File picture: Siphiwe Sibeko

Johannesburg - MTN Group withdrew its lawsuit against Nigeria’s regulator over a $3.9 billion (R59.2bn) fine and paid $250 million towards a possible settlement.

A judge in Lagos last month gave both parties until March 18 to reach a settlement, after MTN had asked the court to arbitrate over the dispute, saying the Nigerian Communications Commission had no legal grounds to order the fine.

MTN, which makes 37 percent of its sales in Nigeria, said it would withdraw its court challenge in an effort to reach an amicable settlement and make a “good faith payment” of $250m towards a possible settlement. “This is a sign that the fine could be reduced much further. There is some sort of negotiation taking place and the parties are migrating towards a common ground,” Dobek Pater, the managing director of Africa Analysis, said.

The original penalty was based on fining the company $1 000 for every unregistered SIM card in use.

Shares in MTN, which are down about a third since the fine was first announced in October, rose 0.9 percent to close trade at R129.05.

Nigeria has been trying to halt the widespread use of unregistered SIM cards amid worries they are being used for criminal activity, including by the Islamist group Boko Haram.

The fine also came months after Muhammadu Buhari was swept to power.