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MTN in talks with NCC over N1.04tr fine on telecoms firm

By Adeyemi Adepetun
27 October 2015   |   2:23 am
INDICATIONS emerged yesterday on why the Nigerian Communications Commission (NCC) slammed a N1.04 trillion ($5.2 billion) fine on MTN Nigeria.
Executive Vice Chairman, NCC, Umar Danbatta

Executive Vice Chairman, NCC,<br />Umar Danbatta

MTN MD, Michael Ikpoki

MTN MD, Michael Ikpoki

INDICATIONS emerged yesterday on why the Nigerian Communications Commission (NCC) slammed a N1.04 trillion ($5.2 billion) fine on MTN Nigeria.

According to information at the disposal of The Guardian, yesterday, the failure of MTN Nigeria, which controls 43 per cent of the country’s telecommunications market to fully deactivate subscribers with unregistered and incomplete Subscriber Identification Modules (SIM) cards details within the stipulated time, brought the fine on the telecommunications. MTN had last week cut its group’s subscriber target on sliding Nigeria customer numbers by over 11 per cent.

Though, as at press time, no official statement has come from the NCC, however, a source at the NCC, who spoke on the condition of anonymity, disclosed that it was not only MTN that was found culpable, “but MTN remains the biggest culprit. The telecommunications firm was found having a database allegedly been use by kidnappers, insurgents; miscreants, armed robbers and other criminals to commit crimes in the country. NCC’s decision was taken based on security advice from the State Security Service (SSS).”

Besides, the NCC official recalled that at the August 4 meeting held at NCC office, where all the operators were invited and which had NCC top officials in attendance; members of the SSS and officials from the office of the National Security Adviser, “Can you imagine that MTN sent low rank officers to attend such a meeting. That singular act further undermined the importance of such a meeting.

“That meeting was at the instance of the office of the National Security Adviser and Director of State Service. This has become worrisome to the government in an attempt to curtail the activities of the insurgents.

“Also, when NCC Enforcement and Monitoring team went to MTN’s office for more checks, their officials decline to open their switches for inspection.”

According to the source, all these acts infuriated the NCC team, which in their report indicted the telecommunications firm of not willing to cooperate in the deactivation of improperly and pre-registered SIM cards within the stipulated time, “so there was no option but to slam them with the fine.”

The Guardian further gathered that despite the above detailed entreaties and warnings over a 12 month period (from September 2014), on the importance of ensuring that only SIM cards with valid SIM registration details are active on telecommunications networks, MTN failed to comply with the directive to deactivate improperly registered subscribers.

Accordingly, the NCC and security agencies informed the public during a press conference held on August 18, that, as at the expiration of the seven-day deactivation deadline ending on August 11, MTN had failed to fully deactivate any subscriber.

Information also had it that in September 2015, following repeated warnings and compliance enforcement MTN only made a partial attempt to bar unregistered subscribers in selected areas over a few days in in the month, while other operators had fully complied and reconciled their deactivations with the invalid registrations shared by the NCC up to four weeks earlier.

Another industry source, who preferred anonymity, said as it stands today, MTN’s persistent violations have forced the NCC to impose the unprecedented sanction of suspending all regulatory services to MTN, following its accumulation of over 28 separate and proven infractions.

Meanwhile, reacting to the fine, MTN Nigeria’s Corporate Service Executive, Akinwale Goodluck, said MTN is engaging NCC on the registration sanctions.

“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 MTNN 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.”

The Group also issued a statement from South Africa; MTN Nigeria is currently in discussions with the NCC to resolve the matter in recognition of the circumstances that prevailed with regard to the subscribers.

The statement reads: “The Nigerian Communications Commission (NCC) imposes fine on MTN Nigeria: Shareholders are advised that the NCC has imposed a fine equivalent to $5.2 billion on MTN Nigeria. This fine relates to the timing of the disconnection of 5.1 million MTN Nigeria subscribers who were disconnected in August and September 2015 and is based on a fine of N200, 000 for each unregistered subscriber.

“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 NCC had earlier on September 1, asked to pay N120.4m in fines for failing to fully comply with the directive of the commission to deactivate pre-registered and defective SIM cards.

While MTN, which has over 64 million subscribers on its network, was asked to pay N102.2 million; Globacom was slammed with N7.4 million; Etisalat, N7 million; and Airtel, N3.8 million.

Speaking to The Guardian, the Chairman of the Association of Licensed telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, said MTN, as at press time yesterday, was yet to brief the association about the development.

However, Adebayo, an engineer, said such a sanction can destroy the business. “I don’t know how NCC arrived at the huge amount as a fine. But I think government should urgently intervene because it could affect further investments in the sector. It is disincentive to investors and would have negative impact on the sector as a whole.”

According to him, the operator and regulator should meet and look at other possible way of resolving the issue.

The President of the Association of Telecoms Companies of Nigeria (ATCON), Lanre Ajayi, condemned the ‘outrageous’ sanction, saying it is unacceptable in a telecommunications s industry, which is still gasping for foreign investment to achieve pervasive telecoms services.

He said: “Yes, 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 (ATCON) has not met to look at the issue critically and implications of 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 more than 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 cautions.”

It will be recalled that in August, the quartet of MTN, Airtel, Glo and Etisalat, deactivated all lines with unregistered or improperly registered mobile subscriber data on their networks. About 10.7 million lines were disconnected. This later brought a deluge of crowds at the various services centres of the operators around the country, who tried to reconnect their lines.

Head of enforcement and monitory department of NCC, Idehen Efosa, at a press conference in Lagos, disclosed that in September 2014, NCC discovered that from the SIM data the operators sent to the commission for hamonisation, some of them were defective and had to be returned to the operators for proper checks.

According to him, about 18.6 million SIM data were sent back to MTN Nigeria; 7.49 million to Airtel; 2.23 million to Globacom and 10.46 million to Etisalat.

Idehen, however, said the monitoring exercise done recently by the NCC showed that operators are partially committed to the exercise.

According to him, out of the about 18.6 million SIM registration data found to be defective on MTN network, only about 1.6 million have been barred. He explained that what MTN actually did was to put the affected subscribers on “Receive Calls Only,” which means the subscribers cannot put a call through to another network.

“With this there was no compliance from MTN. During our visit to Airtel, the telecommunications service had fully barred 2.3 million from it network. These were SIM data found to be incomplete. At Globacom, 3.5 million lines have been barred also from its network.

“Globacom gave assurance of 24 hours to deactivate other lines found to be defective on their networks. Etisalat has barred 3.3 million and promised that within 24 hours, others found to be challenging will be removed totally from the networks,” he stated.

The NCC enforcement chief said the directive given to the operators was that they should bar any line found to have incomplete registration and later urged the affected subscribers to complete their registration.

Idehen said the commission, after due consultation with the National Security Adviser (NSA) and other stakeholders in the industry agreed that pre-registered SIMs and others found to be defective should be deactivated.

He stressed that henceforth operators will be required to send correct data for hamonisation to the regulator.

Idehen, who ruled out sabotage on the part of the operators, disclosed that there will be sanctions as stipulated by SIM Card Registration Code, Section 19 to 21, where it was stated that per SIM found defective on the network, erring operator will be made to pay N200, 000, which was set out on May 1, 2010.