Is relief finally headed in MTN’s way?
MTN Group Limited has stated that the Nigerian Communications Commission (NCC) has lifted the suspension on regulatory services slammed against it in October 2015 over failure to deactivate 5.2 million incomplete subscriber identification module (SIM) cards on its network. This is could be an indication that relations between both parties could be warming up as they negotiate the payment of a record $3.9 billion fine.
“NCC has lifted the suspension on regulatory services to MTN Nigeria,” the Johannesburg-based company said in a statement on yesterday. This comes as a relief to MTN as this allows Africa’s biggest wireless operator to seek approvals for promotions and other plans to grow in the company’s biggest market, which is Nigeria.
The suspension of the regulatory sanction may just signal a headway to the deadlock between MTN and the government according to the lawyer in charge of the case. “This is essentially another move in the tit-for-tat negotiation process lifting the regulation huddle is a positive step and means a solution to the fine might be around the corner,” Dominic Cull, a regulatory lawyer at Cape Town-based Ellipsis Regulatory Solutions, said.
It should be noted that in October 2015, NCC imposed a $5.2 billion fine on MTN, which was reduced to $3.9 billion after much deliberations between both parties. This came after MTN wrote a letter to NCC pleading for leniency and promising never to ignore subsequent orders and guidelines, as well as asking for reduction in the fine.
In February, MTN had issued a warning that it expected about 20 percent loss in its dividend from the Nigerian market. The telecoms company had also on March 5, 2015, said, in its full year 2015 financial results, its Nigerian operation in particular witnessed a very difficult year, and that the ‘not so good’ economic conditions and the limited availability of US dollars contributed to a lower-than-expected performance.
On 24 February 2016, MTN Nigeria made a payment of N50 billion ($250 million) to the Federal Government of Nigeria in relation to the NCC for its offence on the basis that this would be applied towards a settlement.
MTN Nigeria also agreed to withdraw the lawsuit from the Federal High Court while negotiations with the regulatory authorities are ongoing.