Yahoo – AFP, Sibongile Khumalo, June 10, 2016
 |
| South Africa's MTN was hit with the huge fine amid fears that some of the 5.1 million affected lines were being used by Boko Haram insurgents (AFP Photo/Pius Utomi Ekpei) |
Johannesburg
(AFP) - South African telecoms giant MTN said Friday it would pay a $1.7
billion fine to the Nigerian government in a "full and final
settlement" over its failure to disconnect unregistered mobile phone
users.
The
Johannesburg-based company said in a statement that "MTN Nigeria has
agreed to pay a total cash amount of naira 330 billion over three years."
Africa's
biggest mobile-phone operator was fined $3.9 billion last year and has since
been in negotiations with the Nigerian government to reduce the size of the
penalty.
The company
was hit with the huge fine amid fears that some of the 5.1 million affected
lines were being used by Boko Haram insurgents.
 |
The logo of
South Africa's MTN
Group is seen on signage outside
the company's headquarters
in
Johannesburg, file. Reuters/
Mike Hutchings
|
It said in
a statement that its decision to reduce the fine was based on
"professionalism and global best interest."
"We
were careful not to take decisions that were likely to cripple the business
interest of the operators we regulate," said the commission's executive
vice chairman Umar Danbatta.
"Besides,
the downturn of the global economy is biting hard on everybody and every
sector, so we must therefore be sensitive and flexible in our decisions,"
he said in the statement.
After MTN's
announcement, its shares on the Johannesburg Stock Exchange rose as much as 21
percent, on track for the biggest gain since 2008, according to Bloomberg News.
The
country's telecoms regulator had handed down the fine last year citing an
inability to trace users in a country plagued by frequent kidnappings and Boko
Haram militants.
The sum was
originally set at $5.2 billion before being to lowered to $3.9 billion on
appeal.
'Relief
to investors'
"MTN
is pleased to inform shareholders that the matter has been resolved with the
Federal Government of Nigeria," the company statement said.
MTN
executive chairman Phuthuma Nhleko "expresses his thanks and gratitude to
(the Nigerian government) for the spirit in which the matter was
resolved," it added.
MTN paid
one instalment in February and has scheduled six other payments to cover the
fine by May 2019.
"The
news is a huge relief to investors, given the fact that Nigeria ended up not
imposing the initial amount of the fine," Dobek Pater, telecoms specialist
at the Africa Analysis consultancy, told AFP.
"MTN
could not afford to lose a major market such as Nigeria and by paying the fine
it shows that they still have faith in keeping their investment there."
As part of
the deal has undertaken to "tender an apology" to the government and
people of Nigeria over the matter, according to the NCC.
It also
promised to "take immediate steps steps to ensure the listing of its
shares on the Nigerian Stock Exchange as soon as commercially and legally
possible," said the NCC.
The Boko
Haram violence has left at least 17,000 dead and forced more than 2.6 million
people from their homes since 2009.
The MTN
fine dominated South Africa's President Jacob Zuma visit to Nigeria earlier
this year.
Commenting
on the MTN penalty, President Muhammadu Buhari had in March said his government
was more concerned about national security than the fine.
"You
know how the unregistered GSM (Global System for Mobile communication) are
being used by terrorists.
"Unfortunately
MTN was very slow and contributed to the casualties," said Buhari during
Zuma's visit to Nigeria.
Relations
between the continent's two economic powerhouses have been strained over recent
years on issues including economic rivalry and political friction.
South
Africa's growth has been undermined by the slowdown in China and falling
commodity prices, while Nigeria, the continent's top oil producer, has suffered
from low oil prices.
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