Vodacom has overtaken MTN to become the largest operator in Africa by market capitalisation, largely as a result of MTN’s six-month fight with the Nigerian Communications Commission (NCC) over payment of a record fine.
Bloomberg reported that MTN’s market capitalisation was 244 billion rand ($16.2 billion) at the close of market in Johannesburg on Wednesday, just behind Vodacom’s market capitalisation of 249 billion rand.
The news agency added that this year marks the first time in seven years that MTN has lost its status as the continent’s highest-valued telco, noting that MTN’s share price has declined 31% since 26th October when the record US$5.2 billion Nigeria fine was made public. Vodacom has gained 12% in the same period, Bloomberg said.
The NCC slapped MTN with the fine for failing to disconnect unregistered SIM cards in accordance with its timetable. The penalty was later reduced to US$3.9 billion, but MTN has yet to agree to a payment. MTN has previously reiterated that it is still engaging with various authorities on the matter.
The Nigeria dispute also caused the resignation of MTN CEO Sifiso Dabengwa, who has been replaced on a temporary basis by his predecessor, Phuthuma Nhleko.
“The problem is all the uncertainties hanging over MTN’s head,” Irnest Kaplan, a telecommunications analyst at Vunani Securities, told Bloomberg. “The market needs to know who the next CEO will be, but most importantly the market needs to be updated on the fine negotiations and if there has been any progress. Markets do not like uncertainty.”
Total Tele