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Tuesday, 10 April 2018

MTN HAS PAID ₦165BN OUT OF ₦330BN FINE

Phuthuma Nhleko Group Chairman, MTN

The Nigerian Communications Commission (NCC) yesterday disclosed that MTN Nigeria Limited has paid ₦165bn out of ₦330bn fine leveled against it by the regulatory agency.
The Commission’s Executive Vice Chairman, Professor Umar Danbatta, said this in Abuja while hosting some top management executives of the telco (including Mr. Phuthuma Nhleko, the Chairman of MTN Group) who paid him a courtesy visit at the end of a strategic board meeting.
Professor Danbatta also used the occasion to disclose that the National Frequency Management Council has decided to retain the controversial ₦30bn 700MHz spectrum MTN Nigeria Limited acquired from the National Broadcasting Commission in 2015. He, however, stressed that the telco must only use said frequency for the sole purpose for which it was acquired; for telecommunications services instead of broadcast services.

Background to the fine

In 2015, MTN Nigeria Limited was fined ₦ 1.04 trillion by Nigeria’s NCC following the uncovering of evidence that the leading telecoms operator in Nigeria had abused some operational guidelines; including irregular registration of subscribers. Consequently, after many months of negotiations between the company, the NCC and the Federal Government, said fine was eventually reduced to  ₦330bn.
Also as part of the re-negotiations, payment of the fine was spread out over a three-year period. From all indications, the telco had kept to schedules with the total payment of ₦165bn so far. For this, Professor Danbatta commended them, saying that he is “delighted that you chose to have this strategic meeting in Nigeria. We always try to find pragmatic ways to engage with all operators, including the MTN.”
PART OF THE FINE WAS PAID IN MARCH. NOT MORE THAN TWO WEEKS AGO, WE RECEIVED A CHEQUE FOR ₦55BN. SO FAR, MTN HAS PAID MORE THAN 50 PER CENT OF THE FINE. THAT WOULD TRANSLATE TO ₦165BN. THE PAYMENT THEY ARE MAKING IS CONSISTENT WITH THE TERMS OF AGREEMENT WE REACHED WITH THEM.
THERE WAS AN AMICABLE SETTLEMENT AND AGREEMENT LEADING TO THE WAY THE FINE IS BEING PAID. SO FAR, THEY HAVE NOT RENEGED. THIS INFORMATION SHOULD GO OUT.
THE WHOLE IDEA OF THAT EXERCISE WAS NOT TO BRING MTN TO ITS KNEES. WE JUST WANTED TO ENSURE THAT IT IS NOT BUSINESS AS USUAL. MORE THAN THE FINE, WE WANTED TO ENSURE THAT THE RULES OF ENGAGEMENT ARE RESPECTED. THAT IS ALL. -PROFESSOR UMAR DANBATTA
MTN Nigeria Limited was incorporated in 2001 and has more than 20 million subscribers, thereby making it Nigeria’s most dominant mobile operator. Unfortunately for it, the 2015 controversy affected its operations, leading to it losing important market value to its topmost competitor, Globacom Nigeria. But the company has since rebounded. According to National Bureau of Statistics, the company recorded a leading market share of 36.04 by the fourth quarter 2017.
Recall that the MTN Group recovered from the 1.4 billion rand loss recorded in 2016 to an improved 3.3 billion rand in 2017, as shown in its FY report which we published.
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