MTN Group’s SA business reported lower margins in the first half of 2019 after being forced to write off as much as R393m owed by struggling rival Cell C for network roaming services.MTN SA’s half-year performance was affected by new regulations aimed at curbing out-of-bundle tariffs and “adjustments required due to delayed payments under the network roaming agreement with Cell C”, the group said.
In late June, S&P Global Ratings downgraded Cell C’s debt for the second time in less than three months to reflect that a default was now “a virtual certainty”.A consortium of investors led by billionaire businessperson Jonathan Beare has agreed to take a minority stake in Cell C to help its financial position, but the deal is yet to be finalised.
MTN said service revenue in SA increased by 3.3%, but earnings before interest, tax, depreciation and amortisation grew just 0.2% to R7.5bn as margins fell.
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