South African telecoms firm MTN Group cut its 2018 dividend on Thursday to cut debt but outlined increases in the next three to five years, lifting sentiment in the firm which some investors had expected to scrap this year’s payout.

Shares in Africa’s biggest mobile phone operator jumped as much as 13 percent before easing to trade up 10.4 percent at 135.40 rand, on track for its biggest daily gain in almost two years.

MTN said it was cutting its 2018 dividend to 500 cents from 700 cents in 2017 but would use this year’s figure as a base to increase payouts by 10 to 20 percent in the next three to five years, describing this as a “progressive” dividend policy.

“When MTN said last year it was reviewing its dividend policy, investors assumed that they were going to suspend dividends altogether, so this is good news,” said Bright Khumalo, an fund manager at Vestact, a shareholder in MTN.

MTN, which operates in more than 20 countries in Africa and the Middle East, wants to expand from telecoms services into financial services, music streaming and e-commerce.

Chief Executive Officer Rob Shuter launched the expansion strategy last year after a series of disputes with regulators in Nigeria, Cameroon and Uganda that stoked investor frustration in a firm that has been a post-apartheid South African success story.

Shuter, a former Vodafone executive who also had a career in banking, said the new dividend policy would help cut MTN’s net debt, which stands at 57 billion rand, more than double the pile of its nearest rival Vodacom.

“MTN as a group has consistently borrowed money over the last five to six years to fund our investment programme and dividends,” Shuter said after the firm announced 2017 results.

“This policy would allow for the stabilisation of our gearing ratio,” he said.

Founded with the help of Pretoria at the end of white rule in 1994, MTN reported a 3.3 billion rand profit for 2017, excluding one-off charges related to a $1.1 billion Nigerian fine. It had reported a 1.4 billion rand loss a year earlier.

Group service revenue rose 7.2 percent to 124 billion rand, due to strong performance in Nigeria, the company’s most lucrative where it has also been embroiled in a dispute over repatriating funds and unregistered SIM cards.

The Nigerian Senate approved in November a report largely exonerating MTN of illegally repatriating $14 billion. The report followed MTN’s agreement to pay a $1.1 billion fine to settle a row over unregistered SIM cards. (Reuters)