MTN suffers decline profitability, records 16m subscribers loss in Nigeria

Wole Tokede

MTN’s SIM registration saga in Nigeria has impacted negatively on the overall performance of the company as it had to deregister about 16.1 million subscribers representing seven per cent of its current 230.3 million subscribers in its countries of operation.

The company told shareholders on Wednesday that as at April 30 2016, the group only increased its subscriber base by just 1 per cent to 230.3 million year-on-year across Africa and the Middle East.

“This was largely impacted by the 7 per cent decline in subscribers in MTN Nigeria and the 11 per cent decline in MTN Uganda, mainly as a result of the non-compliant subscriber deregistration process in these countries which was only completed in quarter one of 2016,” said MTN,”.

In March, MTN reported a 51 per cent drop in full-year profit amid the Nigerian fine. According to reports, the decline in MTN’s share price has resulted in rival Vodacom becoming the biggest telecoms operator in Africa by market capitalisation this year.

Nigeria has been pushing telecoms firms operating in the country to verify the identity of subscribers amid worries that unregistered SIM cards were being used for criminal activity especially by the Islamic militant group Boko Haram.  The company was said to have not fully complied with the directive, hence the fine.

It will be recalled that the Nigerian Communication Commission (NCC) imposed a fine of $5.2 billion on MTN after the mobile network failed to disconnect 5.2-million unregistered SIM cards in a timely manner. The regulator subsequently reduced the fine to $3.9-billion.

As part of its shareholders earlier today ahead of its annual general meeting, it said that it was still engaging Nigerian on the imposed fine. “We continue our engagement with the Nigerian authorities and are awaiting feedback. “We remain optimistic on reaching a conclusion on this matter in the short term. We will continuously monitor developments with regards to the Nigerian fine and will review the adequacy of the provision at the end of the reporting period”.