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MTN negotiating $5.2b fine for security failure
1. 11/22/2015 MTN negotiating $5.2b fine for security failure to deactivate unregistered subscribers | Tech Channel MEA
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MTN negotiating $5.2b fine for security failure to deactivate
unregistered subscribers
Source: Arun Shankar
Publish date: 03 Nov 2015 Print Email
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Trading of MTN shares resumed on 3 November after
falling sharply on 2 November and being suspended for
trading by Johannesburg Stock Exchange. The
announcement follows a $5.2 billion fine levelled against
MTN Nigeria by the Nigerian Communications
Commission over alleged delay in disconnection of
unregistered SIM cards.
On 26 October 2015, MTN released an official statement
advising shareholders that the Nigerian Communications
Commission has imposed a fine equivalent to $5.2
billion on MTN Nigeria. According to the statement, the
fine relates to the timing of the disconnection of 5.1
million MTN Nigeria subscribers who were
Trading of MTN shares resumed on 3 November after falling sharply on 2 November and being suspended for
trading by Johannesburg Stock Exchange. (Source Google Finance UK)
Trading of MTN shares were suspended on 2 November at Johannesburg Exchange
when price fell more than 6% following announcement of fine for failure to comply
with security requirement of deactivating unregistered subscribers.
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2. 11/22/2015 MTN negotiating $5.2b fine for security failure to deactivate unregistered subscribers | Tech Channel MEA
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disconnected in August and September 2015 and is based on a fine of 200,000 Nigerian Naira
for each unregistered subscriber. The statement also said that MTN Nigeria is currently in
discussions with the Commission to resolve the matter in recognition of the circumstances that
prevailed with regard to these subscribers.
Subsequent to the initial announcement, a statement was made on 30 October 2015, advising the
shareholders to exercise caution when dealing in MTN securities until further notice. The
company said that the Group CEO is engaging with the Nigerian authorities on the regulatory
aspects of the matter. In addition, senior management of the company and its advisors are
currently engaging with the Johannesburg Stock Exchange on the timing of the Stock Exchange
News Service announcement.
On 2 November 2015, MTN released another statement which says shareholders should
specifically exercise caution when reacting to information on this matter which has not been
released by the company. Shareholders are therefore advised to continue to exercise caution
when dealing in the company’s securities until a further announcement is made.
The registration of phone subscribers in the Federal Republic of Nigeria commenced on March
28, 2011. The registration of existing SIM cards officially ended in January 2012. Other telecom
players in Nigeria include Airtel, Etisalat and Glo.
According to Tech Central on 2 November, MTN is also facing a probe by Johannessburg Stock
Exchange into possible insider trading related to the timing of its first statement to shareholders
about the Nigerian Communications Commission imposed fine.
30 day trend in MTN share price, where the first dip occurred before 26 October, when MTN announced the
imposition of $5.2 billion fine by Nigerian Communications Commission for failure to disconnect 5.1 million
unregistered subscribers. (Source Johannesburg Stock Exchange)
30 day trend in MTN share price, where the first dip occurred before 26 October, when MTN announced the
imposition of $5.2 billion fine by Nigerian Communications Commission for failure to disconnect 5.1 million
unregistered subscribers. (Source MTN)
3. 11/22/2015 MTN negotiating $5.2b fine for security failure to deactivate unregistered subscribers | Tech Channel MEA
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Summary of MTN stock information closing 2 November. (Source MTN)
The Nigerian Communications Commission website lists the objectives of SIM registration.
Excerpts.
To assist security agencies in resolving crimes and by extension to enhance the security of the
state.
To facilitate the collation of data by the Commission about phone usage in Nigeria.
To enable operators to have a predictable profile about the users in their networks.
To enable the commission to effectively implement other value added services like Number
Portability among others.
A SIM card is the card issued by mobile phone operators which provides the individual user with
the appropriate number recognised by that network. A subscriber inserts the card into his or her
mobile phone to access the mobile phone network. Since the launch of GSM services in Nigeria
in 2001, SIM cards were offered to subscribers without the requirement to provide proper
identification by the users. Sometime in early 2008, security agencies approached The Nigerian
Communications Commission to assist in resolving crimes perpetrated through the use of phones
in which criminal elements cannot be identified with the number of the phones that they used.
Consequently, the Commission held a consultative forum involving various telecoms operators,
consumer groups, security agencies, telecoms associations, dealers, the Nigerian Identity
Management Commission, National Population Commission, National Census Commission, the
media and a host of others.
All the participants agreed that it is appropriate and necessary to register phone users in the
country. Another committee was then set up to further look at the details of the implementation
of the registration programme and submit its recommendations to the Nigerian Communications
Commission.
Upon reviewing the recommendations of the committee, the Board of the Nigerian
Communications Commission approved the registration of all phone subscribers in the Federal
Republic of Nigeria. This commenced on March 28, 2011, when the official flag off of the
registration of all SIM cards was performed by Dr Eugene Juwah, the Executive Vice Chairman
of the Nigerian Communications Commission in Abuja.
The Registration of existing SIM cards officially ended in January 2012. However, network
operators will continue to register new SIM cards. On completion of the validation,
harmonisation and scrubbing of the records of all registered SIM cards, operators will be
authorised to disconnect unregistered SIM cards from the networks.
