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MTN Nigeria’s often impressive profit margin is facing threats on two fronts as earnings are hit by a weak naira and a tax demand threatens to remove tens of millions of dollars from its balance sheet.

The deregulation of forex management in Nigeria in June 2023 led to a 68.5% increase in the exchange rate from N461/US$1 in December 2022 to N777US/$1 by the end of September, resulting in greater business costs, and hitting recently announced MTN Nigeria earnings for the nine months ending 30 September.

Although MTN Nigeria still seems to have delivered a strong commercial performance in the period under review, the significant movement in the exchange rate since the liberalisation of the forex market resulted in higher forex losses with a knock-on effect on net finance costs, up 174.4%. Due to this, profit before tax (PBT) declined by 42.0%. It would have risen slightly without the forex loss.

That, however, is not the only issue faced by MTN Group, Africa’s largest telecoms company. After facing a court order to pay US$72.6 million in overdue taxes, as we reported recently, it now plans to challenge that order.

The order was issued last week by Nigeria’s Tax Appeal Tribunal (TAT) in Lagos. TAT says the amount is for unpaid taxes between 2007 and 2017, though it is lower than the amount originally requested before MTN Nigeria appealed.

Having reviewed this outcome and considered input from tax and legal consultants, MTN Nigeria says it has resolved to appeal the TAT’s decision.

However, we may have to wait to hear a precise strategy. Quoted in ITWeb Africa, Karl Toriola, MTN Nigeria CEO, says: “The company will issue a separate and comprehensive statement articulating its position on the matter.”

East Africa Device Assembly Kenya (EADAK) Limited has opened this week. It’s Kenya’s first local smartphone assembly plant.

The significance of the launch didn’t evade the political classes or senior telecoms executives. President William Ruto unveiled the new plant on Monday. Safaricom CEO Peter Ndegwa also attended the unveiling.

Of course Safaricom has a direct interest in EADAK. As we reported in June, operators Safaricom and Jamii Telecommunication have partnered with Chinese smartphone manufacturer Shenzhen TeleOne Technology to locally manufacture smartphones. The new facility has the capacity to produce up to three million mobile phones each year.

According to ITWeb Africa, the devices will be accessible nationwide at Faiba shops (Jamii Telecommunications offers broadband and mobile services under the Faiba brand) and dealer stores, as well as Safaricom stores. It will also be available via Masoko, an online marketplace that offers buyers a wide variety of phones and accessories.

The 4G-enabled Smarta and Ultra mobile phone handsets will be the anchor devices at launch, with other devices planned for the coming months, including a locally made tablet. The first devices will cost $50.

EADAK Chairman Joshua Chepkwony, quoted by ITWeb Africa, said: “This assembly plant will contribute to the government’s agenda of increasing digital inclusion in the country. We were able to achieve affordability through a collaborative strategy that included business partnerships and beneficial government regulations.”

President William Ruto revealed plans to produce smartphones locally in December 2022 and gave his government a 12-month deadline to deliver affordable smartphones to the Kenyan market. It’s not yet clear when the first devices will reach retail but it looks like they won’t be far off that deadline.

LightRiver has long labored behind the scenes of network design and deployment for service providers across the industry.  With the rise of automation and software-driven infrastructure, they have begun to move deeper into the actual operation and maintenance of those networks as well.  With us today to talk about the company’s approach to the ever-moving target of network infrastructure design and operation is newly minted CEO Mike Jonas. … [visit site to read more]

This Industry Viewpoint was authored by Epsilon’s Simon Waller

The cloud has revolutionised the way the world works, seamlessly connecting more people and businesses to the online world than ever before. … [visit site to read more]

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