MTN moved closer to finalising one of its most international problems with the Nigerian Communications Commission (NCC) announcing yesterday that the mobile giant had paid a $764 million (275 billion naira or R11bn) fine for unregistered SIM cards in the country.
The NCC said Africa’s biggest telecommunications giant would pay the final 55bn naira tranche at the end of the month. NCC executive vice-chairperson Umar Garba Danbatta said the commission succeeded in empowering Nigerians “to control, manage and own telecommunications companies in Nigeria by owning shares in MTN Nigeria.”
Danbatta said that through the MTN’s listing on the Nigerian Stock Exchange (NSE), the commission had ensured the promotion of local investment and ownership in the telecoms sector.
“By MTN listing on the NSE, we have given reality to that important function of the commission. Through this listing, Nigerians will be empowered to control, own and manage one of the dominant telecommunications companies in the country,” he said.
MTN was slapped with a record $5.2bn (R74.9bn) fine in October 2015 for failing to deactivate 5.2 million unregistered SIM cards, which was later reduced to $1bn following a series of diplomatic negotiations. It was required to list MTN Nigeria on the NSE as part of the negotiated settlement. The stock has been climbing on the bourse since listing on Thursday.
Ofentse Dazela, the director for pricing research at Africa Analysis, said yesterday that the settlement would hopefully bring this issue of unregistered SIM cards to finality in Nigeria.
“This would allow MTN to expedite ongoing reforms in that market, and one hopes that they would want to ensure that they don’t find themselves in a similar situation in the future,” Dazela said.
“I do not think that there was ever a serious doubt that MTN would not be able to meet this obligation imposed on it. It is obvious that failure on the part on MTN to service this obligation would have affected the company’s share price in a very negative way.
“Perhaps we need to see how the market will respond once the last payment is made, but I doubt this would result in a significant share price movement for this company,” Dazela said.
MTN Nigeria has become the second biggest company on the NSE after Dangote Cement. MTN Group holds 78.8 percent; Nigerian investors hold 19.4 percent; and other smaller investors hold 1.8 percent of MTN Nigeria.
However, MTN is still grappling with the ongoing tax dispute with the Nigeria attorney-general, which has accused it of avoiding $2bn in taxes.
MTN, which is challenging the matter in court, declined 1.01 percent on the JSE yesterday to close at R101.16.