Telecommunications giant to challenge Nigerian fine

AP News
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Posted: Dec 18, 2015 7:39 AM

JOHANNESBURG (AP) — MTN, one of Africa's largest telecommunications companies plans to challenge Nigerian authorities over a hefty fine, the corporation said on Friday.

Acting on legal advice, South Africa-based MTN believes it has "valid grounds" to challenge the Nigerian Communications Commission's $3.9 billion fine in the Federal High Court in Lagos, the group said in a statement. MTN will contest the commission's power to impose a penalty and the amount demanded, said MTN spokesman Chris Maroleng.

"The manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC's powers under the Nigerian Communications Act," the statement said.

The Nigerian commission fined MTN for failing to deactivate 5.2 million unregistered cellphone SIM cards by an August deadline, a matter of national security in Nigeria where law enforcement says cellphones are used in extremist attacks and kidnappings.

"They have not written to us officially, but if they eventually do we (will) meet them in court," the commission's spokesman Tony Ojobo was quoted in the Daily Trust, a Nigerian newspaper. "They want to test our legal and regulatory might and we are surely going to show them."

The fine, reduced from $5.2 billion, is more than the $2.6 billion profit MTN reported making in Nigeria last year. News of the fine in October saw MTN's stock price drop. The company has also replaced several senior staff members. The CEO of MTN Nigeria resigned along with the head of regulatory and corporate affairs in Nigeria. In South Africa, the group's CEO stepped down.

Nigeria, with 62 million subscribers before the deactivation, provides about a third of the MTN Group's profits, according to the company website. MTN has 233 million subscribers in Africa, Asia and the Middle East, the website said.