Johannesburg - The Independent Communications Authority of South Africa (Icasa) has said MTN’s [JSE:MTN] $5.2bn fine shows the importance of complying with regulation.
On Monday last week MTN announced it has been fined $5.2bn by the Nigerian Communication Commission (NCC) after failing to disconnect 5 million unregistered SIM cards in the country.
Fin24 then reached out to Icasa to ask if MTN’s troubles in Nigeria could have any impact for the company in its home market of South Africa.
“Icasa is unable to comment on the latest developments regarding MTN in another jurisdiction except to note that such developments are significant in that they illustrate the importance of taking compliance to all relevant legislation seriously,” said Icasa.
MTN has also faced scrutiny from Icasa this year in South Africa.
In March Icasa ordered MTN to halt collecting 0.25 US cents in interconnect fees when terminating international calls.
And in March 2014, MTN and Vodacom went to the South Gauteng High Court to challenge Icasa’s decision to cut mobile termination rates. Mobile termination rates are what networks charge each other for calls made between them.
The court ruled that the interconnection rates were “unlawful and invalid”, but the order was suspended for six months with lower termination rates eventually coming into effect.
MTN’s shares have declined about 20% since news of the fine broke last week Monday. The stock traded at R149.35 at 13:48.
On November 2 the Johannesburg Stock Exchange briefly suspended trade in MTN. The JSE is also investigating the mobile network for how it announced the fine last week, and for trades which occurred just prior to the announcement.
Meanwhile, the Public Investment Corporation (PIC), which has a 16.6% stake in MTN, has also stressed the importance of adhering to regulations in all countries.
"As a responsible investor the PIC expects of investee companies to adhere to all the legislation of the countries in which they operate," the PIC told Fin24 in an emailed statement.
"We are equally concerned that MTN seems to have failed to anticipate the fine and take preventative actions. We are, however, hopeful that this matter will be addressed soon for the benefit of all interested stakeholders," said the PIC.