Last week MTN said it had withdrawn a lawsuit over the fine, imposed for failing to disconnect unregistered users of its mobile network in Nigeria, and made a “good faith payment” of $250 million towards reaching an amicable settlement instead.
Nigeria has been pushing operators to verify the identity of their subscribers, concerned that unregistered sim cards are being used for criminal activity in a country also fighting an insurgency by Islamist militant group Boko Haram.
Africa’s biggest cellphone network operator also announced on Thursday a surprise 5.2% increase in its dividend to 1,310 cents per share, even though its profits more than halved in what the company described as a “challenging year.”
Headline earnings per share (EPS) last year fell to 746 cents from 1,536 cents in 2014.
The share price was up 10% at 149.4 rand by 1036 GMT, their strongest daily advance since October 2008.
“The fact that they increased the dividend is a surprise because the market had expected them to cut it by maybe 50%,” said one telecoms sector analyst, who asked not to be named.
“The provision that they set aside also implies a smaller fine than people had anticipated,” the analyst added.
MTN has already managed to negotiate the penalty down from $5.2 billion to $3.9 billion but the fine has continued to weigh on MTN’s share price, which is down almost 20% since October, when the fine was imposed, even after Thursday’s rise.
MTN also said at its results presentation on Thursday that it planned to float its Nigerian unit on the Lagos stock market once it had settled the dispute.
Separately Africa Internet Group (AIG), a Nigerian e-commerce group best known for online retailer Jumia, said on Thursday it had secured further funding worth a total of 225 million euros ($245 million) from a group of investors including MTN, already one of the firm’s biggest shareholders.
Africa’s most populous nation and biggest oil producer is MTN’s largest market, but the firm’s importance to its economy and people also gives it leverage with Abuja at a time when the economy has been hit hard by the slump in oil prices.