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NCC Sets Fresh Operational Fees, Spectrum Prices For Telecommunications Operators

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Nigerian Communications Commission

The Nigerian Communications Commission (NCC) has set up an annual operating regulatory levy to ensure that all licenses were properly and equitably assessed to meet statutory and regulatory expectations.

This was disclosed by the Executive Vice-Chairman of the NCC, Professor Umar Danbatta, during the Public Inquiry on two regulatory instruments draft held on Thursday, in Abuja.

Danbatta explained that the two key regulatory instruments were tailored to meet the challenges and to further strengthen the market structure of the industry.

The instruments include the Annual Operating Regulations and the Frequency Spectrum Regulations, which fees and pricing fall under.

He said “The first instrument will bring the regulations in line with current realities and sustain the enviable contributions of the communications sector to the country’s Gross Domestic Product (GDP)

“The second instrument is a vehicle that enables the commission to meet its role and exclusive mandate in Section 121 of the Nigerian Communications Act 2003 by assigning this scarce national resource in an equitable manner. The regulations also ensure that frequency spectrum are assigned and managed in a way that ensures fair pricing and efficient deployment of attendant services. The public inquiry is precursor to the commission’s current drive to ensure efficiency in spectrum management and unveiling of next-generation services through varied enablers.”

Deploying 5G
The NCC Boss informed that the Commission had commenced the process of deploying Fifth Generation (5G) technology in Nigeria, which largely depended on the appropriate frequency spectrum.

With the explosion in technologies, Danbatta said there was also an attendant secondary reliance on different approaches to maximize frequency spectrum.

He noted that this led to the need for designation of several bands of frequency spectrum for communications services and a key illustration was the recent identification of some Spectrum frequencies for 5G deployment.

Professor Danbatta assured that the Commission was conscious of the expectations and the need to ensure that the required regulatory frameworks were in place to meet these challenges.

He noted that this had made the reviews, which the Commission was conducting an important milestone as the public inquiry is pushing the country to the front queue of this global efforts.

“We must be prepared on both ends of the industry to push the country forward for these remarkable changes; while the licensees continue to invest in deployment. The Commission will sustain its drive-by ensuring regulatory efficiency and excellence,” the NCC Boss restated

He expressed optimism that the review would ensure effective and efficient utilization of frequency spectrum and also ensure a fair approach to the management of finance in the industry in the near future.

Danbatta urged participants to make their contributions freely and raise issues that would assist the Commission in developing and issuing regulatory instruments that would continually contribute to the development of the industry and sustain its positive contributions to the nation’s economy.

Earlier, in her address, the Director, Legal and Regulatory Services of the Commission, Ms. Josephine Amuwa, said the objective of the public inquiry was to secure the buy-in of all stakeholders and ensure the efficiency of the regulatory instruments when implemented.

She explained that the Commission decided to review the Annual Operating Regulations 2014 and the Frequency Pricing Regulations 2004 to ensure that the regulatory instruments issued were abreast with developments in the industry.

According to Amuwa, the Annual Operating Levy Regulations review will look at the current licensing structure and ensure that all the spectra of licensees will be properly covered.

“Another key part of the review is to clarify and clearly outline the benchmarks for assessment. This will not only ensure regulatory certainty but further entrench transparency in the process. On the other hand, the review of the second regulation, the Frequency Spectrum (Fees and Pricing) Regulations is expected to provide more guidelines on the parameter for determination of proper fees and pricing of spectrum. This will also make adequate provisions for different spectrum licensing processes and their assessment parameters,” she explained.

Present at the event were the Executive Commissioner, Technical Standards, Engineer Ubale Maska, the Executive Commissioner Stakeholder Management, Mr. Adeleke Adewolu, Directors, Deputy and Assistant Directors as well as External Stakeholders.

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Telecommunications

MTN Nigeria Strengthens Working Capital By Raising N50bn In New Commercial Paper

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MTN

MTN Nigeria Communications PLC (MTN Nigeria) has disclosed plans to raise N50 billion through its latest issuance of commercial paper (CP) to boost its working capital.

The plan is under N250 billion Commercial Paper Issuance Programme.

Not only that this Series 11 and 12 CP issuance is expected to strengthen MTN Nigeria’s short-term working capital, it will also diversify its financing base.

A notification to the Nigerian Exchange Limited and the investing public further revealed that this proposed issuance is part of MTN Nigeria’s ongoing strategy to tap the debt market as a flexible funding source to meet immediate financial needs.

It builds upon the company’s series of CP issuances in the past year as it pursues a robust approach to balance its capital structure.

The funds are expected to support the company’s operational and growth requirements as it seeks to expand its infrastructure, improve service delivery, and cater to the increasing demand for telecommunications and digital services across Nigeria.

MTN’s financial statement as of September 2024 suggests it has negative working capital of about N1.49 trillion

The cash flow is necessary in order to enable the company meet cash flow demands and service short-term debt without over-relying on long-term financing

This approach provides financial flexibility, allowing MTN Nigeria to manage interest costs and adjust its debt profile in line with operational cash flow, which is critical for a company with significant external loans.

The issuance also serves the broader purpose of diversifying MTN Nigeria’s financing sources, reducing reliance on bank loans, and maintaining a balance between short- and long-term debt.

This financial strategy not only enhances MTN’s liquidity but also positions it to better withstand the economic challenges in Nigeria’s volatile business environment.

While the company has yet to disclose specific terms of the Series 11 and 12 notes, further details are expected to be shared in the coming weeks.

