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MTN, no longer on UBS’s top telecom stocks

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Mixed opinions on the effect of SIM card registration requirements in Nigeria forced global financial services company USB to remove Africa’s largest cellphone company, MTN, from its top telecommunication stock picks, on concerns that it could lead to revenue falls this year, reports the South African publication BusinessDay.

The removal can be explained by the last year’s observed trends in the effect SIM card registration had in South Africa on mobile operators Vodacom, MTN and Cell C.

After the recent announcement, MTN’s share dropped as much as R1,99 to R109,11 in morning trading yesterday after UBS’s decision, the lowest figure since May 13.

According to Bloomberg, the removal was approved “following the recent introduction of SIM card registration requirements in Nigeria, which we believe will lead to a sharp reduction in revenue growth for MTN this year and may incur additional costs relating to registration of subscribers and distribution”.

MTN has already experienced a drop in customer base in South Africa, due to this new regulation that requires prepaid users to register personal details when acquiring a SIM card.

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