MTN faces call for Nigeria fine to be tripled to $15.6bn

30 March 2016 | Alan Burkitt-Gray


Members of Nigeria’s House of Representatives is calling for the $5.2 billion fine originally imposed on mobile phone operator MTN to be tripled to $15.6 billion – just as the Nigerian government is trying to negotiate the fine down.

Nigerian authorities have already said the fine should be $3.9 billion and it looked earlier in March as if it would be reduced to $1.5 billion. The legal dispute is causing friction between South Africa – where the MTN group is based – and Nigeria, with presidents of both countries getting involved in the negotiations.

MTN warned investors not to make decisions based on what it called “false press reports” and “rumours”.

The Nigerian Communications Commission, the country’s regulator, imposed the fine on MTN Nigeria in late 2015 because the company had not cancelled service to unregistered SIM cards. The NCC said that there were 5.1 million unregistered SIMs in operation and set the fine at the local currency equivalent of $1,005 per card.

The regulator held that many of these cards were used by people associated with the Boko Haram terrorist organisation, which is believed to be responsible for thousands of murders and which kidnapped hundreds of schoolgirls – most of them still missing – in 2014.

Representative Ehiozuwa Agbonayinma was quoted by Nigerian daily ThisDay as suggesting the fine be tripled. The speaker of the House of Representatives said that the law would have to be changed before the fine could be reduced.

MTN said in a statement: “MTN has previously advised shareholders not to make decisions based on press reports and again urges them to refrain from doing so. The company continues to engage with Nigerian authorities in an attempt to ensure an amicable resolution to this matter in the interest of MTN Nigeria, its stakeholders and the Nigerian authorities. To this end, we shall await clarity and further guidance on the fine from the Federal Government of Nigeria.”