MTN careless about regulations, says NCC

Nigeria’s telecommunications regulator says it is extending its Monday deadline for MTN Nigeria to pay a $5.2 billion fine but indicated it will not lower the amount for a company it accuses of routinely flouting regulations.

It comes as other Nigerian regulators are slapping companies with multimillion-dollar fines, as the government looks for more revenue while pursuing President Muhammadu Buhari’s anti-corruption drive.

Spokesman Tony Ojobo of the Nigerian Communications Commission said the fine was the second imposed on MTN in two months over the same infraction: A failure to deactivate unregistered cellphone SIM cards. The issue is one of national security in Nigeria, where law enforcers say cellphones are used to activate bombs and coordinate other attacks by Boko Haram Islamic extremists as well as in kidnappings and armed robberies.

When all four Nigerian cellphone service providers missed an Aug. 11 deadline, they were fined amounts from $19,000, for Airtel, to $511,000 for MTN, Ojobo said in a statement. Only MTN failed to pay, he said.

When an enforcement team audited MTN from Sept. 2-4, the company admitted it still had 5.2 million unregistered SIM cards active on its network, the statement said. Other companies had complied.

“They (MTN) have always been flouting regulations,” Ojobo told The Associated Press.

His statement said: “The fine remains but the appeal and other engagements with MTN may affect the payment deadline.”

Institutional investors have complained the fine is punitive and warned it could deter investment in Nigeria, but the regulator’s statement said “sanctions are the last resort after all overtures fail but this does not in any way undermine industry standards and the interest of investors.”

Shares of South Africa-based MTN Group, Africa’s biggest telecommunications company, have slumped. CEO Sifiso Dabengwa resigned last week.

Despite the furor, the regulator this month extended MTN Nigeria’s operating license until 2021 for $94.2 million. Nigeria is the group’s most lucrative subsidiary.

The $5.2 billion equals nearly a quarter Nigeria’s 2015 national budget.

Other fines meted out recently include:

— $15 million for United Bank for Africa or failing to transfer government deposits to a single treasury account by Sept. 15.

— $5 million to Stanbic IBCT Holdings, a subsidiary of Standard Bank of South Africa, which is contesting in court allegations that it filed misleading financial statements.

— $5 million to Guinness Nigeria for allegedly re-validating expired products and exposing raw materials to rats. The brewer denies wrongdoing.



Timeline: How MTN shoddy business practice got it in trouble with NCC

  • Section 20 (1) of Registration of Telephone Subscribers Regulations 2011 states that: “Any licensee who activates or fails to deactivate a subscription medium in violation of any provision of these Regulations is liable to a penalty of N200,000.00 for each unregistered but activated subscription medium.”
  • MTN, in a letter of November 2, 2015 admitted the infraction and pleaded for leniency.
  • The fine that was imposed on MTN was the second within two months after the operators were given a seven-day ultimatum to deactivate all unregistered and improperly registered Subscriber Identification Module (SIM) Cards. While others complied, MTN did not.
  • On August 4, 2015, at a meeting of all the representatives of the Mobile Network Operators (MNO), with NCC, major security challenges through preregistered, unregistered and improperly registered SIM Cards topped the agenda after which Operators were given the ultimatum to deactivate such within seven days.
  • On August 14, 2015, three days after the ultimatum expired, NCC carried out a network audit, while other Operators complied with the directive, to deactivate the improperly registered SIM Cards, MTN showed no sign of compliance at all.
  • Four operators; MTN, Airtel, Globacom and Etisalat, were sanctioned in August for none compliance of the directive to deactivate the improperly registered SIM Cards.  MTN got a fine of N102.2Million, Globacom N7.4Million, Etisalat N7Million and Airtel N3.8Million fine.  Others complied while MTN flouted the fine.
  • Based on the report of the compliance Audit Team, an Enforcement Team which visited MTN from September 2 – 4, 2015 wherein MTN admitted that the Team confirmed that 5.2million improperly registered SIM Cards were still left active on their network; hence, a contravention of the Regulations was established.
  • Consistent with the Commission’s enforcement process, MTN was by a letter dated October 5, 2015, given notice to state why it should not be sanctioned in line with the Regulations for failure to deactivate improperly registered SIM Cards that were found to be active at the time of enforcement team’s visit of September 15, 2015.
  • On October 19, 2015, the Commission received and reviewed MTN’s response and found no convincing evidence why it should not be sanctioned for the established violations.
  • Accordingly, by a letter dated October 20, 2015 the Commission conveyed appropriate sanctions to MTN in accordance with Regulations 20(1) of the Telephone Subscribers Registration Regulation 2011, to pay the Sum of N200,000.00 only for each of the 5.2million improperly registered SIM Cards.

Source: Nigerian Communications Commission, Abuja

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