MTN’s Nigeria operations face $5 billion fine

The Nigeria Communications Commission (NCC) has slammed a $5.2billion (N1.4trn) fine on MTN Nigeria for failing to disconnect subscribers with unregistered SIM cards bought before January 2012. “The regulator has approached the matter in a quite heavy-handed way, but there seems to be no outright objection from MTN in the announcement of the fine”.

Telecommunications group MTN has confirmed that the Nigerian Communications Commission has imposed a fine on its Nigerian subsidiary of a massive $5,2bn, sending its shares plummeting lower.

The NCC said all other telecom firms operating in Nigeria complied with the directive except MTN, Tony Ojobo NCC’s director of public affairs said.

MTN is one of the biggest telcos in Nigeria.

A second trader confirmed the share was falling as a result of the report. “We are law abiding and we have always done our business within the confine of the Acts”, he said. The amount is even bigger than the entire budget of the Federal Government of Nigeria.

The fine which is the largest in the history of telecom infringements may redefine the relationships between telecommunications operators and the regulator.

“Our negative investment thesis still remains”, Faircliff said.

Though MTN has said it is working with the Nigerian regulator to resolve the matter, there is a concern with investors that the South African telco might have to cough up the full fine.

The allegations are inaccurate and Stanbic “does not agree that its accounts are defective or require rectification”, the bank said in a statement e-mailed by spokesman Usman Imanah, adding that a legal case was ongoing. Stanbic’s shares fell 5% to 21.85 naira by the close of trading in Lagos, dropping the most in more than two months.