On back of fine deal, MTN to significantly increase Nigeria spending

Mobile giant MTN is to substantially increase capital spending in its largest market, Nigeria next year after agreeing to settle a $1.7 billion fine with the government.

The fine deal which analysts call a win-win, means that Africa’s biggest mobile-phone operator will extend 3G coverage to 90 percent of Nigeria in 2017.

It will also start a fiber-network rollout 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 11 billion rand ($716 million) from 5 billion rand 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 330 billion 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 $5.2 billion and will be funded by cash flow from the Nigerian operations, according to a company statement.

For more on MTN’s settlement deal with the Nigerian government, click here.

MTN shares fell 6 percent to 135.82 rand as of 4:22 p.m. in Johannesburg, the biggest drop since March 24, after rallying more than 16 percent in two sessions after the fine was settled. The stock is down 29 percent since the penalty was made public on Oct. 26