MTN Must Respect Laws Of Host Countries – South Africa Deputy President
South Africa’s Deputy President Cyril Ramaphosa has urged Africa’s biggest mobile-phone company, the MTN Group Ltd., to follow the rules in countries where it is operating.
This followed a fine of $5.2 billion imposed on MTN by telecoms industry regulator, the Nigerian Communications Commission (NCC), for failing to disconnect customers with unregistered phone cards.
NCC gave MTN until November 16 to pay the fine, which relates to the timing of the disconnection of 5.1 million subscribers and is based on a charge of N200,000 ($1,005) for each unregistered customer.
Nigeria is the Johannesburg-based MTN’s biggest market with 62 million clients as of September.
The company’s shares have slumped 14 per cent since October 26, when the fine was imposed.
Ramaphosa, in an address to lawmakers in Cape Town yesterday, said the government would be taking note of what “is happening with a view of seeing how the company involved responds and reacts” to its challenges.
“We would like our companies to comply with the laws and regulations of countries where they operate, without violating them.
“It does seem like in the case of Nigeria, there were issues, and those issues need to be addressed.
“If this fine is indeed imposed as it is, it is going to impact on South Africa as well, as our revenue fortunes from a taxation point of view are going to be lower,” he said.
Agency reports indicated that comments by Ramaphosa, a former chairman of MTN, suggested that South African authorities might leave MTN to face its problem as it seeks to have the penalty reduced.
South African authorities might also be reluctant to confront their Nigerian counterparts following a series of diplomatic spats that have soured relations between the Africa’s two biggest economies.
The most recent occurred in April, when Nigeria’s government allegedly ordered its two most senior diplomats in South Africa to return home for consultations following a wave of attacks against immigrants, including Nigerians, in Johannesburg and Durban.
“South Africa does not have a track record of defending its national company champions internationally,” Nic Borain, a political analyst, who advises BNP Paribas Cadiz Securities, said by phone.
“On the face of it, this fine seems seriously over the top. Ramaphosa’s words about the issue seem weak as they veer too much on the side of caution,” he added.
South Africa’s telecommunication and finance ministries didn’t respond to agency’s calls and e-mails seeking comment.
Lawmakers plan to summon MTN officials to explain why the company was fined, Nkhensani Kubayi, chairwoman of Parliament’s telecommunications committee, said by phone from Cape Town.
The panel will also ask the South African industry regulator to determine whether MTN is compliant with local rules, with hearings likely to take place next year, she said.