South Africa’s MTN Group says it has made a N120 billion (R9 287 million) provision to settle the N1.04 trillion fine on its Nigerian subsidiary, MTN Nigeria for non-registration of 5.2 million subscribers.
MTN disclosed this today while announcing the mobile phone group’s 2015 year end earning amid last month’s payment of N50 billion (approx. US$ 250 million) to the Federal Government of Nigeria as a ‘good faith payment’ towards resolving the fine.
”MTN Nigeria recorded a R9 287 million provision for the fine at the end of the reporting period, negatively impacting the Group Earnings before interest, taxes, depreciation and amortization (EBITDA) by 13,6% and Headline Earnings per Share (HEPS )by 402%” the group said in financial results for the year ended 31 December 2015.
Commenting on the provision,MTN Group Executive Chairman PhuthumaNhleko said: “MTN’s auditors have required that the company make a provision in line with the International Financial Reporting Standards (IFRS). Discussions with the Nigerian authorities continue on the matter.”
In the period under review, MTN Nigeria invested US$94 million in renewing its 2G licenses. It also concluded the acquisition of Visafone Communications.
”These developments, combined with the acquisition of a 4G/LTE licence and digital TV spectrum, highlight MTN’s long term commitment to improving the quality of broadband services, a national priority for the government”, he adds.
On his part, Ferdi Moolman, CEO of MTN Nigeria says that, “we have invested more than US$16bn in Nigeria over the past 15 years and contribute an estimated 4.5% to GDP. We are proud of the fact that we are an integral part of the Nigerian economic and social fabric. We remain committed to the country and our top priorities are to improve network and service quality, as well as data speeds for our customers”.
Moolman says that for the mobile phone company in Nigeria, ”compliance with regulatory requirements also remain a focus. Although subscriber registration is highly complex given limited national identity databases and personal documentation, we remain committed to registering subscribers with the use of improved systems and processes.”
According to him, ”MTN Nigeria is the largest music distributor in Africa and its investments in Mobile Money and Africa Internet Holdings(which houses well-known brands like online retailer Jumia and real estate player Lamudi) provide an exciting platform for the next phase of evolution of the mobile telecoms sector.”
According to Moolman “We have put in place the operating and management structures, as well as made critical investments, to ensure that we improve our competitiveness in 2016.