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Saturday, 5 December 2015
CONFUSION! Nigeria increases its record fine against MTN by another $500 million—because of a typo
Nigeria’s regulators have increased the fine against MTN to $3.9 billion 24 hours after reducing its initial penalty by 35% to $3.4 billion from the original $5.1 billion.
“There was a typo,” Tony Ojobo, Nigerian Communications Commission’s (NCC) spokesman, explained to Bloomberg. “The reduction should have been 25 percent. We saw the mistake and had to fix it.”
On Thursday (Dec. 3) MTN received a note from the regulator stipulating that the hefty penalty imposed on them in October will be cut by a third. But the company said on Friday it received a new set of instructions raising the fine by $500 million, with the deadline still scheduled for the end of the month.
“The second letter, which was stated to supersede the first letter, informed the company that the fine had actually been reduced by 25%,” MTN said in a statement. “Neither the first letter nor the second letter sets out any details on how the reduction was determined.”
The company’s share price opened almost 5% down at the Johannesburg Stock Exchange after the announcement. This week alone has seen MTN lose 8% of its share price, down around 40% so far this year.
In an earlier Bloomberg report on Friday, sources inside MTN suggested that the South African-based mobile carrier would seek further reduction of the revised penalty announced the day before. Instead the opposite happened.
Thus far, the company has been non-committal about whether it will meet NCC’s previous and new terms. “The executive chairman Phuthuma Nhleko will immediately and urgently re-engage with the Nigerian Authorities before responding formally,” MTN said in a statement yesterday.
In October, the Nigerian regulator slammed MTN with a $5.2 billion penalty after the company, Africa’s largest telecom operator, ignored an edict to disconnect unregistered SIM cards from its networks. The fall out since then has been enormous. MTN has lost over $5 billion in market value. On top of that its group CEO Sifiso Dabengwa and its Nigeria head Michael Ikpoki have had to resign over the issue.