MTN registered an overall loss in 2016 which it attributed in large part to the $1 billion fine it received from the Nigerian government.
The pan-African group has also faced problems in its home market of South Africa, prompting the operator to state that it will likely be in the red when it reveals its official financial results on March 2nd. MTN will issue a further trading statement when the details of the loss become clearer.
The group’s troubles in Nigeria were well-documented over the past year. It is the country’s largest operator, but was issued with a $5.2 billion fine after failing to comply with security regulation requiring it to disconnect unregistered SIM cards as part of a drive to tackle crime. After extensive negotiations, this sum was lowered to $1.67 billion.
MTN’s Nigerian and South African units both reportedly underperformed in the first half of the year, with 4.5 million MTN Nigeria subscribers being disconnected in February 2016 after the introduction of new registration laws in the country. The devalued naira and slowing Nigerian economy also adversely affected its business, along with fees associated with a planned stock listing.
The entire debacle led to the resignation of CEO Sifiso Dabengwa, who was succeeded on an interim basis by group chairman Phutuma Nheklo. MTN has now selected Rob Shuter to take the position of CEO on a permanent basis, and he will begin next month.
Additionally, MTN’s problems in Nigeria are not consigned to the past – the group is currently under investigation over allegations that it illegally repatriated $14 billion out of the country over ten years.