MTN announced CEO Sifiso Dabengwa (pictured) resigned from his position at Africa’s largest mobile operator, as he took the brunt for the company’s $5.2 billion fine in Nigeria.
“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,” stated Dabengwa in a statement.
The company, which is facing the fine after failing to cut off users with unregistered SIM cards on its network in the country, appointed Phutuma Nhkelo as executive chairman in a temporary capacity, in the wake of Dabengwa’s departure.
Nhkelo, who is accredited with the company’s expansion into international markets including Iraq and Syria, has had a long tenure at MTN, serving as non executive director and chairman from July 2001 until June 2002, and thereafter as an executive director, before being appointed group president and CEO until March 2011.
Since May 2013, he has chaired the group in a non executive capacity.
Nhkelo said for the next six months he will “proactively deal with the Nigerian regulator and will continue to work with them in addressing the issues around unregistered subscribers as a matter of urgency”.
MTN has been trying to reduce the fine, imposed by regulators Nigerian Communications Commission (NCC), after the company failed to disconnect 5.1 million subscribers between August and September. Nigeria is beefing up its efforts to verify all subscribers on telecoms networks, amid terrorism concerns.
Tony Ojobo, a spokesman for the NCC, said last week the regulator won’t buckle under pressure from MTN, stating that the country’s four operators agreed to a fine of around $1,000 for every unregulated SIM, with MTN the only company not to comply.
According to Bloomberg sources, talks are at an advanced stage concerning the penalty, with MTN due to pay up by next Monday (16 November).
Nigeria is MTN’s biggest market, with more than 64 million connections, according to GSMA Intelligence.
Despite the controversy, NCC last week approved the renewal and extension of MTN’s operating licence for another five years, through to 2021.