Africa’s largest mobile operator, MTN will challenge a $3.9bn Nigerian fine in court after resolving that the penalty that has wiped more than 25% off the company’s value was not within the powers of the country’s telecommunications regulator to impose.
The company will also continue to engage with the Nigerian authorities to try and ensure an amicable resolution, MTN said in a statement on Thursday.
Pending the court hearing, neither party should take further action until the matter is resolved, the company said.
There are valid grounds upon which to challenge the fine. Accordingly MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs.
“There are valid grounds upon which to challenge the fine,” MTN said. “Accordingly MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs.”
The Nigerian Communications Regulator imposed the penalty on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers as security agencies seek to fight crime in a country with poor identity records.
Chairperson Phuthuma Nhleko is leading negotiations with the NCC after Chief Executive Officer Sifiso Dabengwa resigned.
The initial fine of $5.2bn was reduced by 25% to $3.9bn earlier this month, with a payment deadline set for December 31.
Nigeria has been pushing telecoms firms to verify the identity of subscribers amid worries unregistered SIM cards were being used for criminal activity in a country facing the insurgency of Islamic militant group Boko Haram.
The fine came months after Muhammadu Buhari swept to power in Africa’s biggest economy, after a campaign in which he promised tougher regulation and a fight against corruption.
Some analysts have said the size of the fine imposed by MTN risked damaging Nigeria’s efforts to shake off its image as a risky frontier market, but others said it showed Abuja was keen to enforce the law.
MTN has 231 million subscribers in 22 countries across Africa, Asia and the Middle East and over 60 million in Nigeria, making it that country’s biggest mobile network.