By Olanrewaju Oyedeji
South African-originating telecoms giant, MTN may have finally resolved its lingering dispute with Nigeria.
Under the terms of the settlement, the company is now billed to pay $1.7 billion (about N330 billion) to the Nigerian government in a “full and final settlement” over its failure to disconnect unregistered mobile phone users.
MTN, which is Africa’s biggest mobile-phone operator had been fined an unprecedented $3.9 billion last year and has since been in negotiations with the Nigerian government to reduce the size of the penalty.
Contacted, a Nigerian communications ministry official said that he could not confirm that an agreement to resolve the lingering dispute had been reached.
However, shortly after MTN’s announcement of the reprieve, its shares on the Johannesburg Stock Exchange rose as much as 21 percent, which translates into its biggest trading gain since 2008.
The Nigerian Communications Commission (NCC), the country’s telecoms regulator, handed down the fine last year citing an inability to trace users.
The sum was originally set at $5.2 billion before being to lowered to $3.9 billion on appeal.
“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.”
The MTN fine dominated South Africa’s President Jacob Zuma visit to Nigeria earlier this year.