The Nigerian Communications Commission (NCC) has approved the renewal and five-year extension of MTN's licences for operating spectrum as it continues to navigate tough times in its biggest market.
This is the first good news MTN has received over the past week, after the same authority slapped a R71 billion fine on MTN Nigeria last Monday, which sent the South African company's stock into a nose-dive.
MTN says the NCC has extended its tenure for the use of the 900MHz and 1 800MHz frequency bands until 31 August 2021. MTN's operating spectrum, which was issued along with its digital mobile licence in 2001, was originally set to expire in February 2016.
MTN will need to pay a sum of $94.2 million (R1.3 billion) for the five-year extension period by no later than 31 December 2015. The deal is also "conditional upon MTN fulfilling all its regulatory obligations". Whether these obligations include the paying of the pending fine remains to be seen.
The latest statement from MTN was released on SENS this morning but made no comment on negotiations between the telco and the NCC in regard to the hefty fine facing the mobile operator for failing to disconnect customers with unregistered SIM cards.
Stock turmoil
MTN's week did not start well after the Johannesburg Stock Exchange (JSE) suspended trading in the stock at 11:23am yesterday, after the share price took a huge hit in morning trade following some speculative news out of Nigeria. The JSE said it had halted trading in MTN shares "pending an announcement from the company".
The stock fell after media reports out of Nigeria alleged MTN had agreed to pay the R71 billion fine in full. The CAJ News Agency reported the mobile operator was unsuccessful in its attempt to have the fine reduced, while Lagos-based Vanguard reported MTN had accepted the fine after discussions with Nigeria's presidency.
MTN did not confirm or deny the acceptance of the fine but released a statement at around 1:30pm yesterday asking shareholders to "specifically exercise caution when reacting to information on this matter which has not been released by the company".
MTN reiterated it was continuing with engagements with the Nigerian authorities and "any material developments in these engagements will be communicated to shareholders through SENS".
Following the announcement, the JSE reopened trading in the stock at around 1:40pm. The stock exchange said it could make no further comment on its reasoning for halting trade in MTN shares.
The JSE could also give no further information on an investigation it opened last week in regard to the timing of the original announcement to the market about the fine.
MTN's stock was trading at around R190 per share last Monday but has fallen nearly 22% since then and closed yesterday at R148.17 a share. The stock recovered slightly this morning on the back of the announcement of the spectrum licence renewal being granted.
The telco giant's market cap now sits at R273.4 billion, after losing around R80 billion in just over a week.
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