to Bloomberg, taking the group’s market cap down to R308 billion.<\/p>\n
The fine relates to the timing of the disconnection of 5.1-million MTN Nigerian subscribers in August and September 2015.<\/p>\n
MTN released the following statement on Monday:<\/p>\n
Shareholders are advised that the NCC has imposed a fine equivalent to US$5.2 billion on MTN Nigeria.<\/p>\n
This fine relates to the timing of the disconnection of 5.1 million MTN Nigeria subscribers who were disconnected in August and September 2015 and is based on a fine of N200, 000 for each unregistered subscriber.<\/p>\n
MTN Nigeria is currently in discussions with the NCC to resolve the matter in recognition of the circumstances that prevailed with regard to these subscribers.<\/p><\/blockquote>\n
Analyst at\u00a0Momentum Asset Management, Wayne McCurrie told Bloomberg that the fine \u201cis way, way higher than the profits they\u2019re going to make from Nigeria for many years to come”.<\/p>\n
\u201cThat fine is totally and utterly out of proportion to whatever regulation they are contravening, if any.\u00a0That\u2019s an astonishing amount of money.\u201d<\/p>\n
MTN, which connects approximately 233 million people in 22 countries across Africa and the Middle East, has its biggest market in Nigeria, with a subscriber base of\u00a0 62.5 million.<\/p>\n
In a quarterly update last week, Africa’s biggest operator reported that MTN Nigeria recorded a marginal decline in subscribers “mainly as a result of the disconnection of 5.1 million subscribers at the end of August 2015 in line with industry-wide regulatory registration requirements”.<\/p>\n
“While management continues to engage with the regulator, performance continues to be impacted by ongoing regulatory restrictions,” MTN said.<\/p>\n
More on MTN<\/h3>\n
MTN hit with R71 billion fine<\/a><\/strong><\/p>\n
MTN grows its customer base in South Africa<\/a><\/strong><\/p>\n