N1.4trn penalty too heavy to bear – MTN
Three days after Nigerian Communications
Commission, NCC slammed a N1.4 trillion penalty
on MTN Nigeria for failure to disconnect
customers with unregistered SIM cards, Parent
company MTN group has cried out that the fine
was too extreme, even as it continues to engage
the regulator on how to resolve the issue.
MTN Group noted with dismay that Nigerian
Communications Commission refused to listen to
its plea to reconsider its stand on the penalty
slammed on its Nigerian arm last week.
According to a report, MTN Nigeria
spokeswoman, Chineze Gbenga-Oluwatoye, had
said in an e-mailed response, that
“recommendations were put forward with respect
to the non-commensurable nature of the fine but
the Nigerian Communications Commission did
not accept recommendations that the fine of
200,000 Naira ($1,005) per SIM was too heavy.”
‘‘MTN Nigeria contacted the regulator with
concerns that a demand to disconnect SIM cards
by a certain deadline would cause “severe
disruption” for customers and recommended a
staggered process to limit the possible impact,’’
said Oluwatoye.
As a result of the fine, MTN shares plummeted
about 20 percent this week in Johannesburg. The
biggest four-day drop since 2008, valuing the
company at about 284 billion rand ($21 billion).
A MTN service provider tries to register a client’s
SIM card in Lagos, on October 27, 2015. Nigeria’s
telecommunications regulator has fined South
African mobile giant MTN $5.2 billion for missing
a deadline to disconnect unregistered SIM cards,
the company announced on Monday. The penalty
saw shares in Africa’s largest
telecommunications company crash more than
12 percent to 167 rand on the Johannesburg
Stock Exchange, the biggest fall the firm has
suffered in a day since November 1998. AFP
PHOTO
The phone operator had said on Monday that the
Nigerian Communications Commission is seeking
the penalties because it missed a deadline to
disconnect 5.1 million subscribers and is
reviewing its management in the country.
Moody’s Investors Service had on Thursday
lowered it’s rating for MTN to negative from
stable following the fine.
“Key concerns raised to the NCC highlighted the
difficulty of carefully reviewing the data on 18.6
million records within the one week deadline to
ensure identification and disconnection of only
affected subscribers,” Oluwatoye added.
Meanwhile, Financial analysts have pointedly
said that Nigeria government is at risk of scaring
off investors it can’t afford to lose if the N1.4
trillion fine slammed on MTN holds through.
With an economy struggling to cope with sliding
oil prices, the experts said currency restrictions
and no finance minister, authorities are doing
themselves no favors by penalizing one of their
biggest foreign investors.
According to fund managers including David
McIlroy of Alquity Investment Management
Limited, the fine equates to more than 20
percent of Johannesburg-based MTN’s market
value.
“It’s the last thing Nigeria needs, given the
economic and political struggles it’s contending
with at the moment,” McIlroy, chief investment
officer at Alquity, which oversees $100 million of
frontier market stocks, including MTN shares,
said by phone from London