The giant pan-African carrier MTN is enjoying differing fortunes in two of its markets, with expansion on the cards in Nigeria and tax demands making things tricky in Uganda.
According to regional press reports, MTN Group plans to issue bonds worth 50 billion naira (around $129 million) in Nigeria to raise funds for its day-to-day requirements and working capital needs.
This effort is part of MTN Group’s plans to diversify its funding streams and to support MTN Nigeria’s 4G network rollout in Nigeria. Coverage in the continent’s most populous nation is now close to 50 per cent and MTN Nigeria has just under 70 million subscribers in the country rated MTN Group’s largest and most profitable market.
In January this year, the president and CEO of MTN Group, Rob Shuter, confirmed plans to invest around $1.6 billion in its Nigerian operations over the next three years.
There’s less favourable news for a smaller, but still significant MTN market in the shape of Uganda, where MTN Uganda has been ordered to pay an $11.6 million tax bill it had disputed. A report from the country’s local press says that the country’s Tax Appeals Tribunal found in favour of the Uganda Revenue Authority (URA) in two separate cases.
In one case, the URA was demanding about $6.4 million in unpaid duties relating to the taxation of airtime. The second was a bit more complex: it was money owed by MTN as part of a dispute over how telecom and mobile money services are taxed.
MTN suggested that the tax should be paid on the price of airtime it sells at the wholesale level, while the URA maintained that taxes should be paid on the retail value. The award came to just under $5.3 million.
