MTN is now challenging its $3.9 billion Nigeria fine in a Lagos court

Mobile networks are finding a way around a new policy to stop spam texts.
Mobile networks are finding a way around a new policy to stop spam texts.
Image: Reuters/Siphiwe Sibeko
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The seemingly never ending battle between MTN and Nigeria’s telecoms regulator, has taken yet another twist. Initially slammed with a record $5.1 billion fine in October. which was later reduced to $3.9 billion, MTN now says it will challenge the fine in court.

The latest twist caps what has been a whirlwind few weeks for MTN, Africa’s largest communications network. First came the announcement of the fine in October as the company was penalized for failing to disconnect as many as 5.1 million unregistered sim cards. In Nigeria, the authorities have required network operators to register all operational sim cards in their subscription base since 2011 to help to stop fraud and possible terrorist activity.

The news of the fine, which surpassed MTN’s annual revenue projections in the country, triggered a chain reaction of events. The markets reacted badly as MTN lost over $5 billion of its market cap following a historic decline in its share price and shortly afterwards, the company was subject of an insider trading investigation.

In a bid to rescue the situation and stop the bleed, MTN made its group CEO stand down and pushed out the head of its Nigeria operations while seeking to engage the Nigerian government to reach some sort of resolution. Those talks looked to be working out when the Nigerian Communications Commission first postponed the payment deadline of the fine and then followed that by announcing a reduction of the fine, eventually by 25% after an initial typo.

But now, MTN is challenging the Nigerian Communications Commission’s legal authority to impose the fine.

“MTN Nigeria acting on legal advice has resolved that the manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act and therefore there are valid grounds upon which to challenge the fine,” the statement read. “Accordingly MTN has followed due progress and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs.”

Even though it is seeking legal redress, MTN hopes to simultaneously maintain talks with the Nigerian government.  The company says it will “continue to engage with the Nigerian Authorities to try and ensure an amicable resolution in the best interests of the Company, its stakeholders and the Nigerian Authorities.”