MTN Group subscriber numbers fell during the first quarter as disconnections ordered by the government in Nigeria, its biggest market, curbed the growth of Africa’s largest wireless operator.
MTN’s customer base decreased by 1.4 percent to about 229 million across 22 countries in the three months through March, the Johannesburg-based company said in a statement . The company cut its guidance for the full year to 11.95 million net additions from 12.5 million.
“In order to mitigate any future regulatory challenges, the group took an exceptionally conservative stance by disconnecting all subscribers who could possibly be deemed to be non-compliant,” executive chairman Phuthuma Nhleko said in the statement. “This has had a significant unfavourable impact on total subscriber growth and revenue” in the first quarter.
MTN shares have lost about 23 percent of their value since the company was fined a record $5.2 billion in Nigeria in October for missing a deadline to disconnect subscribers, whom the government had deemed unregistered amid a crackdown on security.
The company is still in negotiations about settling the penalty, which was later reduced to $3.9 billion. Nhleko returned to the company he used to run in November to handle the dispute after Chief Executive Officer Sifiso Dabengwa resigned.
The shares gained 2.8 percent to R148 on Wednesday, valuing the company at R273 billion ($19 billion). The stock has rallied 19 percent since April 6.