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The Nigerian Communications Commission is likely to continue negotiating for a higher penalty after cellular operator MTN was reported to have made a settlement offer of $1.5 billion (R23 billion).
Dobek Pater, a telecommunications and market analyst at Africa Analysis, said the Nigerian authorities were likely to ask for more.
However, MTN would not comment on the reported settlement offer, and instead warned shareholders on Friday to avoid making decisions about their stock based on media reports.
Pater said confirmation this week by Nigeria’s President Muhammadu Buhari that the failure of MTN to disconnect 5.1 million subscribers by deadline last year had allegedly allowed terrorist group Boko Haram to operate undetected – since the SIM cards were not registered – was unlikely to severely dent MTN’s image in the industry.
Buhari made the statement during President Jacob Zuma’s visit to the west African nation this week. “MTN’s image has been affected by the terrorism link, but this is not new,” said Pater. “Buhari merely confirmed it.
“What customers are worried about is whether MTN can still deliver on its network coverage,” he added. “The image may have suffered, but they have had a good image as a sophisticated company with 60 million users in Nigeria, and they will rebuild that image.”
Buhari was quoted as telling the media that: “You know how the unregistered GSM [technology used to transmit voice and data systems] is being used by terrorists. That was why the commission asked MTN, Glo and the rest of them to register GSM.
“Unfortunately, MTN was very slow and contributed to the casualties.”
The commission slashed the fine by $1.3 billion to $3.9 billion in December, and MTN paid $250 million towards the fine two weeks ago. However, Pater said he believed that the $1.5 billion settlement offer, if true, was still too high.
“Nigeria needs MTN and vice versa. There are 60 million subscribers to think of,” said Pater, adding that resolving the matter was important for both parties.
MTN spokesperson Chris Maroleng referred City Press to a statement that said the group would continue engaging Nigerian authorities “to ensure an amicable resolution”.
