MTN to Apologies for Misstep in Nigeria

 
MTN will reportedly issue an apology to the Nigerian government and people within one month of the execution of a settlement agreement on a hefty fine in Nigeria. This is according to a copy of the agreement seen by Reuters.

On Friday, MTN announced it had agreed to pay $1.671 billion (R25.4 billion) to the Federal Government of Nigeria, over three years, effectively settling a record fine levelled against it in October 2015.

The settlement amount is less than a third of the original $5.2 billion (R80 billion) fine that was slapped on MTN by the Nigerian Communication Commission (NCC) for failing to meet a deadline to disconnect 5.1 million unregistered SIM cards on its Nigerian network.

The West African nation has been cracking down on unregistered SIM cards amid concerns they are being used for criminal activity, including by Islamist militant group Boko Haram.

MTN's leadership and Nigerian authorities have been engaged in negotiations for months over the fine. In early December, the NCC reduced the hefty penalty by 25% to $3.9 billion (R60 billion), an action which Nigeria's parliament later questioned.

House of Representatives expressed surprised by last week's deal as its own probe into the MTN fine has not yet been concluded. In March, the lower house launched an investigation into whether reducing the initial fine would require changing the law.

"The issue is that from MTN's point of view, the matter appears to be settled as they stated it's a full and final settlement," says Ovum senior analyst Richard Hurst.

"However, I see some rumblings coming from certain quarters of the Nigerian government, such as senators who want a review of the process. However, I think these voices may just be dissenting and the new settlement is a far more reasonable fine," he adds.

The telco still needs to pay around R21.5 billion towards the fine, after a $250 million (R3.8 billion) "good faith payment" was already made in February. At the time, the agreement was that the payment would be applied towards a settlement of the fine, once reached.

In the Friday's agreement, MTN will pay the remaining penalty in six instalments over the next three years. MTN's first payment of around R2.3 billion is due on 8 July.

The same amount will be paid on 31 March 2017. Thereafter, four instalments of around R4.2 billion each will be paid on 31 March 2018, 31 December 2018, 31 March 2019 and 31 May 2019.