A Nigerian government official has denied a report that MTN must pay a US$3.9bn fine by 31 December, saying that it will await the outcome of a legal challenge being pursued by the South African operator.
A Nigerian government spokesperson has denied a report that MTN (JSE:MTN) would have to pay its US$3.9bn fine by 31 December, saying instead that it would await the outcome of a court case.
The Reuters report had cited a Nigerian Communications Commission (NCC) official who had said that if the South African operator failed to do so, it would face “appropriate action.”
Representatives of the NCC and MTN did not respond to requests for comment in time for the press deadline. On 17 December, MTN issued a statement saying it was challenging the fine before the Federal High Court in Lagos.
Since receiving the fine in October, MTN has parachuted in former CEO Phuthuma Nhleko, accepted the resignation of its CEO for Nigera, and completely overhauled its management structure.
In early December, Nhleko successfully negotiated down the original US$5.2bn fine to a still significant US$3.1bn. The company indicated at the time that it would work to lower the fine further. MTN Nigeria posted FY 2014 revenues of US$4.1bn.
The fine is punishment for failing to switch off the SIM cards of five million unregistered users, as Nigeria tries to put the breaks on illegal activity, especially by militant group Boko Haram.
Large rivals including Etisalat and Bharti did meet the NCC’s end of August deadline to switch off unregistered users, prompting one source familiar with the local market to note that MTN “has a history of not following the NCC’s rules”.
In addition to causing shock waves within MTN itself, the fine has left telecom executives and investors saying they feel warier of the Nigerian market, despite its vast size and profitability.
According to NCC data as of 30 September, MTN has about 62.5 million subscribers, Bharti, which trades as Airtel, has 31.1 million and Etisalat, which trades as EMTS, has 23.5 million, while Globacom has 31.3 million.
MTN’s next largest markets are Iran and South Africa, where it has 44 million and 29 million customers respectively. It has a total 231 million customers across its 21 markets.
