MTN Says $5.2 Billion Nigeria Sim Card Penalty Is `Too Heavy'by , , and
MTN contacted Nigerian Communications Commission with concerns
MTN failed to disconnect 5.1 million customers before deadline
MTN Group Ltd. said a fine of $5.2 billion levied by Nigeria’s telecommunications regulator for failing to disconnect customers with unregistered SIM cards is too extreme as Africa’s biggest phone company continues to discuss the penalties with the watchdog.
The Nigerian Communications Commission “did not accept recommendations that the fine of 200,000 naira ($1,005) per SIM was too heavy,” MTN Nigeria spokeswoman Chineze Gbenga-Oluwatoye said in an e-mailed response to questions on Thursday. “Recommendations were put forward with respect to the in-commensurable nature of the fine.”
MTN Nigeria contacted the regulator with concerns that a demand to disconnect SIM cards by a certain deadline would cause “severe disruption” for customers and recommended a staggered process to limit the possible impact, Gbenga-Oluwatoye said.
MTN shares have plunged about 20 percent this week in Johannesburg, the biggest four-day drop since 2008, valuing the company at about 284 billion rand ($21 billion). The phone operator said on Monday the Nigerian Communications Commission is seeking the penalties because it missed a deadline to disconnect 5.1 million subscribers and is reviewing its senior management in the country, according to a person familiar with the matter.
Moody’s Investors Service lowered it’s rating for MTN to negative from stable following the fine, the company said on Thursday.
“Key concerns raised to the NCC highlighted the difficulty of carefully reviewing the data on 18.6 million records within the one week deadline to ensure identification and disconnection of only affected subscribers,” Gbenga-Oluwatoye said.