FORGONE CONCLUSION

Nigeria postpones MTN’s $5.2 billion fine, but the damage has already been done

Quartz africa
Quartz africa

The record $5.2 billion fine issued against MTN Nigeria by country regulators was due today (Nov. 16), but has been postponed until further notice.

“Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded,” a statement by MTN said. “These discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this.”

Last month, the Nigerian Communications Authority (NCC) announced a hefty fine against the company, Africa’s largest mobile operator, after it failed to disconnect unregistered users from its network.

Ever since, the two parties have been negotiating over the details, with MTN’s newly installed executive chairman Phuthuma Nhleko personally meeting with authorities in Nigeria. At the center of the negotiations is not whether MTN will pay the fine or not. The question is whether Nigerian authorities might reduce the bill or perhaps accept some kind of an installment plan.

“A judgment has been given,” Adebayo Shittu, the new communications minister, told Reuters last week. But he was also keen to stress that the South African-based mobile firm still had a future in Nigeria, its biggest market. “Nobody wants MTN to die,” he said. “Nobody wants MTN to shut down.” This, perhaps, is why the regulator is showing some flexibility.

Earlier today, reports from Nigeria suggested that MTN had agreed to a “staggered payment” plan. MTN has denied the report.

Since the fine became public, MTN’s shares have dropped by around 13%. The company also lost its CEO and is subject to an insider trading investigation in South Africa over the manner in which it announced the news of the fine. Whatever relief the copany may get in paying the fine will be of little comfort given the pain it has already experienced.

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