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Nigerian market cut our profit by 20%, says  MTN

Nigerian market cut our profit by 20%, says  MTN
February 19
09:30 2016
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MTN Group, South African telecommunications giant, says its full-year profit is expected to fall by at least 20 percent due to its weak performance in the Nigerian market.

MTN, as quoted by Reuters, said the profit warning did not include a $3.9 billion fine imposed Nigerian authorities in 2015 for failing to cut off unregistered SIM card users.

The company added that it is still in talks with Nigerian authorities about the final size of the penalty.

In October 2015, when the Nigerian Communications Commission (NCC), slammed a fine of N1.04 trillion ($5.2 billion) on MTN, the company’s stock fell by 19 percent in one week.

Immediately the fine was handed down, the company experienced over 12 percent decline in its shares for the first time in 17 years on the Johannesburg Stock Exchange (JSE).

Nigerian authorities reviewed the fine to N780 billion, after an infamous typographical error which initially reduced the fine by 35 percent rather than the intended 25 percent.

“The executive chairman, Phuthuma Nhleko, will immediately and urgently re-engage with the Nigerian authorities before responding formally, as it is essential for the company to follow due process to ensure the best outcome,” MTN said after the reduction.

The company however filed a law suit against the NCC over the fine, only to call for an out-of-court settlement.

The case between MTN and the regulator of Nigeria’s telecoms market is expected to continue in court by March.

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