A senior official of the company said it was in talks with the regulator over the fine and hoped to resolve the matter.
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MTN last week reported a slowdown in quarterly subscriber growth on last week citing stiff competition and tougher regulation in Nigeria.
In a notice sent out to its shareholders today, MTN confirmed that the Nigerian Communications Commission (NCC) fined it $5.2 billion for failing to disconnect 5.1 million unregistered sim cards before the end of the August and September deadlines, as set by the NCC. In its latest trading udpate, MTN said it disconnected 5.1 million customers in August for failure to register, but has since reconnected about 3.4 million of those.
From that date, anyone buying a sim card in Nigeria has had to register it under their name by law.
Chris Maroleng, the Johannesburg-based spokesman for Africa’s largest mobile operator, declined to comment.
MTN’s stock declined more than 12%, the biggest one-day decline since November 1998, to 167 rand.
Technology Times said in its report: “MTN Nigeria will pay the landmark fine for allegedly undermining efforts by the Nigerian government to tackle security challenges and the war on terror and allied crimes, as the telecoms operator has allegedly refused to deactivate unregistered mobile phone lines on its network…”
Nigeria is MTN’s biggest market.
“Events like this, even if the final outcome is a lesser fine, still highlight the unmanageable risk of doing business in highly regulated industries in emerging markets”, James Faircliff, a money manager at Tower Capital Management (Pty) Ltd., in Johannesburg, said.
MTN Headquarters in South Africa.
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The Lagos-based company’s directors have been directed to withdraw the annual reports, the FRC said in the statement.
