On Tuesday MTN Nigeria reported that the firm had made a profit of about $955 million (R15.8 billion), a far cry from the $3.9 billion (R65 billion) fine issued by the Nigerian Communications Commission (NCC) to MTN late last year.
A report on Business Day Live confirms that MTN Nigeria will show a profit of $955 million (R15.8 billion); however, the threat of a fine that would effectively take 95% of MTN’s annual turnover still looms.
The fine was imposed because MTN failed to disconnect over 5 million improperly registered and unregistered SIM cards in the West African country. Originally, the amount set forth by the NCC was $5.2 billion but after appealing the fine it was reduced to $3.9 billion.
MTN Nigeria Chief Executive Officer, Ferdi Moolman was quoted as saying, “The size of the fine blows my mind… It is huge. How do you fix it? Operating in the telecoms world has become challenging.”
Some light at the end of the tunnel
With sanctions on Iran recently being lifted, MTN will now be able to recover approximately $1.1 billion from Irancell, which MTN owns a 49% stake of. Doing so only nets MTN enough cash for just under a third of the current fine, though, and it is unclear how soon MTN will be able to access those funds.
Africa’s largest mobile network is also challenging the fine in court. MTN is arguing that the size of the fine and the way it was imposed, were not in line with the powers of the NCC as defined by the Nigerian Communications Act.
Through all of this Moolman has said that MTN has learnt its lesson and will now begin work to restore relationships with the NCC, stakeholders and its customers.[Via – Business Day Live] [Image CC by 2.0 – Warren Rohner]