South African mobile phone operator, MTN Group, withdrew its lawsuit against Nigeria’s National Communications Commission, over a N780 billion fine, and paid N50 billion toward a possible settlement.
A judge in Lagos last month gave both parties until March 18 to reach a settlement.
The settlement was opted for after MTN had asked the court to arbitrate over the dispute, saying the NCC had no legal grounds to order the fine.
MTN said it would withdraw its court challenge in an effort to reach an amicable settlement and make a “good faith payment” of N50 billion toward a possible settlement.
The group makes most of its sales in Nigeria.
“This is a sign that the fine could be reduced much further.
“There is some sort of negotiation taking place and the parties are migrating toward a common ground,” said Dobek Pater, Managing Director of Africa Analysis.
Nigeria has been trying to halt the widespread use of unregistered SIM cards amid worries they are being used for criminal activity, including by the Islamist group, Boko Haram.
MTN said in a statement that it resolved to withdraw the case in response to a request by the NCC to afford it the chance to negotiate an amicable settlement.
MTN Nigeria Chief Executive Officer, Ferdi Moolman, said the decision to withdraw the case was to create a conducive atmosphere for further negotiations with the Nigerian authorities.
“This is a most encouraging development,” Mr. Noolman said. “It demonstrates a willingness and sincerity by both parties to work together towards a positive outcome.”
The NCC had imposed a N1.04 trillion fine on MTN Nigeria in October 2015, for its failure to disconnect 5.1 million improperly registered lines within the prescribed deadline.
The penalty was based on fining the company N200, 000 for every unregistered SIM card in use.
Although the fine was subsequently reduced by 25 percent to N780 billion, MTN Nigeria had refused to pay, saying doing so could force the company to go under.
The company later went to court.
Mr. Moolman said with the withdrawal of the court case and the payment of N50 billion that the company was hopeful about reaching an amicable resolution of the crisis soon.
“Along with the authorities (NCC), it is clear that we are collectively committed to working towards a solution that is of mutual benefit to all parties.
“Our industry in Nigeria is an incredibly important example of the remarkable progress in ICT, particularly as a much needed catalyst for socio-economic growth and development at this time,” Mr. Moolman said.
It is not clear whether the NCC has accepted the condition or terms under which the case was withdrawn by MTN.
The Director of Communication, NCC, Tony Ojobo, told PREMIUM TIMES it was too early to comment. He did not elaborate.