MTN to comply with Benin demand
The company has been given until the end of the week to submit a response to the regulator, Arcep, explaining why it has not yet paid frequency fees for 2016 and 2017, which MTN says are "excessive" at $213m.
The company would meet the deadline, said MTN Benin CEO Stephen Blewett.
Benin has shut down other telecommunications operators in recent months. Bell Benin Communications’ licence was withdrawn in August, while Arcep declined to renew the licence of Globacom Benin in September.
MTN’s fee invoices were "very excessive", as they amounted to three-times earnings before interest, taxes, depreciation and amortisation, said Imtiaz Suliman, portfolio manager at Sentio Capital. MTN generated R4bn in revenue in 2016 in Benin, where it had 4-million subscribers. Its financial statements showed that its market share was 51.6%.
Based on Arcep’s recent actions, MTN’s licence "very well could be revoked", said Suliman. "I’m sure they’ll fight it and use whatever means and legal avenues they can. But it’s something that’s very tough to argue against." Benin and other countries were "playing hardball", he said. "They see these telcos [telecommunications companies] as very cash generative and easy pickings," he said.
Meanwhile, MPs in Nigeria last week said an investigation revealed that MTN had not violated the law by repatriating nearly $14bn from the country. After MTN Nigeria was fined $1bn in 2016 for failing to disconnect subscribers, this was "a positive development and a sign that the relationship with the government is improving", Mergence Investment Managers portfolio manager Peter Takaendesa said. "This is also a positive development for the Nigerian government as far as market perceptions about its relationship with business go," Takaendesa said.
Telecommunications regulators in the region were seeming to become stricter "as they want to assert their control over the market" and also to generate additional income, said Africa Analysis director Dobek Pater. In many cases, regulators were issuing fines for contraventions that they had let slide in the past, Pater said. "In general, relationships between regulators and operators appear to be co-operative – maybe not cordial – and respectful," he said.
Source: Business Day