The MTN Group has reached an amicable settlement with the Nigeria Communications Commission (NCC) over the N1.04 trillion fine imposed by the regulator in October 2015 for the company’s delay in disconnecting 5.1 million unregistered lines within the prescribed deadline.
Further to several weeks of negotiations between MTN, NCC and the Federal Government, the South African firm will pay the sum of N330 billion in full and final settlement of the fine in line with an agreed payment plan.
MTN also undertakes to take immediate steps to ensure listing of its shares on the Nigerian Stock Exchange as soon as is commercially and legally possible in addition to strict compliance with its license terms and conditions as issued by the NCC.
The company’s shares responded to the news as they surged more than 20 percent at one point and traded 11.7 percent higher at 138.14 rand at 1335 GMT at the Johannesburg Stock Exchange. They have shed 22 percent since the fine was first announced.
Speaking on the issue, MTN Nigeria CEO, Ferdi Moolman said, “MTN Nigeria once again offers its most sincere apologies for the series of unfortunate events that led to the imposition of the fine” Elaborating further, he said, “It was of critical importance to reach a solution that would be of universal benefit to all stakeholders given the importance of the ICT industry in Nigeria and its tremendous impact on socio-economic growth. Along with the authorities, we believe that has been achieved.”
Regarding the company’s undertaking to list, Moolman said “MTN Nigeria is undoubtedly one of Nigeria’s success stories. Broader public participation exemplifies this.”
The Nigerian regulator said on Friday that the settlement was acceptable to both parties and that it had not been “out to kill MTN”.
“Money was not the issue here. The breach was the issue. I believe MTN has learned its lesson,” NCC spokesman Tony Ojobo told Reuters.
It will be recalled that the initial fine of N1.04 trillion was later adjusted by 25% to N780 Million. MTN Nigeria considered the fine inimical to the sustainability of its business and sought judicial determination in December 2015 to protect the extensive local ecosystem, valued and supported by MTN’s business.
However in February 2016, at the request of the Federal Government, MTN announced the withdrawal of its case against NCC and made an initial “goodwill” payment of N50 billion in order to create a conducive atmosphere for further negotiations.
At the time, Moolman said, “This is another manifestation of good faith and intent by MTN Nigeria. We have the equally good intentions of the Nigerian authorities and the strength of our mutual commitment to an amicable resolution. The high priority that the Government is giving to the sustainability of the industry assures us of a truly integrated approach amongst all parties, to the growth of ICT as a critical enabler of socio economic development in Nigeria.”
Commenting on the final resolution of the NCC fine, MTN Group Executive Chairman Phutuma Nhleko expressed his thanks to the Federal Government of Nigeria for the spirit in which the matter was resolved saying “this is the best outcome for the company, its stakeholders, the Federal Government and the Nigerian people.
“The relationship between MTN, the Federal Government and the NCC has been restored and strengthened.”
Nhleko, who was MTN chief executive for nine years until 2011, was appointed on an interim basis for six months in November but has stayed an extra two months as the company negotiated with Nigerian authorities.
