MTN Slides About 8% After New Sim Rules in Nigeria

MTC Communications billboard showing MTN Logo

The Nigerian Communications Commission (NCC) instructed mobile providers in the country to impose limitations on outbound calls for users whose Sims are not connected to national identity numbers, causing MTN Group’s share price to drop over 8% on the Johannesburg Stock Exchange or JSE.

MTN’s stock, on the other hand, recovered some of its lost territory on Wednesday, closing almost 4% higher in afternoon trade.

Following the NCC’s guidelines, MTN Nigeria would be compelled to implement a gradual suspension of services for nearly 20 million non-compliant subscribers, who have been on ‘receive only’ status since Monday, April 4.

MTN stated that network services would continue to be available to subscribers who have complied with the new standards as well as those who have not yet submitted their NINs.

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Sens said in a statement that the new laws will help Nigerian officials develop a stable and durable national identity management system, which will benefit not only the telecommunications business but the whole country.

“On an annualised basis, outgoing voice income from current users who have not filed a NIN equates to around 9% of MTN Nigeria’s total FY 2021 service revenue,” MTN states.

“On an annualised basis, this would equal to about 3% of MTN Group’s FY 2021 service revenue,” it says.

To help the government’s efforts and provide customers the option to comply with the new laws, the network operator claims it has placed approximately 4 200 points of enrolment around the nation.

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The company also said that on Friday, April 8, it would update its investors on the latest developments surrounding the NCC guidelines, as well as provide specifics on its deployment plans and timetables for completing the registration of suspended users.

Ahead of MTN’s call with investors later this week, Goldstuck says it will be important for MTN to not only map out its plans for handling this issue to investors, they should also provide a breakdown of who exactly these users are.

“Perhaps they should give a clear picture of just what kind of user base these suspended subscribers represent, in other words, if they are low-spending subscribers, they should actually show the average revenue per user comparison between the suspended subscribers prior to their suspension and those who are still fully on board, that will be a very telling statistics,” he says.

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