MTN fined N1.4tr over unregistered users
The Nigerian Communications Commission (NCC) has fined MTN $5.2bn (N1.4 trillion) for failing to disconnect millions of its unregistered subscribers at the end of the August deadline set by the regulatory body.
The penalty, according to the NCC, represents N200,000 ($1,000) for each of the unregistered 5.1 million SIM cards.
From 2012 when the SIM registration started, SIM card buyers had to register the card under their name by law.
But the telecoms regulator found out in August that the telecoms operators did not carry out the exercise properly on 38.78million subscribers, and they were directed to reregister the subscribers within one month or be sanctioned.
NCC’s Head of Compliance and Monitoring Unit, Efosa Idehene said the commission had cited poor finger prints, no facial information and other biometric challenges for the incompleteness of the subscribers’ registration.
A source in NCC said MTN was fined after it failed to carry out the commission’s directive despite repeated warnings.
Daily Trust reports that the
fine is unprecedented in the history of telecom infringements in Nigeria.
‘We are in talks with NCC’
But MTN in a statement yesterday said it was discussing with the NCC over the fine and hoped to resolve the matter soon.
MTN’s Corporate Services Executive, Akinwale Goodluck said: “Leading ICT company in Nigeria, MTN confirmed that the Nigerian Communications Commission (NCC) has imposed a N1.4 trillion fine ($5.2bn) on MTN Nigeria. This fine relates to the timing of the disconnection of the 5.1 million MTN subscribers that were disconnected in August & September 2015 and is based on a N200,000 fine for each improperly registered subscriber. MTN Nigeria is currently engaging with the NCC to resolve the matter.”
It said $5.2 billion is equivalent to at least two average years’ profit for MTN Nigeria and nearly three times the $1.8 billion it invested in Nigeria, according to the company’s website.
As a result of the news of the fine, shares in South Africa’s MTN dropped more than 5 percent yesterday.
“The report is definitely the reason why it is moving. We just don’t know how credible it is,” said Petri Redelinghuys, a trader at Inkhunzi Investments in Johannesburg.
A second trader confirmed the share was falling as a result of the report, Reuters reported.
Stakeholders, subscribers speak
Reacting to the sanction, the president of Association of Licensed Telecommunications Operators of Nigeria (ALTON) Mr Gbenga Adebayo said: “We need to handle this issue of sanction very carefully as it may send wrong signals to would-be investors both in our sector and in other sectors of the economy.”
Also, Chief Deolu Ogunbanjo, the President, National Association of Telecoms Subscribers said NCC’s fine against MTN is double jeopardy.
This, he said, is because MTN alone could not be blamed for the woes in the SIM registration exercise.
According to him, the agent hired by the NCC to carry out the exercise also failed to do due diligence to SIM registration activities.
He noted that the personnel employed by those agents lacked the technical skills to carry out the exercise apart from meeting with the daily targets of 50-70 daily registration.
Ogunbanjo said NCC had not come to terms with its failure in the SIM registration scheme. He said the commission employed an agent for each geo political zone and one for Lagos considering the state population, adding that
He suggested that instead of the regulator fining the service providers, the operators should be compelled to give N2000 worth recharge cards to each subscriber for the rigors they went through in the SIM registration exercise.
This he described as a way of appreciating the subscribers particularly those who went and are still going thorough reregistration.
Why only MTN got the stick
A senior NCC official told Daily Trust yesterday that the commission was firm on implementing this latest sanction on MTN.
He said the commission had returned 18.6 million SIM cards data to MTN; 7.4 million to Airtel; 2.2 million to Globacom and 10.4 million to Etisalat for corrections and all of them except MTN had made the corrections.
According to the source, the NCC early this month summoned MTN and three other operators to its Abuja head office where they were requested to explain why they failed “to disconnect improperly registered subscribers on their networks.
“Consequently, the commission ordered all the operators to go and disconnect the subscribers and all other operators did just that except the MTN hence the sanction,” the source said.
NCC had earlier in September fined MTN, Glo, Airtel and Etisalat N120m for failing to disconnect subscribers with incomplete registration but it is not clear whether they have paid the fine or not.
On Thursday, President and Chief Executive Officer of MTN Group Sifiso Dabengwa said the company lost over 5 million subscribers as a result of stiff competition and tougher regulation in the Nigerian market.
“Aggressive price competition, weakening macroeconomic conditions in most of our markets and unfavourable exchange rate movements continued to impact financial performance for the quarter,” Dabengwa said.