Telecoms giant MTN pays $250 mn in Nigeria fine dispute - Sabi Tips

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Telecoms giant MTN pays $250 mn in Nigeria fine dispute


South African telecoms giant MTN said
Wednesday it had paid $250 million to
the Nigerian government in a dispute
over a $3.9-billion fine imposed last
year for failing to disconnect
unregistered users.

The company also said it had agreed to
withdraw its legal challenge over the
huge fine in a case that was adjourned
in Lagos High Court to enable the two
parties to try to negotiate a settlement.



“Pursuant to the ongoing engagement
with the Nigerian Authorities, MTN
Nigeria has today made a… good faith
payment of 50 billion naira ($250
million),” Johannesburg-based MTN said in a statement.

The money was paid “on the basis that
this will be applied towards a settlement, where one is eventually, hopefully arrived at,” the statement added.

“In an effort to achieve an amicable
settlement, MTN has agreed to withdraw the matter from the Federal High Court in Lagos.”

Nigeria, Africa’s most populous country,
is the MTN group’s largest market, where it had more than 62.8 million
subscribers by the second quarter of
2015.

MTN was slapped with the penalty in
October 2015 after it missed a deadline
to disconnect 5.1 million unregistered
SIM cards.

The Nigerian Communications
Commission (NCC), the country’s
telecoms regulator, at the time cited
security concerns over the inability to
trace users in a country plagued by
frequent kidnappings and an extremist
Islamist insurgency, Boko Haram.

It imposed a $5.2-billion fine that was
later reduced to $3.9 billion (3.6 billion
euros) following an appeal by MTN.

The company issued a profit warning
last week and said the Nigerian dispute
was a factor in falling earnings.

The fine also led to the resignation of
chief executive Sifiso Dabengwa and
some Nigerian executives.

Nigeria’s four major phone companies
have routinely been fined in the past for regulatory infractions but none has
received as big a punishment as MTN.
The initial fine of $5.2 billion was more
than MTN’s total sales in Nigeria in 2014
and the equivalent of about 37 percent
of the group’s total revenue.

Analysts fear Nigeria’s decision to fine
MTN will deter investors at a time when
the country is reeling from the plunging
oil price.

The NCC and Nigerian government werenot immediately available to comment.

MTN will announce its full-year
financial results on March 3.

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