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MTN gets its Nigerian mobile licence extended as talks continue with the regulator over a $5.2 billion fine

by , 03 November 2015

MTN has been hitting the headlines the past week.

At the beginning of last week, it emerged that the telecoms company was facing a $5.2 billion fine over the disconnection of unregistered subscribers.

This sent its shares falling hard last week.

Yesterday, the JSE temporarily suspended MTN shares from trading as a report emerged suggesting the company had already settled the fine.

Some more positive news emerged this morning as the company has managed to extend its licence for operating in Nigeria.

Let's take a closer look at what's going on…


MTN sees its licence extended until 2021

 
The Nigerian telecoms regulator has “approved the renewal of MTN’s digital mobile licence” just over a week after fining the company some $5.2 billion, says Fin24. The Nigerian regulator issued the licence back in 2001.
 
The licence was due to expire in February next year, but now is valid until 31 August 2021, adds Fin24.
 
The extension to the current licence will cost MTN $94.2 million, says IOL. It’s due for payment by the end of the year.
 
MTN, “which earns 37% of its revenue from Nigeria,” has seen 25% wiped off its share price since the announcement of the fine last week, notes BDLive. But this morning, shares in MTN gained slightly.
 

MTN is trying to reduce the amount of its impending fine

 
MTN is continuing talks with the Nigerian regulator over the fine it’s due to pay on 16 November, reports Bloomberg. Yesterday, the JSE also suspended trade in the company’s shares briefly “to give the company time to communicate with the market and try stem the decline”.
 
At time of writing, shares were trading 0.56% higher at R149.00.
 
Time will tell if MTN manages to successfully negotiate the current fine, which is due for payment in just over two weeks.
 
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MTN gets its Nigerian mobile licence extended as talks continue with the regulator over a $5.2 billion fine
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