Nigeria kidnap case helped to trigger fine on South Africa's MTN

By Chijioke Ohuocha and Tiisetso Motsoeneng

LAGOS/JOHANNESBURG (Reuters) - When Nigeria failed to trace owners of SIM cards used by kidnappers of a prominent politician in September,
it was the final straw for the west African country after what it called a string of violations by telecoms firm MTN Group.

Africa's biggest mobile phone company was given a $5.2 billion penalty by the Nigerian Communications Commission (NCC) last month after the South African company failed to cut off users with unregistered SIM cards from its network.

Nigeria has been pushing industry players to verify the identity of their subscribers on worries that unregistered SIM cards were being used for criminal activity in a country facing Islamic militant group Boko Haram's insurgency.

The fine, which is based on a $1,000 for each phone line MTN failed to cut off, has left investors, including its biggest shareholder, wondering how the company failed to comply with the law that carried such a heavy penalty.

"We are equally concerned that MTN seems to have failed to anticipate the fine and take preventative actions," said the Public Investment Corporation, MTN biggest shareholder with about 16.6 percent stake.

The NCC raised the prospect of a penalty on MTN Group and other players in Africa's biggest economy at least two months before imposing the fine on the Johannesburg-based company.

But the final straw for MTN, according to an NCC source, came a month after the high profile kidnapping of former Nigerian Finance Minister and runner-up candidate in the 1999 presidential election, Olu Falae, on Sept. 21.   Continued...