- Softlanding for telecoms coy on the card
Presidents of Africa’s two biggest economies are expected to discuss MTN’s $5.2 billion fine in Johannesburg this week.
President Jacob Zuma and his Nigerian counterpart Muhammadu Buhari are expected to meet and discuss the fine along the sidelines of the Forum of China-Africa Co- operation, the South Africa’s Sunday Times, said.
The event takes place on December 4-5 at the Sandton Convention Centre.
Meanwhile, the expected meeting between the two heads of state comes after Nigeria’s communications technology minister Adebayo Shittu said that Buhari will decide on MTN’s fate regarding the fine.
The Nigerian Communications Commission, NCC, fined MTN $5.2 billion for failing to disconnect five million unregistered SIM cards in a timely manner.
Nigeria’s SIM card registration process is designed to curb terror and criminal threats in the country.
The fine – which Denmark-based Strand Consult said is the biggest of its kind in history – has rattled the South African headquartered MTN whose share price shed about fifth of its value amid the penalty.
MTN’s group chief executive officer Sifiso Dabengwa subsequently quit while the company’s former CEO Phuthuma Nhleko was then appointed as executive chairperson and tasked with tackling the fine.
Talks between MTN and the NCC regarding the fine are said to be ongoing with Nhleko having visited Nigeria.
Momentum Wealth analyst Wayne McCurrie expected MTN to postpone capital expenditure or reduce its dividend to pay the fine in its entirety. “They would have to raise more debt and they might have to do a share issue to pay that off.”
McCurrie said that even if MTN had listed in Nigeria, which provides nearly 40% of the company’s profits, the fine would have been the same because the regulator operated independently of the exchange.
Since the fine was announced on October 23, MTN’s stock has shed 22%, compared with a 2.5% fall in the JSE All Share index over the same period.
Head of equities at JM Busha Asset Managers, Farai Mapfinya said: “There are some who [say] MTN has made a lot of money out of Nigerians with nothing among the locals to show for that success.”
CEO of [email protected], Dianna Games and a frequent Nigeria commentator, said: “Had MTN been listed it would have symbolically positioned MTN differently in Nigeria – there’d be less of a sense from Nigerians that they’d been exploited in some way.”
The Johannesburg Stock Exchange, JSE, is also investigating MTN for how it announced its fine to shareholders.