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MTN agrees to pay $1.7bn fine in three years

10/06/2016 14:25

South African telecoms giant MTN said Friday it would pay a $1.7 billion fine to the Nigerian government in a “full and final settlement” over its failure to disconnect unregistered mobile phone users.


The Johannesburg-based company said in a statement that “MTN Nigeria has agreed to pay a total cash amount of Naira 330 billion over three years.” Africa’s biggest wireless operator was fined $3.9 billion last year and has since been in negotiations with the Nigerian government over the size of the penalty.


The company was hit with the huge demand amid fears that some of the 5.1 million affected lines were being used by Boko Haram insurgents. After the settlement was announced, MTN shares rose 10 percent, on track for their biggest gain since 2008, on the Johannesburg Stock Exchange, according to Bloomberg News.


The Nigerian Communications Commission (NCC), the country’s telecoms regulator, handed down the fine last year citing an inability to trace users in a country plagued by frequent kidnappings and Boko Haram militants.


“MTN is pleased to inform shareholders that the matter has been resolved with the Federal Government of Nigeria,” the company statement said.


MTN executive chairman Phuthuma Nhleko “expresses his thanks and gratitude to (the government) for the spirit in which the matter was resolved,” it added.


MTN paid one instalment in February and has scheduled six other payments to cover the sum by May 2019.


“The concern of the federal government was basically on the security, not the fine imposed on the MTN,” President Muhammadu Buhari said in March. “You know how the unregistered GSM (Global System for Mobile communication) are being used by terrorists,” he said.


“That was why NCC (Nigerian Communications Commission) asked the MTN, Glo and the rest of them to register GSM.


The Nigerian government made no immediate comment on the MTN statement.

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