Deputy president Cyril Ramaphosa says MTN's pending R71 billion fine in Nigeria could hurt South Africa in the long term.
Ramaphosa was responding to questions from MPs in Parliament yesterday and candidly admitted the fine from the Nigerian Communications Commission (NCC) could have consequences that stretch beyond a financial hit to the telco.
"If this fine is indeed imposed as it is it, it is going to impact on South Africa as well, as our revenue fortunes from a taxation point of view are going to be lower," he told Parliament.
The deputy president indicated the presidency would be "taking note" of how things unfolded with MTN and the NCC.
MTN got itself into hot water in the West African nation, which is its biggest market, for failing to disconnect over five million customers with unregistered SIM cards. The fine, which is the equivalent of around one trillion naira, is the combination of a fine of N200 000 for each unregistered subscriber.
"We would like our companies to comply with the laws and regulations of countries where they operate, without violating those, because they should know that wherever they operate they are carrying the South African flag," says Ramaphosa.
The presidency had not responded at the time of publication as to whether the South African government would be prepared to intervene in discussions between the NCC and MTN.
Ramaphosa is no stranger to the company after serving on MTN's board for over 10 years, before stepping down because of potential conflicts of interest after being elected deputy president of the ANC. He joined MTN's board in October 2001 and served as chairman between 2002 and 2013.
MTN may also have to face its own day in Parliament after chairwoman of the portfolio committee on telecoms, Nkhensani Kubayi, told Business Report they are setting up a date for MTN's bosses to appear before Parliament to discuss its failure to comply with regulations in Nigeria.
MTN executive for group corporate affairs, Chris Maroleng, told ITWeb yesterday that the telco "had not received formal notification from Parliament to appear".
Tight-lipped
MTN remains silent on why it failed to comply with the regulations that got it into this mess in the first place and continues to issue brief, calculated statements to the market to try quell investor worries.
The latest statement reiterates previous statements that the MTN Group "continues to engage constructively with Nigerian authorities at all levels" but the telco says so far no resolution has been reached on the matter.
Time is of the essence, however, as the mobile giant reportedly only has until 16 November to settle the fine with the Nigerian authorities.
MTN's stock has fallen over 14% since the fine was announced on 26 October. The stock was slightly down in early trade this morning, sitting at around R162 per share, although over the past few days the stock has seen some recovery, bouncing back from the R148 mark earlier in the week.
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