MTN’s fine dispute with Nigerian regulators over unregistered sim cards will be settled out of court. Africa’s largest operator says it has paid $250 million in “good faith” to Nigerian regulators as it continues to explore ways to settle the matter. ”MTN Nigeria today made an agreed without prejudice good faith payment of N50 billion ($251.3 million) to the Federal Government of Nigeria on the basis that this will be applied towards a settlement, where one is eventually, hopefully arrived at.”
Since last October, the South African-based company has been faced with crisis after crisis after an initial record $5.1 billion fine which was later reduced to $3.9 billion. In the aftermath of the fine, there was a major boardroom shakeup amid a historic decline in its stocks.
Given the damage the enormity of the fine would do its business, MTN sought legal recourse as it challenged the authority of the Nigerian Communications Commission to impose the fine but the court eventually allowed both parties to reach an out of court settlement. To boost its chances, MTN hired Eric Holder, former US attorney general, who negotiated major settlement cases (paywall) while in office. Now, it appears the move may have paid off.
Nigeria, MTN’s biggest market, is crucial to the company’s operations. Following weak performance in Africa’s largest economy in the last business year, the company warned of a 20% drop in full-year profits as its average revenue per user steadily declined for most of last year.
Regardless, MTN is pressing on with its Nigerian business as it has focused on improving its broadband capability by acquiring Visafone, a local CDMA network, in January.