MTN recently announced that the Nigerian Communications Commission (NCC) imposed a fine equivalent to $5.2 billion (around R71 billion) on MTN Nigeria.
The fine was imposed because MTN Nigeria did not disconnect 5.1 million subscribers as required by the country’s SIM registration rules.
Africa Analysis telecoms analyst Dobek Pater said the situation is similar to South Africa’s RICA laws, where only registered SIMs are allowed on mobile networks.
MTN said the “fine relates to the timing of the disconnection of 5.1 million MTN Nigeria subscribers, who were disconnected in August and September 2015”.
The fine of 1.04 trillion naira is based on a fine of 200,000 naira for each unregistered subscriber who was not disconnected.
MTN Nigeria said it is in discussions with the NCC to resolve the matter.
MTN messed up: analysts
Ashraf Mohamed, an executive director at Sycamore Fund, said MTN’s trading volume at around 11:00 on the day of the fine announcement – shortly before the company’s required SENS announcement – was very high.
“Around an hour later the SENS announcement was made. Somebody certainly went in and sold those shares with insider knowledge,” he said.
Mohamed said he will be surprised if the JSE does not investigate the trades which happened before MTN’s announcement.
Business Day TV host Giulietta Talevi said MTN would almost certainly have been aware of the fine, and for them to not put out a statement early in the morning was “very poor form”.
Anchor Securities Portfolio Manager Deryck Janse van Rensburg agreed, saying that transparency for a large company like MTN is vital.
He said investors and shareholders need to know what is going on, and that a company should inform the market about possible issues “sooner rather than later”.
MyBroadband asked MTN for comment regarding the issue, but the company did not respond by the time of publication.