Johannesburg - MTN Group [JSE:MTN] plans to substantially increase capital spending in Nigeria next year after agreeing to settle a $1.7bn fine in its biggest market.
Africa’s biggest mobile-phone operator will extend 3G coverage to 90% of Nigeria in 2017 and start a fibre-network roll-out in six cities in the country, the Johannesburg-based company said in a presentation published on its website on Tuesday.
MTN more than doubled its 2016 capital-spending target to R11bn ($716m) from R5bn last year, as uncertainty surrounding the fine lifted, the company said. It didn’t give a specific target for 2017.
MTN agreed to pay a reduced 330bn naira ($1.7 billion) fine to the Nigerian government last week for missing a deadline to disconnect unregistered subscribers. The agreement was a third of the original penalty of $5.2bn and will be funded by cash flow from the Nigerian operations, according to a company statement.
MTN shares fell 6% to R135.82 just after 16:00 in Johannesburg on Tuesday, the biggest drop since March 24, after rallying more than 16% in two sessions after the fine was settled. The stock is down 29% since the penalty was made public on October 26.