Nigeria says its record $5.2 billion fine for MTN is about rule of law

Register those SIM cards.
Register those SIM cards.
Image: Reuters/Afolabi Sotunde
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The decision by the Nigerian government to impose a record $5.2 billion against MTN has sent shock waves in the African business world, with analysts suggesting that it might scare off foreign investors from the country. But the Nigerian Communications Commission (NCC), says “non-compliance” and “obvious disregard” of the rule of law by the South African-based mobile operator compelled the regulator to issue the hefty fine.

“[It] was done in the interest of the public which has been at the receiving end of security challenges,” NCC said in a statement, signed by Tony Ojobo, director of public affairs at NCC. It is the first extended insight behind the regulator’s decision.

In 2011, NCC issued an edict that required mobile operators in Nigeria to disconnect unregistered SIM cards from their networks. The regulator argued that instances where such SIM cards have been used for criminal and terrorist purposes made it difficult for authorities to track assailants.

In August, the major mobile companies in Nigeria were fined by the regulator for failure to adhere to the law and given a week to de-activate the unregistered lines. While other mobile firms complied, MTN flouted the regulator’s instructions, leaving 5.2 million unregistered users on its network.

“As a responsible regulator, the NCC will not stand by and watch rules and regulations for engagement being flouted by any operator,” the statement says. “More so, when national security is at stake.”

The fine was due on Monday (Nov. 17), but MTN managed to secure a postponement until negotiations between the two parties over the fine had concluded. Some analysts seemed to think that the government, in the end, might reduce the fine. Not so, the regulator says.

“The fine remains,” the statement says. “But the appeal and other engagements with MTN may affect the payment deadline.” The implications seems to be that some kind of “staggered payment,” something that has been mooted in the local Nigerian press, may be in the cards.

The NCC was also keen to emphasize that the penalty against MTN was about enforcing government regulations and not scaring off those who want to do business in Nigeria.

“Sanctions are the last resort after all overtures fail but this does not in any way undermine industry standards and the interest of investors.”