After a seven-year status as Africa’s highest valued telecommunications operator, MTN’s market capitalisation was R244 billion ($16.2 billion) at the market close in Johannesburg on Wednesday, lagging behind Vodacom’s R249 billion. This is the first time the rankings have been reversed since Vodacom, a subsidiary of Vodafone, initially offered shares to the public in 2009.
MTN’s shares dropped 31% since the record $5.2 billion Nigeria penalty was announced on 26 October. The fine was later reduced to $3.9 billion but an agreement has not yet been reached regarding payment. Vodacom, on the other hand has gained 12% in market share over the same period. Former MTN CEO Sifiso Dabengwa resigned in November and has been replaced temporarily by his predecessor, Phuthuma Nhleko.
Telecommunications analyst at Vunani Securities, Irnest Kaplan commented “The problem is all the uncertainties hanging over MTN’s head. The market needs to know who the next CEO will be, but most importantly the market needs to be updated on the fine negotiations and if there has been any progress. Markets do not like uncertainty.”