MTN cuts subscriber target as Nigeria customer numbers slide

MTN Group Ltd., Africa’s largest wireless operator, cut its full-year forecast for subscriber numbers after more than five million Nigerian customers were disconnected following a review into how they were able to register for phone contracts.

The company now says it will add 14.8 million net subscribers this year, compared with a previous forecast of 16.75 million, Johannesburg-based MTN said in a statement on Thursday, Bloomberg reports. The carrier’s customer base grew 0.9 percent to 233 million in the three months through September, compared with the previous quarter.

MTN, which operates in more than 20 countries across the Middle East and Africa, had 5.1 million subscribers cut off in Nigeria, its biggest market, at the end of August, following checks on personal documents. The company is also facing “ongoing regulatory restrictions” related to its market-leading position in Africa’s most populous country, spokesman Nik Kershaw said by phone. About 3.4 million of the customers have been reconnected, the company said.

MTN shares gained 2.4 percent as of 3:31 p.m. yesterday in Johannesburg, valuing the company at $25.2 billion. The stock is down 16 percent this year, compared with a 14 percent gain for Vodacom Group Ltd, its cross-town competitor.

While the loss of Nigerian customers is a short-term setback, “it does point to a tough regulatory environment,” Steve Minnaar, a money-manager at Cape Town-based Abax Investment, said by phone.

“They have been struggling with the regulator for many years in the Nigerian environment.”

Because of a fierce security insurrection in part of northern Nigeria and kidnapping in Africa’s largest economy, the government is insisting that subscribers be properly identified and networks must disconnect lines that do not have the right subscriber profile.

Customers using contracts in South Africa fell 2.6 percent to 5.2 million, due in part to “low availability of handsets,” MTN said. Total subscriber numbers in Africa’s most industrialised economy gained 2 percent to 29 million, due to a rise in pre-paid customers.