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South African operator agrees deal that slashes value of fine and allows it to pay in instalments.
MTN on Friday announced that it has reached agreement with the Nigerian government that will see it pay a hefty fine for its contravention of SIM card registration rules last year, but significantly less than the initial sum levied against it.
The telco has agreed to pay a total cash amount of 330 million naira, which it said equates to US$1.67 billion at the official exchange rate, over a three-year period.
The NGN50 billion it paid in February forms part of the final agreement, leaving MTN Nigeria with an outstanding balance of NGN280 billion, the operator said in a stock exchange filing.
The next payment of NGN30 billion is due on 8 July, with the remainder to be paid in instalments up to 31 May 2019.
In addition to working out a payment plan, MTN has also agreed to a number of conditions, including adhering to Nigeria’s Code of Corporate Governance for the Telecommunications Industry, which is currently voluntary but due to be made mandatory.
It has also undertaken to list on the Nigerian stock exchange as soon as possible and to ensure full compliance with the terms and conditions of its licence.
The settlement has been a long time coming.
MTN was slapped with a $5.2 billion fine in October last year for failing to disconnect unregistered SIM cards in accordance with the Nigerian Communications Commission’s (NCC’s) timeline. The fine was later reduced in size to $3.9 billion.
MTN contested the fine, but the situation cost MTN group CEO Sifiso Dabengwa his job when he was unable to broker a deal. He was replaced on a temporary basis by former CEO Phuthuma Nhleko, who took on the role of executive chairman in November with the remit of working out a solution to the problem.
He is still in situ, but given Friday’s announcement, the company will presumably name a new chief executive soon.
