Massive Nigerian fine sucks up half MTN profit

MTN Group’s 2015 financial results reflects the challenging operating environment the business experienced in the year. Weak macro-economic conditions, increased market competition, heightened regulatory pressures, notably in Nigeria, and operational challenges in some of its markets.

But MTN is the continent's biggest mobile network as it operates across 22 countries in Africa and the Middle East and Executive Chairman of the MTN Group Phutuma Nhleko says despite the challenges they are getting on with day to day operations.

We have 21 operations, and close to 240 million subscribers, and those people expect to continue getting service. Life continues.

Phutuma Nhleko, MTN Group Executive Chairman

Nhleko says they have a team working on issues around the fine but for the rest its business as usual.

I have tried to enlighten people as to how complex the regulation process is in Nigeria and the only way I found to describe it is it is like trying to be an operator and create a Department of Home Affairs at the same time.

Phutuma Nhleko, MTN Group Executive Chairman

Having said that, could we have done certain things differently? The answer is absolutely yes.

Phutuma Nhleko, MTN Group Executive Chairman

MTN is engaged in a process with the courts in Nigeria and is following all the procedures set out, including paying the hefty goodwill deposit. They are hoping to reach a settlement on the date set down by the court of March 18.

Nhleko says Nigeria is a challenging environment with its high oil prices and resulting strains and tensions. But he says they have been through good and bad times and though they are going through a turbulent time at the moment they do not intend to bail.

We have been there for a long time and we intend to stay. You don't just up and go. You resolve your problems.

Phutuma Nhleko, MTN Group Executive Chairman

Nigeria remains the biggest business in the MTN stable and they have invested 15 billiondollars in capex there. They are an important player in the infrastrucure of a country which went straight from 600 000 fixed line users to 120 million mobile users. The MTN network is an integral part of the entire commerce in Nigeria.

On the question of fraud allegations made by forensic investigator Dr David Klatzow about a dossier of around 150 clients who are suggesting there is a conspiracy between people working at FNB and people working at MTN to hijack sim cards and one time pins to gain access to accounts and large amounts of money, Nhleko is clear.

I do not think we should be pointing fingers at this stage, until we have got to the bottom of what has happened. But I don't think cyber crime is something that would be unique to MTN or FNB.

Phutuma Nhleko, MTN Group Executive Chairman

It needs to be dealt with speedily and robustly, he says, and MTN will do everything in its power to help bring any guilty parties or syndicates to book.


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