MTN in the dock over mega fine

The first time Nigeria’s communications commission (NCC) imposed a fine for noncomplaince with the registration of Sim cards for cellphones was in the third week of August.

But, curiously, MTN Group neglected to warn its investors about the dispute with the regulator, and the potential consequences thereof.

In contravention of the listings requirements, the company withheld the price-sensitive information from investors.

That mistake cost investors about R51bn after MTN finally published the shocking statement that it had been fined US$5,2bn by the NCC.

MTN Nigeria, the country’s largest operator with 43% of the market, was fined 102m naira on August 28, according to This Day newspaper on October 5. The other three operators were also fined. Though that was only the equivalent of R6,9m, the commission made it clear this would escalate if not paid within a few weeks, and that it would impose stiffer fines for further noncompliance with regulations, the equivalent of SA’s own Regulation of Interception of Communications Act.

The Nigerian version of the act came into effect in March 2011, and the deadline for the registration of existing Sim cards was March 2012. All Sim card registrations had to be completed by August this year.

MTN Group, as did the other operators, tried to negotiate the fines down. But the regulator was fast losing patience, forcefully terminating 5,1m unregistered subscribers from MTN’s network, the company said on October 22.

Still MTN found no reason to warn its investors. CE Sifiso Dabengwa mentioned the matter only in passing and vaguely: “While management continues to engage with the regulator, performance continues to be affected by ongoing regulatory restrictions.”

Asked this week when it became aware of the Nigeria issue, MTN went to ground and declined to comment. Now it’s up to the JSE to take the matter forward.