MTN South Africa gives $1.5 billion to pay up Nigeria fine

South African telecoms firm MTN Group has offered $1.5 billion to settle a much larger fine from Nigerian regulators for missing a deadline to disconnect unregistered SIM card users, a document seen by Reuters shows.

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Africa’s biggest mobile phone group has been in talks with Nigerian authorities to have the $3.9 billion penalty reduced and last month made a “good faith” payment of $250 million towards a settlement.

In a letter to the Nigerian government from MTN’s lawyer, former U.S. Attorney General Eric Holder, the company proposed a 300 billion naira ($1.5 billion) settlement to be paid through a combination of government bond purchases, cash instalments and network access to the Nigerian government.

Holder said in the letter, dated Feb. 24, the offer “ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria.”
Johannesburg-based MTN said on Friday talks with the Nigerian government were on-going.
“MTN has previously advised shareholders not to make decisions based on press reports and MTN again urges its shareholders to refrain from doing so,” it said.

Nigeria’s telecoms ministry had no immediate comment.
In its annual results last week, MTN said it had put aside $600 million to cover a deal over the fine, which was originally set at $5.2 billion on the basis of charging $1,000 for every unregistered SIM card.
Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.

The fine, equating to more than twice MTN’s annual average capital expenditure over the past five years, came months after Muhammadu Buhari was swept to power after an election campaign which pledged tougher regulation and a fight against corruption.

Shares in MTN, which makes about 37 per cent of its sales in Nigeria, were little changed at 147.53 rand at 0839 GMT, after rising more than 2 per cent shortly after the market opened. One dollar is equivalent to 199.0000 naira

Source Reuters

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