The Nigerian telecoms regulator slaps a $5.2 billion fine on MTN
Shares in MTN [JSE:MTN]
continue to ebb lower after news emerged on Monday that the Nigerian communications regulator is slapping a multibillion dollar fine on the telecoms company.
MTN is facing a fine due to the “timing of the disconnection of 5.1 million MTN Nigeria subscribers, who were disconnected in August and September” of this year, says BDLive
. The regulator is imposing a 200,000 naira fine for each subscriber with MTN who was unregistered at the time.
Reports suggest that MTN is trying to revoke the fine or have it reduced, says Fin24
. A source close to the matter said “there was bit of misunderstanding around this issue”.
The source said that MTN thought it could “carry on business as usual” as discussions continued with the regulator, adds Fin24
Shareholders of MTN have been quick to sell their holdings in the face of a $5.2 billion fine.
The fine is currently the equivalent of two years’ worth of profits, notes IOL
. And Nigeria is currently MTN’s “biggest market by subscribers”.
MTN shares have continued to fall since Monday
Yesterday, trading volumes of the telecoms company hit a five year high as investors sold their holdings, says Bloomberg
. R4.97 billion worth of MTN shares traded.
Analysts with Vestact believe that MTN shares are going to remain under pressure due to the fine and because MTN needs “its licence renewed next year in Nigeria,” notes BDLive
. MTN shareholders who have decided to hold on will be wondering how far the shares can fall.
At time of writing, shares were trading 1.87% lower at R156.99.
Time will tell if MTN can revoke or reduce the fine. It will be an anxious wait for shareholders.
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