MTN’s billion dollar sanction, matters arising

Towards the end of October, news emerged that Telecom giant MTN Nigeria had been fined a record $5.2bn by Nigeria’s Communications Commission (NCC). I don’t think I have ever heard of a fine so colossal. What heinous crime did MTN commit? MTN it turned out, had failed to comply with a deadline the regulating Nigerian […]

Towards the end of October, news emerged that Telecom giant MTN Nigeria had been fined a record $5.2bn by Nigeria’s Communications Commission (NCC). I don’t think I have ever heard of a fine so colossal. What heinous crime did MTN commit? MTN it turned out, had failed to comply with a deadline the regulating Nigerian Communications Commission (NCC) had set for all gsm mobile Networks to disconnect all non-registered sim cards.
At the time the news broke, the bother among Nigerians was not that of failure to disconnect unregistered sim cards but rather the fact that it seemed MTN basking in its high net-worth popularity, did not care a hoot about efficient delivery of service. Signals were poor, people suffered drop calls that were charged, customers were without consent enrolled in timed data schemes that were equally charged despite not being used, in effect, the public felt that MTN was fleecing it and getting away with it because authorities had been compromised. In fact allegations were rife that regulators including key members of the National Assembly were on free data service and airtime. The public mood when this sanction was announced was premised on the feeling that it served the network right, if only the sanctions would make MTN sit up and improve its services. Of course it was a surprising wake up of a hitherto slumbering regulator, desirous of exacting favourable regard from a President known to surely crack down on lackadaisical institutions.
Fall out was instant. Shares of MTN on the global stock exchange tottered briefly, with lowered credit ratings at Moody’s and Fletch. The network’s Nigerian Chief Executive Mr. Sifiso Dabengwa resigned immediately. There was a flurry of diplomatic activity between South Africa and Nigeria about a less stiff sanction on the communications giant. Happenings were bizarre. Nigeria’s Communications Minister Abdul-Raheem Adebayo Shittu duck-wobbled on the matter somewhat defending MTN sympathetically announcing that MTN would beg the President. Governors meanwhile, reeling under the yoke of salaries against the empty treasuries that they had found, urged that MTN be made to pay and the huge fund lowed into the Federation Account for sharing to States.
The decision to enforce registration of SIM cards was a critical strategy in the counter insurgency effort of the Federal Government. Registration would have facilitated access to names of persons of interest being monitored. To have not only failed to register, but as well to default in disconnecting unregistered sims was a choice of profits against the interest of the Nigerian nation. This was serious especially when it is noted that South Africa whose concerns own the foreign component of the MTN investment in Nigeria, would not tolerate such a serious infraction. It was immediately recalled that South Africa thwarted Nigeria’s bid to purchase armaments impounding over $10m that turned up in cash from Nigeria for that purpose, citing its unyielding stance on laundered cash.
MTN Nigeria is a Nigerian company whose success has implied record employment of Nigerian youth. It is erroneous to view it as a an epitome of South African “imperialism as many Nigerians feel and express. It’s entry into the Nigerian market was a risk and thank God it paid off in profits, but Nigerians have been served new technology, business access, and exponential sector growth. Of an estimated population of 120 million, over a 110 million people are believed to be accessible to the new communications tool. The impact of MTN is appreciably enormous just as the market is.
The incident brought to the fore the vexed issue of malpractice in business and the impunity that investors exhibit. For a long time, there have been agitations that the Federal Government intervened with regards to the persistent poor service delivery of the gsm network, including allegations of gross manipulation of foreign exchange channels for unhealthy repatriation of incomes to fund off shore expenditures of the companies against the national interest. It does not seem diligent that MTN failed to register and also failed to disconnect unregistered sims for a long period before the sanctions were applied. It is not sufficient that the fines are paid. The Nigerian Communications Commission must also sanction its staff who let matters be for so long. Clearly the counter insurgency effort was compromised by this serious lapse, losses are in human lives and property. Culprits must therefore be punished to force a new consciousness to duty and responsibility.
As it is, the matter has been resolved. Following negotiations between MTN and the Nigerian Communications Commission, the fine has been reduced from the initial $5.2bn to $3.9bn and MTN is to pay by December 31 2015. As the gsm network grapples with having to pay, its customers are nervous that the communications giant would cunningly extract the monies from frivolous charging schemes and it would be in place to urge the NCC to take steps that ensure adequate consumer protection. To be subscriber of a Nigerian gsm service subjects one to irritating harassment through unsolicited commercial advertising calls and text messaging. This liberty is often abused and should be curtailed in the public interest. Customers should be given option to block all advertising allowing only public service announcements.More importantly, all gsm networks in Nigeria must improve on their present generally deplorable quality of service. The Nigerian Communications Commission should see to it.