MTN chief executive Sifiso Dabengwa has resigned from the firm as the fallout from a $5.2bn Nigerian fine continues.
Dabengwa will be replaced on an interim basis by Phuthuma Nhleko, the firm’s former chief executive, who will lead the business for up to six months until a permanent replacement is found.
The Johannesburg-based mobile giant – the continent’s largest – has been in turmoil since the Nigerian Communications Commission accused the firm of failing to cut off 5.1 million unregistered subscribers.
“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,” Dabengwa commented.
Nigeria is MTN’s biggest market with some 62 million subscribers out of a global total of 233m. The firm, which has been given until November 16 to pay the record fine, says that it remains in talks with authorities.
Over a fifth of MTN’s market value has been wiped off since details of the fine broke out, while the company’s leadership has been criticised by analysts for perceived inaction in the face of the scandal.
“Its expected that the buck stops with him (Dabengwa), but I think the market is still looking for more clarity coming from that network operator pertaining to how it will actually deal with this challenge in front of it,” Richard Hurst, senior analyst at Ovum, told CNBC.
The affair also threatens to strain diplomatic and economic ties between Nigeria and South Africa, respectively the continent’s two largest economies.
MTN will now be looking to leverage the extensive experience of Nhleko in bringing negotiations to a satisfactory conclusion.
Nhleko most recently served as executive chairman of MTN, which he led as CEO for nine years until March 2011. For the past two-and-a-half years he has worked in a non-executive capacity.
“I will assume responsibility as Executive Chairman for the next 6 months as I 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,” he said.