MTN Said to Resist Payment of $3.9 Billion Nigeria Phone Penaltyby
Africa's biggest wireless company seeking deal with regulator
MTN has no plans to leave Nigeria, its biggest market place
MTN Group Ltd., Africa’s largest phone company, isn’t prepared to pay a revised $3.9 billion fine imposed by Nigeria’s telecommunications regulator and will continue to seek a compromise, according to a person familiar with the matter.
While the Nigerian Communications Commission this week cut the penalty on the Johannesburg-based company by 25 percent from the original $5.2 billion, MTN still considers the punishment too severe, said the person, who asked not to be identified because the matter is private. MTN has no plans to leave the West African country, which is its biggest market with about 63 million customers, the person said.
MTN spokesman Chris Maroleng declined to comment.
Nigerian authorities imposed the fine on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers. The company’s shares have declined about 29 percent since the penalty was made public on Oct. 26, and traded 2.7 percent lower at 136.18 rand as of 3:26 p.m in Johannesburg on Friday.
The NCC originally reduced the penalty by 35 percent to $3.4 billion, before changing the payable sum to $3.9 billion after noticing a typo in the letter to MTN detailing the change, the regulator’s spokesman Tony Ojobo said by phone on Friday. The payment is due by Dec. 31.
MTN will eventually have to reach an agreement with Nigerian authorities or risk being expelled from Africa’s most populous country with about 180 million people.
MTN Chairman Phuthuma Nhleko is leading negotiations with the NCC after Chief Executive Officer Sifiso Dabengwa resigned last month. The initial fine of $5.2 billion was more than MTN’s total sales in Nigeria in 2014 and the equivalent of about 37 percent of all the group’s revenue.