Following the imposition of $5.2 billion (about N1.04 trillion) fine on MTN Nigeria by the Nigerian Communication Commission (NCC) for the operator’s failure to disconnect customers with unregistered Subscriber Identity Module (SIM) cards on its network, the telecoms firm’s management has initiated moves to negotiate with the Commission for a reduction in the fine.
NCC imposed the fine, which has been described by some stakeholders as unprecedented in the history telecoms regulation in Nigeria, over MTN’s delay in disconnecting 5.1 million subscribers who were supposed to have been disconnected in August.
It was gathered that NCC gave MTN a new September deadline to disconnect the unregistered subscribers, but the company, again, failed to meet the deadline.
The company was fined N200,000 ($1,008) for each unregistered subscriber.
Some MTN officials yesterday on the sanction expressed shock. They described the fine as exorbitant, adding that the company will negotiate with NCC for a reduction.
According to them, the sanction is “uncalled-for, unprecedented and irrational use of regulatory instrument by the regulator.”
It was gathered that the sanction represents almost half of the total investment of MTN in Nigeria.
MTN has invested over $13 billion (about N2 trillion) in the last 14 years of its operations in Nigeria, according to a report from the company.
The company, whose investment has been channelled majorly into fixed assets and facilities nationwide, currently has over 64.1 million active subscribers on its network with a total market share of 43.5 per cent, according to NCC data.
MTN said that its robust network investment, coverage, expansion and state-of-the-art infrastructure was evident in its huge investment in the Nigerian economy.
NCC’s Public Affairs Director, Mr. Tony Ojobo, while confirming the imposition of the fine on MTN, said: “Of course, I can confirm to you that there was a fine of $5 billion, equivalent to N1.04 trillion, imposed on MTN for non-deactivation of over 5.1 million unregistered SIM card.”
He, however, said that the commission would release “an official statement on the sanction today (yesterday).”
However, the company, in a statement notifying stakeholders of the development, said it was working with the NCC “to resolve the issues.”
“Shareholders are advised that the NCC has imposed a fine equivalent to $5.2 billion on MTN Nigeria. MTN Nigeria is currently in discussions with the NCC to resolve the matter in recognition of the circumstances that prevailed with regard to these subscribers. We will continue to update shareholders in this regard,” the statement said.
“We are in discussions with them,” the executive said, adding the MTN is already talking to NCC to resolve the matter.
MTN also witnessed shares plunge yesterday after the imposition of the $5.2 billion fine by Nigerian regulator.
Its share declined by as much as 12 per cent, the most since December 2008, and traded 9.4 per cent lower at 172.94 rand in Johannesburg.
The sanction on MTN is, arguably, one of the highest in the history of Nigeria’s telecommunications sector, after allegedly violating a SIM registration order from government.
NCC is believed to have discovered that MTN still had active pre-registered SIM cards on its network and this resulted in a hefty penalty for failing to deactivate lines with incomplete registration details.
In August, over 37 million SIM cards on telecoms networks were asked to be re-registered by regulator. The directive by NCC followed its discovery, in December 2014, that about 45 per cent of registered SIM cards on mobile networks were invalid because of improper registrations. As such, 18.6 million numbers were sent to MTN for revalidation; 7.4 million to Airtel, 2.33 million to Glo and 9.46 million to Etisalat.
According to NCC, by having lines with incomplete registration details active on the network, the purpose of the SIM registration exercise could not be satisfactory achieved, which is to arm security operatives with biometric details of mobile telecoms subscribers for national security purposes.
“They have disobeyed several directives issued them,” said a source at NCC.
An executive at MTN also confirmed receipt of NCC’s correspondence containing the fine.
Just last month, the regulator slapped the country’s four major telecoms companies – MTN, Airtel, Globacom and Etisalat – with fines for having active preregistered lines on their networks.
The four companies were instructed to pay N120.4 million as penalty for non-compliance with the NCC directive.
According to the commission, the telecommunication companies frustrated the practice of using biometrics for SIM card verification.
Reacting to the fine imposed on MTN, the President, Association of Telecoms Companies of Nigeria, Mr. Lanre Ajayi, condemned the ‘outrageous’ sanction.
He said that the sanction was unacceptable in a telecoms industry, which is still gasping for foreign investment to achieve pervasive telecoms services.
“I have heard about this development and I don’t know where to place it, although, the board of the Association Telecoms Companies of Nigeria (NATCON) has not met to look at the issue critically and determine what its implications are on the industry.
“However, in my view, I believe strongly that there is nothing wrong in a regulator imposing a sanction on erring operator to ensure sanity in the market, but when such a regulatory tool is being abused, it calls for alarm.
“The amount imposed on MTN is just, to say the least, outrageous and monumental. By the time you begin to impose a sanction, whose value is worth over half of the investment of a telecoms company, I am afraid, this does not send good signals to foreign investors and we need to take caution.”
