MTN dares FG over $5.2bn fine

• Negotiates its huge investment in Nigerian economy
• As NCC awaits outcome of negotiation to enforce fine

By ODUNEWU SEGUN

THE biggest multinational operator in the telecommunications industry in Africa, MTN, has remained adamant in its non-compliance with the sanction imposed by the Nigerian Communication Commission (NCC) for flouting SIM card registration regulations. The South African telecom company, after deliberate undermining of the authorities of the Federal Government of Nigeria through the federal agencies in the telecom sectors, shifted its recalcitrant attitude to the negotiation table where, National Daily gathered, MTN is now playing out the joker of the company’s huge investment in the Nigerian economy.
MTN’s attitude which appears to be deployed to intimidate the Nigerian Government, has been working for the South Africa Company to the extent that the NCC and the Minister of Communication have seemingly become ‘handicapped’ to enforce the sanction, while the communications minister resorted to the paradox of making self-appeal that the matter can only be decided by the President, the highest level of decision on law enforcement in Nigeria.
MTN, like other telecoms operators were in August slammed with N120.4 million fines. The telecommunications firm was asked to pay N102.2 million as fine, followed by Globacom, which was fined N7.4 million. Etisalat paid N7 million and Airtel got of N3.8 million for SIM cards contraventions. While other operators showed no resentment to compliance with the fine, MTN remained heady and tacitly intimidating the government to evade compliance. NCC extended the deadline for compliance which was undermined by MTN before finding decoy in the on-going negotiation with the federal government which involves the parent company in South Africa.
Apparently, with the expiration of the November 16, 2105, deadline given by the NCC to MTN to pay a fine of N1.04 trillion over the telecom operator’s refusal to deactivate its 5.1 million unregistered lines, it was obvious the telecom giant is not ready to pay the fine.
Although, the NCC shifted ground last week by giving an extension which it said was without prejudice to the fine because of the on-going negotiations between Nigerian Government and South African delegation of MTN, the telecom giant still maintains its recalcitrant behaviour.
It was also gathered that the NCC had agreed that the fine will not be payable until the end of negotiations entered into by Acting Executive Chairman of MTN, Phuthuma Nhleko, who has taken on Dabengwa’s role for six months. Many stakeholders in the country considered this decision a weakness in enforcement of rules and regulations in the telecoms industry, perceiving MTN as a colossus that is becoming untouchable.
However, NCC’s Director of Public Affairs, Tony Ojobo, told National Daily at the weekend that the Commission is only waiting for on-going negotiation between the MTN management of the Presidency before taking further action.
More so, MTN helmsman further affirmed in a statement that, “Shareholders are advised that the executive chairman of the company, Mr. Phuthuma Nhleko, has personally met with the Nigerian authorities to continue the ongoing discussions with them regarding the fine.” Nhleko asserted that, “These discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this.” Re-affirming the bargaining strength of MTN, he added that, “shareholders are advised that the Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded.”
Industry source who confirmed the new arrangement, disclosed that the federal government is already yielding to the plea, which according to him, was part of the agreement reached at the series of meeting held at the weekend in Nigeria.
“There have been series of meeting at the Presidency between the Vice President, Professor Yemi Osinbajo, and MTN team both from South Africa and the Nigerian arm. MTN wanted a waiver considering their level of investments in the country but government did not buy the idea of waiver. Instead, I think there will be concession, but certainly not a waiver. At the conclusion of the meeting, the MTN people negotiated on how to stagger the payment. The Presidency is even angry because MTN was a signatory to the regulation, but they are failing to comply with rules,” the source declared.
Although NCC had hinted that the issue is being handled by the federal government, the telecoms authority also insists on compliance with the sanction, stating that MTN would risk withdrawal of its operational licence if it fails to comply with the fine.
Nigerians found it ridiculous when the Minister of Communications, Adebayo Shittu, publicly said that President Muhammadu Buhari will soon announce his decision on the N1.04 trillion fine imposed on MTN Nigeria by the NCC.
