Nigeria’s telecoms regulator has imposed a massive USD5.2 billion fine on the local arm of MTN, for failing to disconnect unregistered SIM cards. The fine relates to the timing of more than 5 million subscribers’ disconnections in August and September, Johannesburg-based MTN said in a statement Monday.
Advertisement
On August. 7, the commission issued an ultimatum ordering all cellphone providers to de-activate unregistered cards within seven days “or face severe sanctions”.
The fine is equivalent to $5.2 billion.
MTN further said it is in discussions with the NCC in a bid to resolve the matter.
MTN has the biggest share of Nigeria’s mobile market with around 43 per cent. Its rivals include Nigeria’s Globacom with a 21-per cent market share, India’s Airtel with 20 per cent and UAE’s Etisalat with 16 per cent, according to NCC’s July data.
MTN has reportedly been evading tax payment in Nigeria, using “Transfer Pricing”, which in this case involves making payments to two overseas companies located in tax asylums; MTN Dubai, and MTN worldwide in Mauritius.
Nik Kershaw, MTN Group spokesman confirmed that MTN Nigeria is also facing “ongoing regulatory restrictions” related to its market-leading position in Africa’s most populous country.
“The outcome of MTN’s refusal to comply with the directive is even more pronounced, as fully half of all the invalid registrations shared by the NCC belonged to MTN”.
“If they’re faced with a fine like that, there will be intense pressure on the regulator to either bring the fine down or give a few other form of mitigating circumstances”, Wayne McCurrie, a money manager at Momentum Asset Management, who owns MTN stock, said by phone.
TechCentral editor Duncan McLeod says the drop in shares would have been worse if MTN had not struck an agreement to negotiate with Nigerian authorities.
The fine is based on an amount of NGN 200,000 for each unregistered subscriber.
Advertisement
“MTN is working flat-out to try and finalise this”, McCurrie said.
