MTN to drop Nigeria fine lawsuit, pays $250m to further talks

South African telecoms giant MTN said Wednesday it had paid $250 million to the Nigerian government in a dispute over a $3.9 billion fine imposed last year for failing to disconnect unregistered users.

The company also said it had agreed to withdraw its legal challenge over the huge fine in a case that was adjourned in Lagos High Court to enable the two parties to try to negotiate a settlement.

“Pursuant to the ongoing engagement with the Nigerian Authorities, MTN Nigeria has today made a good faith payment of 50 billion naira ($250 million),” Johannesburg-based MTN said in a statement.

The money was paid “on the basis that this will be applied towards a settlement, where one is eventually, hopefully arrived at,” the statement added.

“In an effort to achieve an amicable settlement, MTN has agreed to withdraw the matter from the Federal High Court in Lagos.”

Nigeria, Africa’s most populous country, is the MTN group’s largest market, where it had more than 62.8 million subscribers by the second quarter of 2015.

MTN was slapped with the penalty in October 2015 after it missed a deadline to disconnect 5.1 million unregistered SIM cards.

The Nigerian Communications Commission (NCC), the country’s telecoms regulator, at the time cited security concerns over the inability to trace users in a country plagued by frequent kidnappings and an extremist Islamist insurgency, Boko Haram.

It imposed a $5.2 billion fine that was later reduced to $3.9 billion (3.6 billion euros) following an appeal by MTN.

The company issued a profit warning last week and said the Nigerian dispute was a factor in falling earnings.