An MTN office in Lagos: firm wants to sue NCC over fine

South Africa’s MTN Group said on Thursday it would challenge in a Lagos court a fine imposed by Nigeria’s telecoms regulator, the Nigerian  Communications Commission for failing to cut off unregistered users.

MTN was handed a $5.2 billion fine in October, prompting weeks of lobbying that led to the penalty being reduced by 25 percent earlier this month.

On Thursday, MTN said it had instructed lawyers to take the matter to court in Lagos, saying it had valid grounds to challenge the size of the penalty and manner in which it was imposed.

“The manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act,” it said

The legal action gives MTN more time to resolve the matter as it restrains the NCC from taking any further action if the company fails to pay the fine by the Dec. 31 deadline.

MTN also said the decision to go to court was also prompted by a “review of circumstances leading to the fine” but did not give any details.

Sources have told Reuters that MTN was in talks with the regulator about the exact number of people to be cut off when the NCC, on advice from the state security agency, decided to impose the fine.

Shares in MTN jumped 6.31 percent to 138.20 rand by 1511 GMT, paring losses since the fine was imposed to about 25 percent.

Rating agency Moody’s downgraded MTN’s rating on Wednesday to Baa3, or just one-notch above junk, citing uncertainty around the outcome of the fine in Nigeria, MTN’s biggest market.

Separately, MTN said it has paid $196 million in total for operating licenses in Ghana and Ivory Coast, it said on Thursday, cementing its position in west Africa.

MTN said it has paid 75 billion CFA francs ($124 million) to extend its operating license in Ivory Coast.

MTN also said it would pay $67.5 million to Ghanaian telecoms authorities to buy a 15-year radio frequency spectrum that would enable it to roll out high-speed networks.