The Nigerian telecommunications regulator, the Communications Commission, recently slapped MTN with a rather hefty fine – $5.2 billion (N1.04 trillion) to be exact – for failing to disconnect customers with unregistered (RICA) SIM cards.
The sum amounts to double MTN's annual profits for 2014. The NCC gave MTN just two weeks to pay - the amount due by 16 November.
Many believe this was too-harsh a penalty, and indeed MTN is trying to get the fine reduced. The company has been in talks with the Nigerian presidency, internal security agency and the NCC about this. No details have been released regarding by how much MTN has requested the fine be reduced.
- After conquering Nigeria and Ghana for MTN in various CFO and CEO roles, Brett Goschen was 'redeployed' as Group CFO. Read the interview with him here.
The story goes that the Nigerian Communications Commission (NCC) ordered all mobile phone companies to register their customers' SIM cards by August, or face the penalty of sanctions. The reasons for the strict RICA regulation are allegedly to limit communications of Nigeria's various armed criminal and terrorist groups. It is alleged that some 5.2 million MTN users have unregistered SIM cards.
Johannesburg-based MTN has some 230 million-plus subscribers in 22 countries across Africa, Asia and the Middle East. Nigeria is the company's biggest market, with around 62 million customers as of end September. The company's in-country competitors include Bharti Airtel Ltd, Emirates Telecommunications Group Company PJSC, and Glo Mobile.
Despite these events, the NCC has agreed to extend the MTN Group's operating licence - there were fears that the fine would first need to be settled before a renewal was granted.
Whether or not MTN will end up paying the fine, or whether it will be reduced and if so, by how much, remains to be seen. We'll keep you updated.