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Industry insiders hoped MTN’s recently reappointed chief executive Phutuma Nhleko would get the Nigerian Regulator to see the high risk game it is playing by sticking with a $5.2bn fine for not de-registering non-RICA phones. But even Nhleko, the MTN chairman who moved back into the hot seat after Sifiso Dabengwa left the building last week, hasn’t been able to extract any leniency on the number. The only relaxation offered by the Regulator is on the payment terms. Inside Nigeria, the fine has been roundly applauded and extracting the money has now become a matter of pride. As a result, little credence is given to warnings of how a punishment bearing little resemblance to the seriousness of the “crime” will affect future foreign investment. Nigerians tend to live in the moment. MTN is being made an example of. And, besides, with all-important oil revenues seemingly on an endless slide, Nigeria needs all the money it can get tight now. – Alec Hogg
By Tiisetso Motsoeneng and Camillus Eboh
JOHANNESBURG/ABUJA, Nov 16 (Reuters) – Nigeria is standing by a $5.2 billion fine imposed on MTN Group for failing to disconnect unregistered SIM cards though Monday’s payment deadline may lapse while a company appeal is considered, Nigeria’s telecoms regulator said.
The Nigerian Communications Commission (NCC) had given Africa’s biggest mobile phone group until midnight (2300 GMT) on Monday to pay the penalty that has hammered MTN’s stock price and prompted the resignation of its chief executive.
NCC’s spokesman Tony Ojobo said in a statement on Monday that the regulator was looking into MTN’s plea for leniency but the fine remained because MTN has admitted to breaking the law.
“The fine remains but the appeal and other engagements with MTN may affect the payment deadline,” Ojobo said.
Nigeria has been pushing operators to verify the identity of their subscribers, concerned that unregistered SIM cards were being used for criminal activity in a country also fighting an insurgency by Islamist militant group Boko Haram.
MTN, which has asked former chief executive Phuthuma Nhleko to take charge for up to six months, has been in talks with high-ranking officials from the NCC and the Nigerian presidency for the past two weeks in a bid to reduce the fine.
“Shareholders are advised that the Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded,” MTN said in a statement earlier on Monday.
Shares in MTN, which have dropped by about 20 percent since the fine was first announced on Oct. 26, ended 0.28 percent lower at 145.25 rand.
The fine came months after President Muhammadu Buhari swept to power in Africa’s biggest oil producer, pledging tougher regulation and a fight against corruption.
“The fact that they have pushed back the deadline shows that they are seriously negotiating and perhaps we could see a reprieve,” said Imara SP Reid’s analyst Sibonginkosi Nyanga in Johannesburg.
Nhleko, who led the company for nine years before stepping down in 2011, has met with Nigerian authorities to continue the discussions, MTN said.
“These discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this,” the company said.
The fine, which is based on $1,000 for each unregistered SIM card, amounts to more than the past two years of MTN profits and is about almost one fourth of Nigeria’s 2015 budget.
Some analysts have said the size of the fine risked damaging Nigeria’s efforts to shake off its image as a risky frontier market for international investors. Others said the fine showed Nigerian regulators were keen to enforce the law.
Newly appointed Nigerian communications minister, Adebayo Shittu, told Reuters last week Africa’s biggest economy, which is also MTN biggest market by sales, did not want MTN “to die” from the fine.
NCC added the fine was the second for MTN in two months. A penalty of 102.2 million naira ($513,697) was imposed after telephone operators were given a seven-day ultimatum to deactivate all unregistered and improperly registered SIM cards.