 

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MTN Nigeria Posts 33.6% Revenue Growth Despite Subscriber Drop in 2024

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MTN Nigeria - Investors King

MTN Nigeria Communications Plc’s total subscribers decreased by 0.9% to 77 million in the nine months ended 30 September 2024.

In the company’s unaudited financial statements, active data users increased by 5.1% to 45.3 million while mobile money wallets decreased by 21.8% to 2.8 million.

Service revenue rose by 33.6% to N2.4 trillion. See other details below.

Key Financial Highlights points:

● Total subscribers decreased by 0.9% to 77.0 million, impacted by the NIN-SIM regulations
● Active data users increased by 5.1% to 45.3 million
● Active mobile money (MoMo PSB) wallets decreased by 21.8% to 2.8 million
● Service revenue increased by 33.6% to N2.4 trillion
● Earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 5.3% to N860.2 billion
● EBITDA margin decreased by 14.9 percentage points (pp) to 36.3%
● Loss after tax was N514.9 billion (Q3 2024 profit after tax of N4.1 billion)
● Profit after tax (PAT) adjusted for the net forex loss was N118.5 billion, down 59.2%
● Earnings per share (EPS) was negative N24.51 kobo (positive N5.65 kobo adjusted for the forex loss, down 59.2%)
● Closing retained earnings and shareholders’ funds of negative N723.0 billion and N573.6 billion, respectively
● Capital expenditure (capex) excluding leases was down 27.8% to N217.6 billion
● Positive free cash flow of N536.8 billion, an increase of 21.9%

Commenting on the company’s performance, MTN Nigeria CEO Karl Toriola “In the first nine months of 2024, we sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility –despite challenging conditions.

The inflation rate remained elevated amidst rising energy prices and naira depreciation. Inflation averaged 32.8% in the nine months (Q3 2024: 32.8%) compared to an average of 24.5% in 2023 (Q3 2023: 25.5%). To curb inflation, the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) by 8.5pp to 27.25% during the period, resulting in higher funding costs, although this helped reduce volatility and improve liquidity in the forex market.

The higher inflation and interest rates weighed on consumers’ spending power and impacted business activity. However, we remain focused on enhancing operational efficiency and driving the growth of our commercial operations.

Additionally, the naira closed at the Nigerian Autonomous Foreign Exchange Market (NAFEM) in September 2024 at N1,542/US$ (December 2023: N907/US$), exerting pressure on business activity. The improvement in liquidity in the foreign exchange (forex) market has helped us reduce our exposure to foreign currency-denominated
obligations.

We continued to manage the effects of the Nigerian Communications Commission’s (NCC) industry-wide NIN-SIM directive, which has impacted the evolution of our customer base. Having implemented the directive with all our subscribers fully compliant, we continue our drive towards reconnecting those affected to reduce churn
while extracting increased value from the market.

Sustained commercial momentum notwithstanding the macro headwinds

Our commercial momentum drove broad-based growth across all revenue segments, demonstrating the underlying strength and resilience of the business. We recorded an increase in service revenue of 33.6%, which was ahead of the average inflation rate in the period. This growth was led by data and supported by voice, fintech and digital
services.

We recorded a 9.8% increase in voice traffic and a 42.1% increase in data traffic. In addition, data usage per user grew by 31.2% to 11.3GB, supported by the rising demand for data and digital services, which has contributed to revenue growth.

In the fintech business, we focused on executing our growth strategy, prioritising increasing wallet quality, focusing on advanced services and the MoMo PSB app to enhance the user experience and engagement. We have introduced cross-border remittances with thirteen fellow African countries to boost adoption and monetisation.

Taking advantage of their interoperability, we are now leveraging the existing network of agent and merchant ecosystem in the industry to bring our services closer to our customers.

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Telecommunications

Elon Musk’s Starlink Suspends Internet Subscription Price Hike for Nigerian Users 

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starlink satellite

Starlink, the satellite internet service owned by Elon Musk’s SpaceX, has suspended its earlier announced price increase for Nigerian users.

A message from the Starlink Team on Thursday noted that the suspension of the price hike is temporary, adding that the latest decision is to navigate regulatory challenges.

Investors King had on October 2 reported that the internet service inflated its prices owing to rising inflation in Nigeria.

The monthly subscription fee had risen by 97 percent, from N38,000 to N75,000, as customers expressed displeasure over the significant increment.

Starlink had also said that new users would also face a higher cost for the Starlink kit (hardware for installation), which was to be priced at N590,000, a 34 percent increase from the previous price of N440,000.

Meanwhile, about 22 days after, the internet company rescinded its decision to increase the price, citing some regulatory challenges.

Even though the company stated that the increment would have enabled it to deliver reliable service for its users, it pointed out that it could no longer proceed with it in the meantime.

According to the company, it needed regulatory support to make the improvements necessary for a better customer experience.

While assuring customers who had already subscribed to packages carrying the hiked prices that their account would be credited, the company declared that users could still cancel their services.

The message by Starlink to its customers read, “Last month, we increased the monthly service price for Starlink in Nigeria to account for inflation, helping us maintain operations and continue delivering reliable service.

“Today, we are temporarily suspending this price increase as we navigate regulatory challenges.

“If you’ve already been charged at the higher rate, a one-time credit will be applied to your account to cover the difference. You also have the flexibility to cancel your service at any time.

“We remain committed to providing high-speed Internet in Nigeria, but we need regulatory support to make the improvements necessary for a better customer experience. Without these approvals, our ability to continue delivering service is at risk.

“Thank you for choosing Starlink and supporting our mission to bring affordable, high-speed internet to more people as many people around the world as possible.”

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