By Tiisetso Motsoeneng
JOHANNESBURG, Dec 3 (Reuters) – MTN Group will lobby for further reductions to a fine imposed by Nigeria, a source familiar with the matter said, after authorities in its biggest market cut the penalty by more than a third on Thursday to $3.4 billion.
The Nigerian Communications Commission (NCC) handed Africa’s biggest mobile phone company a $5.2 billion penalty in October after MTN failed to cut off users with unregistered SIM cards from its network.
Nigeria has been pushing telecoms firms to verify the identity of subscribers amid worries unregistered SIM cards were being used for criminal activity in a country facing the insurgency of Islamic militant group Boko Haram.
Nigerian authorities reduced the fine after five weeks of talks involving government and MTN officials, and gave MTN until the end of the year to pay it, said MTN, which is based in South Africa.
But the reduced fine, if enforced, is still more than two times MTN’s average yearly capital expenditure of about $1.5 billion over the last five years.
So, Nigeria has blinked. MTN fine now at "just "R50-bn" – crippling. MTN also reorganizing its business. This is forcing long overdue focus.
— Bruce Whitfield (@brucebusiness) December 3, 2015
“The fine is still big enough to cripple MTN’s ability to invest in its network and that’s what further talks with the NCC are about,” said one source, who spoke on condition of anonymity.
Nhleko, who took charge for up to six months after the abrupt resignation last month of Sifiso Dabengwa, led the company for nine years before stepping down in 2011.
The fine came months after Muhammadu Buhari swept to power in Africa’s biggest economy, after a campaign in which he promised tougher regulation and a fight against corruption.
An NCC source told Reuters the decision to reduce the fine was taken by President Buhari’s office, which passed on the information to the NCC late on Wednesday.
