- Regulator imposed sanctions on MTN for poor service quality
- Phone company shares down 19% after warning on earnings
MTN Group Ltd. is in talks with Nigerian regulators over the lifting of sanctions imposed on Africa’s biggest wireless company for failing to meet phone-service quality standards, the Nigerian Communications Commission said.
The NCC is investigating whether Johannesburg-based MTN, the biggest mobile-phone company in Nigeria, is now compliant with standards, spokesman Tony Ojobo said by phone on Friday. The sanctions, which included the withdrawal of regulatory services, were imposed in December, he said.
MTN shares pared declines after news of the discussions. The stock had fallen as much as 20 percent, the most in 18 years, after the company said late Thursday that 2015 earnings fell due to the withdrawal of regulatory services in Nigeria and the disconnection of customers. The stock traded 19 percent lower at 124.99 rand as of 1:45 p.m. in Johannesburg, the lowest since Feb. 3, valuing the company at 231 billion rand ($14.9 billion).
“MTN was here last week to discuss these sanctions and how they could be bridged,” Ojobo said. “MTN has agreed to comply and we have some people in the field now to make sure that MTN is indeed doing what they promised. We will accordingly lift the sanctions if the company is compliant.”
The settlement of a record $3.9 billion fine imposed on MTN by the regulator last year wasn’t discussed, Ojobo said, as lawyers representing both sides were leading the negotiations. The penalty was levied on MTN in October for missing a deadline to disconnect 5.1 million subscribers that were found by the government to be unregistered in a clampdown on security. A Lagos court last month adjourned a hearing called by MTN until March 18 so the two sides could reach a settlement.
“Our lawyers and their lawyers are in talks and trying to reach some kind of agreement,” Ojobo said.
MTN stock is down more than a third since the fine was first made public on Oct. 26.