MTN in Nigeria advised to drop lawsuit over fine for out-of-court settlement talks

South African wireless operator MTN should drop its legal action over a US$5.2 billion (recently reduced to US$3.9 billion)fine imposed in Nigeria to help facilitate talks on a possible settlement, the Nigerian telecommunications minister said on Tuesday.

The Nigerian communications regulator – the Nigerian Communications Commission (NCC) – imposed a US$5.2 billion fine on MTN in October for failing to disconnect users with unregistered SIM cards but after weeks of negotiations reduced it by 25 percent.

MTN, which makes about 37 percent of its revenue from Nigeria, then filed a suit in the West African country questioning the regulator’s legal grounds for imposing the penalty. “I am not aware of any out-of-the-court settlement,” telecommunications minister Adebayo Shittu told reporters.

According to Shittu, MTN might be advised to withdraw the court case filed against the fine. “If they withdraw it creates a better environment, an environment where there is no stress or pressure on either side,” he said.

A judge in Lagos, Nigeria’s commercial capital, last week gave the company until March 18 to try to reach a settlement with the Nigerian authorities over the fine. The prospect of a lower fine boosted MTN shares. The fine equates to more than twice MTN’s annual average capital spending over the past 5 years.

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

Source: The Africa Report