Embattled wireless giant MTN, pays $250 million toward fine – hopes for settlement with Nigerian regulator

Embattled South African wireless operator MTN, has withdrawn its lawsuit against Nigeria’s Communication’s regulator – the Nigerian Communication Commission (NCC) – over a US$3.9 billion fine and paid US$250 million toward a possible settlement.

A judge in Lagos last month gave both parties until March 18 to reach a settlement, after MTN had asked the court to arbitrate over the dispute, saying the NCC had no legal grounds to impose the fine.

MTN, which makes 37 percent of its sales in Nigeria, said it would withdraw its court challenge in an effort to reach an amicable settlement and make a “good faith payment” of US$250 million toward a possible settlement. “This is a sign that the fine could be reduced much further. There is some sort of negotiation taking place and the parties are migrating towards a common ground,” said Dobek Pater, managing director of Africa Analysis.

The original penalty of US$5.2 billion, eventually reduced to US$3.9 billion was based on fining the company US$1,000 for every unregistered SIM card in use.

Shares in MTN, which are down about a third since the fine was first announced in October, rose 1.3 percent to 129.53 rand (US$8.34).

Nigeria has been trying to halt the widespread use of unregistered SIM cards amid worries they are being used for criminal activity, including by the jihadist group Boko Haram.

The fine also came months after new president Muhammadu Buhari, won the elections after an campaign which pledged tougher regulation and a fight against corruption.

Source: Reuters