MTN Cuts Subscriber Target as Nigeria Customer Numbers Slide

Africa’s largest wireless operator, MTN group has cut its full-year forecast for subscriber numbers after more than 5 million Nigerian customers were disconnected following the regulator review the process of sim registration by the company.
The company will add 14.8 million net subscribers this year, compared with a previous forecast of 16.75 million, Johannesburg-based MTN said in a statement on Thursday. The carrier’s customer base grew 0.9 percent to 233 million in the three months through September compared with the previous quarter.
MTN, which operates in more than 20 countries across the Middle East and Africa, had 5.1 million subscribers cut off in Nigeria, its biggest market, at the end of August following checks on personal documents. The company is also facing “ongoing regulatory restrictions” related to its market-leading position in Africa’s most populous country, spokesman Nik Kershaw said by phone. About 3.4 million of the customers have been reconnected, the company said.
MTN shares gained 2.4 percent to 186.45 rand as of 3:31 p.m. in Johannesburg, valuing the company at 345 billion rand ($25.2 billion). The stock is down 16 percent this year, compared with a 14 percent gain for Vodacom Group Ltd, its cross-town competitor.
While the loss of Nigerian customers is a short-term setback, “it does point to a tough regulatory environment,” Steve Minnaar, a money-manager at Cape Town-based Abax Investment, said by phone. “They have been struggling with the regulator for many years in the Nigerian environment.”
Customers using contracts in South Africa fell 2.6 percent to 5.2 million, due in part to “low availability of handsets,” MTN said. Total subscriber numbers in Africa’s most industrialized economy gained 2 percent to 29 million, due to a rise in pre-paid customers.

* Bloomberg