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N1.04 trillion fine: MTN’s Woes compound as S/African Stock Exchange Suspends Trading


Being the biggest telecommunications operator in Africa does not mean that you can do whatever you like, however you like. MTN, has learned that lesson the hard way. According to a report on PremiumTimes, the South African stock exchange, today suspended further trading in the shares of MTN, and this would not be unconnected with the N1.04 trillion fine hammered on the telecom giant for violating the directive of the Nigerian Communications Commission (NCC).

In August 2015, NCC had ordered all telecom operators to terminate all unregistered SIM cards, a directive that all other operators complied with except MTN which failed to deactivate unregistered subscribers numbering 5.1 million. This led to the imposition of the N1.04 trillion fine on the erring telecomms company. According to NCC, the company has only up to November 16 to pay up. November 16 is only 14 days (two weeks) from today. MTN is signatory to the regulation that it is accused of flouting. Section 19 of the SIM Registration Regulation specifies the sum N200,000 against each unregistered SIM.

As soon as the news of the huge fine slammed on MTN came alive in the press, its share price took a steep dive on the South African stock exchange.

MTN in talks with the NCC

MTN had initially attempted to enter talks with NCC in a bid to reduce the fine, but it appears the company has finally agreed to pay the huge fine.

“There have been series of meeting at the Presidency between the Vice President Osinbajo and MTN team both from South Africa and the Nigerian arm. MTN wanted a waiver considering their level of investments in the country, but government did not buy the idea of waiver. Instead, I think there will be concession, but certainly not a waiver. At the conclusion of the meeting, the MTN people negotiated on how to stagger the payment. The Presidency is even angry because MTN was a signatory to the regulation, but they are failing to comply with rules, the source added… It would be recalled that NCC had said that MTN would not escape the fine, owing to the enormity of its implication to national security,” says a report by Vanguardngr.com earlier today.

We believe that MTN agreeing to pay the fine is not unconnected with the firm stance of NCC that MTN would lose its operating license if it fails to pay the $5.2 billion fine. Nigeria is MTN’s largest market with about 59.3 million subscribers active on its network (that is 43% market size).

These are troubled times in Nigeria as Boko Haram terrorists and kidnappers are suspected to be using unregistered SIMs on MTN’s network. So for Nigeria, deactivating unregistered SIMs is a matter of national security.

 

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