South African owned MTN Group said Wednesday it had paid N50billion to the Federal Government in a dispute over a $3.9billion fine imposed last year for failing to disconnect unregistered users.
The company also said it had agreed to withdraw its legal challenge over the huge fine in a case that was adjourned in Lagos High Court to enable the two parties to try to negotiate a settlement.
“Pursuant to the ongoing engagement with the Nigerian Authorities, MTN Nigeria has today made a… good faith payment of 50 billion naira,” Johannesburg-based MTN said in a statement.
The money was paid “on the basis that this will be applied towards a settlement, where one is eventually, hopefully arrived at,” the statement added.
“In an effort to achieve an amicable settlement, MTN has agreed to withdraw the matter from the Federal High Court in Lagos.”
Nigeria, Africa’s most populous country, is the MTN group’s largest market, where it had more than 62.8 million subscribers by the second quarter of 2015.
MTN was slapped with the penalty in October 2015 after it missed a deadline to disconnect 5.1 million unregistered SIM cards.
The Nigerian Communications Commission (NCC) cited security concerns over the inability to trace users as the country tackles frequent kidnappings and an extremist Islamist insurgency, Boko Haram.
It imposed a N1.04trillion fine that was later reduced to N780billion following an appeal by MTN.
The company issued a profit warning last week and said the Nigerian dispute was a factor in falling earnings.
The fine also led to the sack of Group Chief Executive, Sifiso Dabengwa; Nigeria’s Chief Executive Officer, Michael Ikpoki, and Head of Regulatory and Corporate Affairs, Akinwale Goodluck.
Nigeria’s four major phone companies have routinely been fined in the past for regulatory infractions but none has received as big a punishment as MTN.
The initial fine of N1.04trillion was more than MTN’s total sales in Nigeria in 2014 and the equivalent of about 37 percent of the group’s total revenue, according to Bloomberg News.
