Nigeria’ telecommunications minister, on Tuesday, advised South African telecommunications firm MTN, to drop its legal action over a $5.2 billion penalty imposed by the Nigerian telecoms regulator last year.
The Nigerian Communications Commission (NCC) fined MTN $5.2 billion in October over failure to disconnect unregistered lines. It later reduced the fine to $3.9 billion following negotiations that went on for weeks, putting a deadline of Dec. 31 for the telco to pay the fine. The telco, backed by a suit it filed at a Lagos court to determine whether NCC had legal grounds for imposing the penalty, failed to pay by the deadline. Reports say by not following the deadline, MTN would have to pay the initial $5.2 billion, should the court favour NCC.
MTN, which had more than 62 million subscribers as at September 2015, had said the court action was a last resort after negotiation failed to yield good fruits. But the company said it would continue engaging the authorities to reach an amicable resolution of the issue.
A Federal High Court in Lagos, during the week, adjourned MTN’s suit till March 18, following a request by the telco for more time to pursue an out of court settlement.
But Nigeria’s telecoms minister Adebayo Shittu told reporters he had no knowledge of any settlement plans. “I’m not aware of any out-of-the-court settlement,” he said.
The minister advised MTN to withdraw the case from the court but said President Muhammadu Buhari will decide the matter.
“If they withdraw it creates a better environment, an environment where there is no stress or pressure on either side,” he said.
MTN, which makes about 37 percent of its revenue from Nigeria, is keen about its business in the country. But the fine, if paid, will weigh heavily on its finances. The company’s 2015 profit will be able to pay just 18 percent of its fine should it be forced to pay.