Probably, in a face-saving defence, the Communication Minister explained: “the good thing is that MTN did not contest the fact that they had violated the regulations and guidelines. They never contested it. They admitted they were at fault. They apologized for their role in the saga and they made a commitment that what happened will never happen again. And of course, they made a plea for review of the payment terms.”
MTN has, however, begun to experience smear image, globally, since the crisis erupted. Apart from having its shares plummeted severely on the Johannesburg Stock Exchange (JSE) to about 25 per cent since the fine was made public penultimate week, valuing the company at 289 billion rand ($20.4 billion), the issue also claimed its first casualty, in the person of the Chief Executive Officer, Sifiso Dabengwa, who tendered his resignation letter for failing to mediate effectively with the Nigerian authority.
NCC had explained that the fine of N1.04trn was in line with section 19 of the SIM Registration Regulations which specify a N200, 000 fines per unregistered SIM. This unprecedented fine, the NCC said, is indicative of the magnitude of seriousness with which the regulatory body is approaching non-compliance of the directive by any telecom operator in the country.
National Daily gathered MTN which has well over 62.8 million subscribers by the second quarter of 2015 in Nigeria alone is a serial offender of regulations in the industry, not just in Nigeria but in other African countries. For instance, it was gathered that three weeks ago, precisely November, 6, a Ugandan Judge ordered MTN to pay a Ugandan Company, Ezee Money Limited Shs2.3 billion ($662,000) for sabotaging its business. MTN was ordered to stop acting in an unlawful and anti-competitive manner, which denies other businesses an opportunity to prosper.
In addition to the above, MTN was also sanctioned by the Ghanaian Government for breach of business etiquette after the sanction in Nigeria.
A lot of questions have erupted as to what this portends to the Nigerian telecom subscribers. Some others have argued that it would be business as usual as MTN is known for flagrantly flouting instructions of the telecom regulators and go scot free.
A reliable source from the NCC was gathered to have revealed that the regulatory body is obligated to ensure strict compliance with its rules of engagement and will not bend its resolutions to ensure that the incessant occurrences of threats, kidnappings and other security related issues via telecommunication networks are brought to a halt.
Cross sections of Nigerians have complained of rip-off through poor service delivery, some feel it is going to be business as usual where things will be swept under the carpet. Others want to know why NCC is suddenly waking up to its cardinal responsibility.
According Demola Akinola, resident of Ipaja in Alimosho area of Lagos, MTN should not only be sanctioned for not deactivating improperly registered SIM Cards, but for also selling our data to companies at random. “They have really dealt with Nigerians, it is payback time. It is quite interesting to note that we are charging MTN more than twice what is in our excess crude account. I wish NCC will do all that is possible to ensure MTN learns from their mischief”, he said.
Speaking from the security angle, Chief Abiola Adeboye, a security consultant said MTN has been aiding and abetting Nigeria’s insecurity situations. “Law enforcement agencies have become a laughing stock after failing to track down people behind kidnappings for ransom. I blame mobile phone service providers more than the government as they issue the unregistered SIMs usually used for getaways and negotiations”
As the impasse continues, President Buhari, according to the Communication Minister, Adebayo Shittu, is the final authority on the matter. As it is, Nigerians are eagerly waiting to see if the Telecom giant will comply or if the matter will be swept under the carpet. Certainly, this kind of business behavior cannot be tolerated by South African Government.
The registration of all active SIMs in the country dates back to 2010 when the Office of the National Security Adviser asked NCC to direct network operators in Nigeria to start collecting biometric and non-biometric personal information for each new subscriber in an effort to improve information gathering towards enhancing national security.
MTN, which has about 233 million customers in 22 countries in the Middle East and Africa, cut its full-year forecast for subscriber numbers on October 22 after the 5.2 million Nigerian customers were disconnected following a review into how they were able to register for phone contracts.
Nigeria is the company’s biggest market, with about 62 million customers at the end of September.
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