MTN is facing the $5.2 billion penalty for failing to disconnect customers with unregistered SIM cards. The penalty is too big comparing the annual revenue of $3.6 billion MTN generated from Nigeria in 2014.
Phuthuma Nhleko will be the executive chairman in a temporary capacity for six months. He is the non-executive chairman at present. MTN will be looking for a new CEO.
“Due to the most unfortunate prevailing circumstances occurring at MTN Nigeria, I, in the interest of the company and its shareholders, have tendered my resignation with immediate effect,” said Sifiso Dabengwa.
Nhleko served as non-executive director and chairman of MTN from July 2001 until June 2002 and thereafter as an executive director, group president and CEO until March 2011. He has subsequently chaired the Group in a non-executive capacity for the past two and a half years.
About RS Dabengwa
Before his appointment as group president and CEO, Sifiso was MTN’s group chief operations officer for 7 years. He started MTN career as managing director of the South African operations. In 2004, Sifiso was promoted to chief operating officer of MTN Group and chief executive officer of MTN Nigeria.
Prior to joining MTN, Sifiso was executive director in the electricity industry various roles. Before joining the electricity industry, he worked as a consulting electrical engineer in the building services industry and in the mining and railway sectors.
MTN Nigeria contributes 37% revenue
MTN Group is the largest wireless operator in Africa with nearly 233 million customers. MTN competes with India’s Bharti Airtel.
Nigeria is MTN’s biggest and important telecom market. MTN has more than 62 million customers in Nigeria. MTN has generated 54 billion rand ($3.9 billion) in Nigeria in 2014, about 37 percent of total revenue.
The phone operator said on October 26 that the Nigerian Communication Commission is seeking the penalties because it missed a deadline to disconnect 5.1 million subscribers. Johannesburg-based MTN is in talks with Nigerian authorities over the penalty.
Interestingly, the telecom regulator has renewed the license of MTN Nigera for another five more years despite the controversy.
MTN’s operating spectrum, which was issued along with the digital-mobile license in 2001 with an original expiry date of February 2016, has been extended to August 31, 2021. MTN has to pay $94.2 million by December 31 to secure the license for the 900MHz and 1800MHz frequency bands and the extension. Apart from its digital-mobile license, MTN also has a unified access permit and a 3G spectrum license in Nigeria.