'USD 5.2 bn Nigerian fine against MTN is world's largest'

Nigeria's fine of USD 5.2 billion to MTN, Africa's largest telecommunications company, is billions more than any company has been fined anywhere in the world and may well scare off investors, international analysts say.
MTN was fined for having 5.2 million active but unregistered SIM cards.
"It is totally out of proportion," said industry expert John Strand of Denmark-based Strand Consult. "I have never seen any operator receiving a fine of more USD 100 million and I've been in this business for 20 years."
Until now, the United States tended to levy the highest fines. AT&T is suing the Federal Communications Commission over a USD 100 million fine the largest ever imposed by that body.

"There is no comparable fine, anywhere in the world," Roger Entner, of Recon Analytics based in Dedham, Massachusetts, said of the Nigerian sanction. "This is far beyond anything that anybody has ever been levied by magnitudes."
Unregistered SIM cards are a matter of national security in Nigeria and may have caused deaths. Boko Haram Islamic extremists use cell phones to activate bombs and coordinate other attacks, say law enforcers. Mobile phones are also used in rampant armed robberies and kidnappings.

Unregistered MTN SIM cards were used to make calls demanding ransom in the September kidnapping of a former Nigerian finance minister weeks after a deadline for providers to deactivate unregistered cards.

MTN ignored other Nigerian rules and had committed a total of 28 infractions, Nigerian Communications Commission spokesman Tony Ojobo told The Associated Press.
MTN officers "have always been flouting regulations," he declared.
The company was the only cell phone provider that failed to meet a mid-August deadline to deactivate unregistered cards, said Ojobo. The commission's enforcers wound up deactivating the millions of cards. The fine is based on sanctions of 200,000 naira (USD 1,000) for each unregistered card, an amount agreed in consultation with service providers in 2011.
Since the fine was announced, the South African-based MTN Group has lost more than 10 percent of its value. The group CEO resigned last week.

Standard & Poor's downgraded MTN and Nigeria and put both on a negative credit watch. The credit rating service cited "heightened regulatory and country risk in Nigeria" and fears that MTN's liquidity could "weaken significantly," depending on the ultimate size of the fine and the timing of its payment.