African mobile giant MTN has paid the Nigerian government $250 million in a bid to settle a dispute over unregistered SIM cards. Authorities feared the sim cards were being used by members of Boko Haram.
The Nigerian government slapped a record 1.04 trillion naira ($5.2 billion) fine on South Africa-based MTN in October 2015 for its failure to disconnect over five million unregistered SIM cards. The original fine, which was equivalent to double the MTN group’s annual profits, was subsequently reduced to 780 billion naira ($3.9 billion) in December 2015.
The Nigerian Communications Commission (NCC) cited concerns that failure to disconnect the SIM cards helped the militant group Boko Haram—which uses cell phones to plan attacks and detonate explosive devices—in sustaining its six-year insurgency in northeast Nigeria. The NCC was also worried that the unregistered cards could aid kidnappers. When the former Nigerian finance minister, Olu Falae, was abducted in September 2015 his kidnappers used unregistered and untraceable SIM cards. This was reportedly a factor in the NCC deciding to impose the fine. Nigeria’s four main mobile networks, including MTN, deactivated 10.7 million unregistered SIM cards on orders from the NCC in 2015, IBTimes UK reported .
In a statement reported by AFP on Wednesday, MTN said its Nigerian branch had made a “good faith payment” of 50 billion naira ($250 million) to the government “on the basis that this will be applied towards a settlement, where one is eventually, hopefully arrived at.” The company also agreed to withdraw the matter from the Federal High Court in Lagos in order to reach an out-of-court settlement.
MTN has 233 million subscribers across Africa, Asia and the Middle East, but its biggest market is Nigeria. According to the NCC, MTN Nigeria had 62.5 million subscribers in the West African country at the end of the third quarter in 2015, almost double the 31.3 million subscribers held by second-place Globacom Limited. The telecoms giant was recognized as Africa’s Most Admired Brand at the 2014 Brand Africa 100 awards, ahead of Samsung, and was also recognized as the continent’s most valuable brand, worth $4.6 billion.
The fine triggered the resignation of MTN’s chief executive Sifiso Dabengwa in November 2015. Shares in the MTN Group fell by more than 13 percent on Friday after the company warned it would announce at least a 20 percent drop in annual profit.[Source: News Week]