The Group's Nigerian business failed to disconnect unregistered subscribers before the given deadline prompting the Nigerian Communication Commission (NCC) to impose the maximum penalty per user after the cut off date equating to a fine of $5.2 billion.
Considering that Nigeria represents a hefty size of the Group's total profit and revenue, the company was backed into a corner with the range of options it could employ to eliminate the harshness of the penalty that would put a dent in the future outlook by heeding to the demands of the Nigerian government.
Of course government took this into account when they participated in negotiations given the horrid year they've experienced after attaining progressive and long term beneficial financial market improvements on home soil that saw interest in investments soar. The economic collapse suffered as a result of the slump in oil prices might've slowed down policy implementation but it certainly didn't stop policymakers from forging the way forward.
Recent news from the Central Bank of Nigeria expressing its intention to launch a dual-currency exchange rate is just one of the economic reforms government wishes to introduce.
The case with MTN is no exception with the Nigerian government using the fine as a tool to negotiate a local listing of the company's Nigerian operations to boost the image of the Nigerian Stock Exchange as a home for foreign companies looking to house their businesses.
However the manner in which they went about it may leave a lot left to be desired.
Bullyboy tactics might pressure big corporates such as MTN, who have plenty to lose, into agreements that fits the strategy of the government while disregarding the timing of such a move as well as the impact on its company, it would also make those contemplating investment think twice before doing so.
MTN to 'significantly' boost Nigeria spending in 2017 https://t.co/ZIYJbkrpG5— Fin24 (@Fin24) June 15, 2016
No comments :
Post a Comment