Nigeria is slashing MTN's massive fine by more than a third to $3.4 billion, and the CEO of the embattled Nigerian subsidiary is resigning, Africa's largest telecommunications company said Thursday.
The fine, down from $5.2 billion, is still the largest meted out in the telecommunications industry, according to experts. They cited the U.S. Federal Communications Commission fine of $100 million that AT&T is fighting in court.
The South African-based MTN Group also announced major management changes to strengthen oversight and regulatory compliance across all 22 countries in Africa and the Middle East where it operates.
The fine must be paid by the end of the year, in four weeks' time, MTN said, and will greatly boost Nigerian coffers depleted by corruption and the low price of oil. The fine amounts to one-sixth of the West African nation's 2014 budget.
The Nigerian Communications Commission fined MTN for failing to deactivate 5.2 million unregistered cellphone SIM cards by an August deadline, despite many warnings. It's a national security issue in Nigeria, where law enforcers say Islamic extremists use cell phones to detonate bombs and criminals use them in kidnappings and armed robberies.
The reduced fine still is more than the $2.6 billion in profits MTN says it made in Nigeria last year. Group shares rose slightly on the Johannesburg Stock Exchange on Thursday, but the company still has lost more than 20 percent of its value.
MTN said Nigeria CEO Michael Ikpoki is being replaced by Ferdi Moolman, the Nigerian subsidiary's chief financial officer who previously was COO at MTN Irancell.