JOHANNESBURG, South Africa-M-Cell, the holding company of mobile network operator MTN, has lashed out at allegations that the company’s Nigerian operation is struggling, reporting that it would be profitable by March 2004.
Lazarus Zim, managing director of MTN International, said the Nigerian business is doing better than expected and will easily meet a profit in 2004. He added that expenses are in line with predictions and no unexpected costs are likely to cause MTN Nigeria to miss its profit target.
The expenses incurred by MTN have been the source of the speculation, as the company paid US$285 million for the license, and is expected to spend US$1 billion on its network.
MTN Nigeria had also absorbed US$480 million, generating roughly US$130 million in revenue in its financial year. The group also took a debt of US$240 million to finance its expansion plans. In terms of subscribers, the network claims to have more than 500,000 users.
Zim added that there have been slight problems with the issue of interconnection, but it is not a crisis in the eyes of the group and that the tariffs have not been increased by any unreal margin.
“We have explained our stance on tariffs, and we do not expect any further problems in this regard,” Zim said.
