How investors should be reading MTN , now that the auditor general has withdrawn its tax claim

The Attorney General of Nigeria withdrew its $2 billion tax demand against MTN Nigeria on Friday, referring the matter to the Federal Inland Revenue Service (FRS) and Nigeria Customs. This move has been seen as a positive development for MTN, with its CEO, Rob Shuter, expressing that it paves the way for an amicable resolution. In a recent interview with CNBC Africa, Olusola Teniola, President of the Association of Telecoms Companies of Nigeria (ATCON), shared insights on the implications of this decision and the outlook for the telecom sector in Nigeria in the new year. The decision by the Attorney General to refer the tax issue to the FRS and customs is a significant shift in the handling of the matter. According to Teniola, this move lifts a burden on MTN's reputation and credibility, which had been impacted by the looming tax claim. The market also responded positively to this news, with MTN shares taking an upward trajectory. Teniola believes that there is further room for growth in the stock price, signaling a sense of relief and hope for investors. While the issue has not completely dissipated, Teniola views the referral to the appropriate authorities as a step in the right direction. He asserts that the involvement of the FRS and customs from the onset could have possibly expedited the resolution process. By aligning responsibilities with the relevant agencies, the uncertainty surrounding the tax claim could have been mitigated. Despite the challenges faced by MTN, Teniola remains optimistic that the matter will be resolved in due time, provided full disclosure by the company. The implications of this decision extend beyond MTN, setting a precedent for the telecom sector in Nigeria. Teniola emphasizes the need for clear regulatory processes and synchronized efforts among government agencies to instill investor confidence. With other telcos considering listing, this case serves as a lesson on the importance of transparent and efficient governance in facilitating foreign direct investment. Looking ahead, Teniola shares his outlook for the telecom sector in Nigeria in 2020. He highlights the trials of 5G technology and the upcoming broadband plan, aiming to achieve 75% broadband penetration by 2025. The sector's growth is closely tied to investments and regulatory support, particularly in accessing funds and spectrum. Digital literacy and infrastructure development are key focus areas to propel the industry forward. As the country enters a new decade, the telecom sector stands at a crucial juncture, poised for growth and innovation. The withdrawal of the tax claim against MTN marks a positive start for investors and industry players, signaling a renewed era of transparency and collaboration in Nigeria's telecom landscape.