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MTN refuses to pay Nigerian fine; threatens market exit

MTN Nigeria has claimed that it refuses to pay “a dime or penny” of the $3.9 billion fine that it has incurred in the market for failing to comply with security regulation.

The penalty was issued to MTN by the regulator NCC (Nigerian Communications Commission) for failing to disconnect unregistered SIMs as part of a crackdown on terrorist activity. All other major operators complied with the order.

Nigerian newspaper Business Journal has quoted a “top” MTN official as saying that the operator is considering two options for avoiding the fine – which has already been reduced by 25% from $5.2 billion following negotiations - and one of them may be to exit the market.

MTN is lodging a legal challenge against the penalty, with the unnamed source claiming that lawyers had been instructed to “keep the matter perpetually in court, up to the supreme court” until the current government – and the NCC’s leadership - no longer holds office. While Nigeria’s current administration is in its first term, even if it procures a second, the source has claimed that MTN “can keep the case in court beyond 10 years”.

The same source added that paying the fine would bankrupt MTN in the market, and claimed that the NCC’s motivations were questionable, which could result in the operator pulling out of the lucrative market. “Our second strategy is to leave the Nigerian market entirely and expand into other territories in Africa and probably, the Middle East, to cushion the expected revenue gap from Nigeria.”

However, MTN leads the Nigerian market with over 65 million connections; it is therefore highly debatable whether it would seriously consider withdrawing from the country. It has also recently renewed its Nigerian operating licence up to 2021, as well as acquiring local CDMA operator Visafone to improve the quality of its Nigerian broadband offering.

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