MTN secures West Africa licences - TechCentral

MTN secures West Africa licences

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South Africa’s MTN Group has secured two important licences in West Africa, one in Ghana and the other in Côte d’Ivoire, at a combined cost of R3,5bn.

The group said it has secured a 15-year 4G/LTE licence in the 800MHz “digital dividend” spectrum band in Ghana for a purchase consideration of US$67,5m (R1bn).

“The National Communications Authority of Ghana will award the licence and spectrum to MTN Ghana once the licence fee has been paid,” MTN said in a statement issued via the JSE’s stock exchange news service.

However, MTN Ghana is required to have a minimum of 35% Ghanaian ownership in place within 13 months from the effective date of the licence being awarded.

“As a group which owes its founding and growth to the emerging world, MTN is committed to the growth of local economies and development of communities where it operates. Consequently, MTN is exploring various options to comply with the eligibility criteria,” it said.

“The award of this licence will enable MTN Ghana to launch 4G/LTE services to support the increasing demand of data services and improve customers’ data usage experience,” it said.

MTN Ghana surpassed 15m subscribers at the end of the third quarter of 2015, while data revenue increased by 78,6% year on year for the nine-month period ended 30 September 2015, contributing 28,7% to total revenue.

Previously, MTN Ghana was only able to provide 2G and 3G services (voice and data) to its customers using 900MHz, 1,8GHz and 2,1GHz spectrum, which cannot be extended for 4G/LTE technology due to licence restrictions, the group said.

In the financial year ended 31 December 2014, MTN Ghana reported R2,7bn in earnings before interest, tax, depreciation and amortisation (Ebitda) on revenues of R7,1bn.

Meanwhile, in Côte d’Ivoire, MTN has made partial payment of 75% for a new unified telecommunications licence. The total licence fee is CFA100bn, or R2,5bn.

“By paying 75%, which is above the required 50% minimum, MTN Côte d’Ivoire obtains the extension of the operating term of the unified license for 17 years, for commissioning all services and products associated with 2G/3G/4G/LTE and upcoming new technologies,” the group said in a media statement.

In the 2014 financial year, MTN Côte d’Ivoire generated R2,5bn in Ebitda on revenues of R6,4bn.

The market has responded well to news of the new licences. MTN’s share price was last trading up by almost 6% in mid-morning trade on the JSE on Thursday, at R137,57/share.

The counter has, however, come under severe selling pressure in recent months on the news of a $5,2bn fine in Nigeria, which has since been reduced to $3,9bn. In the past three months, MTN’s share price has fallen by 37%. Over 12 months, it has declined by 42%.  — (c) 2015 NewsCentral Media

2 Comments

  1. Hopefully, for shareholders, MTN will adhere to good corporate governance in these countries and avoid unnecessary penalties.

  2. I with them all the luck doing business in Côte d’Ivoire.
    Corruption in that place makes our government look like a bunch of kids stealing each others lunch money.