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Friday, 17th January 2020
1:16:11pm

Business

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Brazil’s state-controlled oil company Petroleo Brasileiro SA said on Tuesday it had ended its activities in Africa after closing the sale of a 50% stake in Petrobras Oil & Gas BV (PO&GBV), which holds some Nigerian oil assets.

Petrobras, as the company is known locally, said in a filing that it had sold the PO&GBV stake for just under $1.5 billion to Petrovida Holding, which is formed by Vitol Investment Partnership II, Africa Oil Corp and Delonex Energy.

It added that with the transaction, it had “completely closed its operational activities in Africa.”

-Reuters 

Nigeria’s attorney general has withdrawn a $2 billion tax demand against South African telecoms giant MTN Group, a closely watched case that critics said damaged Nigeria’s appeal to foreign investors.

In a letter filed with the Nigerian stock exchange, MTN said the government had decided to drop its case and refer the issue to tax and customs authorities “with a view to resolving contentious issues.” 

“We are very pleased with the decision of the (attorney general) and we commend him for his wisdom,” MTN Nigeria’s Chief Executive Ferdi Moolman said in a statement.

Shares in MTN Group rose by more than 4% after the announcement. Nigeria is its biggest market, with roughly 60 million users. 

Attorney General Abubakar Malami had ruled that the firm owed taxes relating to the import of equipment and payments to foreign suppliers from 2007 to 2017. He did not immediately respond to a request for comment on Friday.

MTN, whose local unit listed on the Nigerian Stock Exchange last year, has said it would sell more shares to the public and increase local ownership once the tax row is resolved.

-Reuters

South Africa’s Vodacom Group and MTN Group could face prosecution if they do not agree with the Competition Commission in the next two months to lower data prices, the watchdog said in findings from an inquiry published on Monday.

The data services inquiry was launched in August 2017 in response to a request from the minister of economic Development and after complaints from consumers about high data costs. 

In its final report, the Commission recommended that the two mobile operators must independently reach agreement with the competition watchdog on substantial reductions on tariff levels, especially prepaid monthly bundles, within two months of the release of the report.

It said the preliminary evidence suggests that there is scope for price reductions in the region of 30% to 50%. 

The mobile operators must also reach agreement “to cease ongoing partitioning and price discrimination strategies that may facilitate greater exploitation of market power and anti-poor pricing.”

“With respect to the above recommendations on the level and structure of pricing, should an operator fail to reach the required agreements with the Commission within the specified timeframes, the Commission will proceed to prosecution under the appropriate sections of the Act,” The Commission said in a summary of its report.

-Reuters

South African telecoms group MTN said on Wednesday it would “vigorously” oppose recommendations of the Competition Commission after the regulator instructed MTN and rival Vodacom to lower data prices.

“We respectfully disagree with the analysis and recommendations contained in the summary report and, as we study the full report, (we) will continue to engage constructively and vigorously defend against over-broad and intrusive recommendations,” it said in a statement.

On Monday, Competition commissioner Tembinkosi Bonakele said Vodacom and MTN could face prosecution if they do not agree to cut data prices in the next two months. This followed the findings of a data services inquiry launched in August 2017 which showed prices charged by the operators were higher in South Africa than in other African markets in which they were operating.

The same was true when comparing local data costs with those outside Africa, Bonakele said.

Vodacom and MTN have argued that such comparisons are uninformative because cost and quality differences across countries, including spectrum allocations, may account for the differences in pricing. 

On Wednesday, MTN said its local unit has substantially reduced the effective price of data and the group has also invested over 50 billion rand ($3.40 billion) in the South African network over the last five years to accommodate growing data demand with limited spectrum availability.

It added that it has also pledged a further 50 billion rand of investment over the next five years.

Vodacom spokesman Byron Kennedy said on Monday Vodacom had reduced its effective data price by about 50% since March 2016.

The Federation of Unions of South Africa welcomed the findings of the Commission and called on Vodacom and MTN to implement them with immediate effect, though it acknowledged the challenge that lack of additional spectrum has on costs.

Telecom companies have said it is wrong to lay the blame for the country’s data costs on operators, arguing the greatest hurdle to data pricing reduction remained spectrum allocation, for which the government is responsible. 

“The release of new spectrum in this market will greatly assist our ability to service more customers with more data traffic,” MTN said, adding that South Africa has amongst the lowest spectrum allocation in its markets.

South Africa’s President Cyril Ramaphosa told an investment conference in November that his government had started the process of releasing high-demand broadband spectrum and that a policy framework had been published.

-Reuters

Two trade unions at state-owned South African Airways (SAA) said they would continue talks with the airline on Thursday aimed at ending a week long strike over wages and job cuts that has brought the national flag carrier to the brink of collapse.

The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA), which have been leading the strike, said in a statement that they hoped to find an acceptable compromise in the talks with SAA. 

SAA has nearly no cash left and may miss salary payments this month. The carrier’s swift decline has turned it into a black hole for government bailout money, with some 20 billion rand ($1.35 billion) being spent on it in the past three years.

Its operations are marred by an unprofitable international route network and a fleet of inefficient planes. The airline said on Thursday it would suspend all flights between Johannesburg and Hong Kong from Nov. 23 up to and including Dec. 14 to curb significant financial losses on the route. 

A South African union filed a case on Thursday asking a court to subject SAA to a business rescue, with the aim of restoring it to profitability.

Solidarity, which mostly represents white, Afrikaans-speaking employees, said it would “mean that the court can appoint a business rescue practitioner with comprehensive powers to rescue the airline.”

-Reuters

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