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Friday, 5 August 2016

MTN BLames NCC as They Posts First -Ever Loss After NCC Fine



South Africa’s MTN Group has reported its first-ever per-share loss as a public company, after Africa’s biggest mobile-phone operator agreed to settle a record fine in Nigeria and was hurt by weaker earnings in South Africa.

According to Bloomberg, the loss will be between 2.85 rand and 3.15 rand per share in the six months through June, the Johannesburg-based company said in a statement yesterday.

The so-called headline figure, which excludes one-time items, will be a loss of between 2.55 rand and 2.85 rand per share.
The biggest contributor to the decline was MTN’s agreement to pay a record N330 billion ($1 billion) fine in Nigeria, the company’s largest market. The penalty was levied in October after MTN missed a deadline to disconnect unregistered subscribers, and the subsequent loss of customers further hurt operations in the country.

“MTN pushed the value of the entire fine onto the income statement,” Byron Lotter, a money manager at Vestact Ltd., which holds MTN stock, said by phone. “This is a once-off and expectations are that they will recover in the next year.”

The shares fell as much as 4.3 percent in early trading in Johannesburg, the most since June 27, and recovered to trade 0.1 percent higher at 132.70 rand as of 10:24 a.m. local time.

The stock lost as much as a third of its value after the fine was levied in October and is still 30 percent below its level when the penalty was announced.

The South African business, the company’s no. 2 market, is expected to report a decline in earnings before interest, taxes, depreciation and amortisation (EBITDA) margin for the half-year period, MTN said.
Losses from mobile-phone towers and digital businesses also contributed to the first-half performance, as did the foreign-exchange impact of weaker operating currencies against the US dollar.

Turning around the Nigeria business will be a top priority for incoming Chief Executive Officer Rob Shuter, who will join the company from Vodafone Group Plc by July 1, 2017.

“MTN still has a lot to do and it will be all about implementation,” Lotter said. “That’s up to management. Vestact is very excited about the company’s new management team.”

On the local front, MTN Nigeria’s subsidiary, Visafone, yesterday announced that it had begun the test-run of its 4G LTE (fourth generation long term evolution) internet technology service for smartphone users.
The launch of the 4G LTE service by the merged entity of MTN and Visafone is expected to rollout superior high-speed internet service in major cities, empowering Nigerians with the latest mobile broadband technology.
It is also expected to drive broadband penetration in the country from the current 10 per cent to the targeted 30 per cent by 2018, in line with the federal government’s plan.

According to MTN Nigeria executive, Amina Oyagbola, “The company is determined to deepen broadband penetration in the country. Our recent licence acquisition further demonstrates our faith in the future of Nigeria.

“We believe in supporting the positive transformation of Nigeria and we have demonstrated this belief through the level of our investment since 2001, which currently stands at approximately $16 billion.”
Speaking to the specifics of the test-run and subsequent launch, General Manager, Consumer Marketing, MTN Nigeria, Richard Iweanoge, disclosed that the 4G LTE technology would be launched with the sole objective of providing Nigerians with the best, fastest and most competitive ICT services for all stakeholders.

“We are pleased to set the pace once again as we break new boundaries with this test run, which will be available for now for our Visafone customers, who are provisioned on the 800Mhz band.

“When we roll-out fully, especially with our 2.6Ghz spectrum, the launch will help to enhance customer experience for our over 60 million subscribers, while ensuring greater coverage, access, affordability and ultimately a smart lifestyle for everyone,” Iweanoge said.

In order to be fully prepared for the 4G LTE rollout, MTN bought the 800MHz spectrum from the Nigerian Broadcasting Commission (NBC), and later bid for the 2.6GHz spectrum licence in February this year, emerging winner of six slots of the 2.6GHz spectrum.

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