South Africa’s MTN has written to authorities in Nigeria asking for “leniency” and requesting a review of a $5.2 billion fine imposed on the telecoms provider for failing to cut off unregistered SIM card users, a regulatory source said on Tuesday.
MTN sent a copy of the letter addressed to telecommunications regulator NCC to Nigeria’s presidency, the source said, without providing specific details about the review. A second source confirmed MTN had sent a letter.
Nigeria’s telecoms regulator gave MTN Group two weeks to pay the $5.2 billion fine imposed on the mobile phone company.
The Nigerian Communications Commission (NCC) imposed the penalty on Monday, hitting Africa’s biggest mobile phone operator’s stock price. Nigeria is MTN’s biggest market by subscribers.
Some analysts have said the size of the fine risked damaging Nigeria’s efforts to shake off an image as a risky frontier market for international investors.
MTN had said on Monday the NCC imposed the fine for failing to disconnect subscribers with unregistered or incomplete SIM cards, under a directive given to all network operators which the regulator said only MTN had failed to comply with.
NCC spokesman Tony Ojobo said MTN had until Nov. 16 to make the payment, but the two sides were in talks to resolve the matter. “The outcome of the discussion may affect the date. That’s why they are having the discussion so that they can reach a solution,” Ojobo said.
Nigeria’s presidency and internal security agency were also involved in the talks, a regulatory source said.
MTN shares, up 3 percent at 159.03 rand by 0955 GMT in a slightly higher JSE Top-40 index, have slumped about 20 percent since Monday, knocking more than 60 billion rand ($4.4 billion) off the company’s market value.
If it stands, the penalty would wipe out more than two years of MTN’s annual profits.
MTN also said in a statement it was talking to Johannesburg bourse operator JSE Ltd about the timing of the announcement of the penalty. Its original confirmation of the fine came only after an online report by Nigeria’s Leadership newspaper.
Under South African capital markets rules, companies are required to immediately warn shareholders of any materially price-sensitive information.