Vodacom Overtakes Troubled MTN As Africa’s Largest Telecom Operator
Vodacom has overtaken MTN Group as the largest telecoms operator by market capitalization as the former struggles with regulators in Nigeria over a record multi-billion fine leveled on it at the end of last year.
Vodacom’s market capitalization rose to 249 billion rand at the Johannesburg Stock Exchange (JSE) on Wednesday surpassing MTN, which stood at 244 billion rand ($16.2 billion), Bloomberg reported.
This is the first time Vodacom’s capitalization has risen above MTN’s since the England-based firm listed on the JSE in 2009.
MTN’s shares have devalued by 31 percent since October, when the Nigerian Communication Commission (NCC) fine it’s it a record $5.2 billion. While the penalty was later reduced to $3.9 billion, the South African company has yet to agree to a payment.
MTN’s reputation took a hit from the fallout which resulted in former CEO Sifiso Dabengwa stepping down and bringing in his predecessor Phuthuma Nhleko in an acting capacity to stabilize the ship and see the group through its negotiations with Nigerian authorities.
“The problem is all the uncertainties hanging over MTN’s head,” Irnest Kaplan, a telecommunications analyst at Vunani Securities, told Bloomberg.
MTN’s business in South Africa also took a hit last year with a near two-month strike that led to the suspension of work at hundreds of call centres during that time.
While As MTN was struggling, Vodacom was making gains with its share price increasing by 12 percent over the same period, Destiny Man reported.
An annual consumer report released by South Africa’s Ombudsman released in April showed that MTN was the most complained about company in the country with 613 complaints, followed by the JD Group with 172 and Vodacom with 110 complaints.
Despite its troubles in Nigeria, MTN is still the largest telecoms operator in the Africa’s largest economy as competitors have filed to capitalize on its loss of over 4.5 million subscribers, Tech Point reported.
James Chanos, a New York-based short-seller famous for predicting the collapse of US giant energy company Enron, has predicted that MTN earnings could be wiped-out sooner than expected –with revenues and margins falling – as its main markets South Africa and Nigeria face serious economic challenges.