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In
this Monday April. 22, 2013 file photo, staff of MTN Nigeria work during the
launch of mobile number portability in Lagos, Nigeria. (AP Photo/Sunday Alamba)
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Nigerian authorities
have renewed the operating license of the MTN telecommunications group as the
company faces a multi-billion dollar fine for failing to comply with
regulations in the West African nation. The South African-based MTN Group said
on Tuesday Nov. 3, 2015 that the Nigerian Communications Commission extended
its operating license to 2021 in Nigeria, its biggest market.
Africa's biggest
telecommunications company is locked in a nasty battle with one of the most
powerful governments on the continent, with billions of dollars at stake. MTN Nigeria, MTN Group's
subsidiary here, was fined US$5.2 billion for failing to meet an August
deadline to deactivate 5.2 million unregistered cellphone SIM cards —
considered a security threat with Nigeria confronted by an Islamic uprising and
rampant kidnappings and armed robberies.
The
fine amounts to nearly two years' profits for MTN Nigeria, by far the company's
most profitable subsidiary. It also equals nearly a quarter the national budget
of Nigeria, which has been hammered by the global plunge in oil prices.
Nigeria's is Africa's biggest oil producer and President Muhammadu Buhari, who
was elected this year, says he inherited depleted coffers as he struggles to
create jobs and fulfill other campaign promises.
In
a telephone interview Thursday with The Associated Press, Tony Ojobo, the
spokesman for the Nigerian Communications Commission, said the regulator won't
buckle to pressure from MTN shareholders to reduce the fine levied against the
South African-based telecommunications giant.
Underscoring
the perceived reliance on mobile phones by Islamic extremists in Nigeria's war,
the military regularly cuts cellphone service in areas under attack by Boko
Haram. Unregistered mobile phones can also be used by criminals to hide their
tracks. Ojobo said unregistered MTN SIM cards were used to make calls demanding
ransom in the September kidnapping of former Finance Minister Olu Falae.
Institutional
shareholders in MTN, the biggest telecommunications company in Africa, have
complained that the huge fine is punitive, and warned it could hurt investor
confidence in Nigeria, Africa's most populous nation of about 170 million
people.
South
Africa's Public Investment Corporation, MTN's biggest shareholder with more
than 15 percent of shares, said Tuesday it is concerned about the fine and
allegations that MTN did not immediately disclose it to shareholders, according
to Daniel Matjila, CEO of Public Investment Corporation. The Johannesburg Stock
Exchange is investigating.
Ojobo
said Nigeria's four cellphone service providers signed an agreement that set
the fine at ₦200,000 (about US$1,000) for each unregulated SIM card in
2011. He said MTN was the only company not to comply and that the 5.2 million
cards were actually deactivated by the regulator. Until a couple of years ago,
people could buy SIM cards without producing identity documents. The
regulations are aimed at helping law enforcement and security forces to track
criminals.
Ojobo
even said "there is an orchestration to try to blackmail the
regulator," without offering details.
"MTN
should operate in the rule of law — the same rule of law that protects ...
investment," he told AP. He added that in South Africa, MTN has ensured 98
percent compliance in registering its SIM card holders.
In
Johannesburg, MTN spokesman Chris Maroleng said the company is above board in
its dealings with Nigeria.
"MTN
is committed to engaging with authorities in Nigeria ... (adhering) to the
highest principles of sound corporate governance and transparency,"
Maroleng said.
South
Africa and Nigeria are fierce financial rivals. The high-stakes spat has become
political, with Nigerian Vice President Yemi Osinbajo, a corporate lawyer,
heading the Nigerian team negotiating with MTN executives from South Africa.
Despite
the furor, the regulating authority in Nigeria agreed this week to extend MTN
Nigeria's operating license until 2021 for US$94.2 million. MTN shares gained 5
percent on Tuesday's news after losing nearly a quarter of their value over the
fine.
MTN operates in 22
countries in Africa and the Middle East and reports having 233 million
subscribers, more than 60 million of them in Nigeria.
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