Africa’s largest mobile network operator, MTN, says that it won’t be forced to pay the $5.2 billion fine it imposed upon it by Nigerian communications authorities by the close of play today despite being given the deadline for transfer of funds two weeks ago.
The mobile operator was slapped with a R72.2 billion fine by the Nigerian Communications Commission for its failure to disconnect around 5 million unregistered SIM cards on its network.
The original deadline for payment of this fine was the end of today. However, in a statement to shareholders, says that its newly installed acting CEO, Phuthuma Nhleko, is currently negotiating with the Nigerian authorities and the deadline has been suspended until talks are concluded.
“Shareholders are advised that the Executive Chairman of the Company, Mr Phuthuma Nhleko, has personally met with the Nigerian authorities to continue the ongoing discussions with them regarding the fine of N200,000 for each unregistered subscriber (“the fine”), the equivalent of US$5.2 billion imposed on MTN Nigeria by the Nigerian Communications Commission (“NCC”),” the statement reads.
“These discussions include matters of noncompliance and the remedial measures that may have to be adopted to address this. Although the Nigerian Communications Commission (“NCC”) set a deadline for payment of the fine by Monday, 16 November 2015, shareholders are advised that the Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded,” it adds.
MTN’s share price has slumped 22% over the last month ever since news of the fine broke. Shareholders have had every reason to be concerned since the R72.2 billion fine owed to the NCC is more than double the mobile operator’s annual earnings.