South Africa’s MTN Group and the Nigerian Communications Commission (NCC), will today meet in court today as the suit filed by the mobile phone giant over hefty N1.04 trillion fines imposed on its Nigerian unit, MTN Nigeria, continues.
Justice Mohammed Idris of the Federal High Court in Lagos will hear the suit filed by MTN, which came under the regulator’s punitive sanctions for alleged breach of subscriber registration rules set by NCC.
The telecoms industry regulator imposed a N1.04 trillion fines on MTN Nigeria for flouting the regulator’s directive to deactivate 5.1 million pre-registered lines on its network, a world exclusive news published by Technology Times in October 2015.
The unprecedented fine that has become the highest in the history of the nation’s telecoms sector was to also lead to a major fall in the MTN Group’s shares listed at the Johannesburg Stock Exchange (JSE), immediately the news broke.
[blockquote right=”pull-right”]According to NCC, the fine that was imposed on MTN was the second within a short period of time when the four biggest mobile phone network operators were given a seven-day ultimatum to deactivate all unregistered and improperly-registered subscriber identification module(SIM) cards and ”while others complied MTN did not.” [/blockquote]
According to NCC, the fine that was imposed on MTN was the second within a short period of time when the four biggest mobile phone network operators were given a seven-day ultimatum to deactivate all unregistered and improperly-registered subscriber identification module(SIM) cards and ”while others complied MTN, did not.”
Four operators including MTN, Airtel, Globacom and Etisalat were sanctioned in August last year for non-compliance with the directive to deactivate the improperly registered SIM cards, NCC says.
In the wake of the regulator’s sanction, MTN was fined N102.2 million; Globacom, N7.4 million; Etisalat, N7 million and Airtel, N3.8 million.
Aftermath of NCC sanction
The sanction, which is the largest in Nigeria’s telecoms history, immediately affected the MTN group, as the company experienced a drastic decline in its stock, falling by over 12 per cent in the first one day.
The spiraling effect of the Nigerian sanction was to also affect the top management at the Group level in SOuth Africa, and the affected local operation in Nigeria.
Sifiso Dabengwa, the Group Chief Executive Officer of MTN Group at the time tendered his resignation following the massive fine imposed on the mobile phone company by Nigeria’s NCC.
Non-Executive Chairman, Phuthuma Nhleko, was subsequently appointed to act as executive chairman for a maximum period of six months while the company identifies a successor to Mr. Dabengwa.
“Due to the most unfortunate prevailing circumstances occurring at MTN Nigeria, I, in the interest of the company and its shareholders, have tendered my resignation with immediate effect,” Mr. Dabengwa was quoted as saying in a statement issued by MTN last year.
Nigeria Governors Forum wades in
Negotiations on the MTN fines was taken at the top levels of the Nigerian government because it is believed that the matter borders more on national security than on just telecoms rules infractions.
The Nigeria Governors’ Forum (NGF), an influential group of chief executives of states in Nigeria was to also intervene by taking the position that MTN Nigeria, the biggest mobile phone operator in the country, should pay the N1.4 trillion fine imposed by NCC.
MTN Nigeria CEO, Michael Ikpoki, more also resigned
Few weeks after the resignation of Mr Sifiso Dabengwa, the Group Chief Executive Officer of MTN Group, the telecoms giant, announced the resignation of its Nigerian CEO, Michael Ikpoki.
The Head of Regulatory and Corporate Affairs, Mr Akinwale Goodluck also followed the same path in the wake of what the chain of events that followed the fines.
MTN was to replace Ikpoki with Ferdi Moolman as MTN Nigeria CEO and Amina Oyagbola as its head of Regulatory and Corporate Affairs.
Minster of Communication says ‘Buhari to decided’
Barrister Adebayo Shittu, the new Minister of Communications was to later tell Technology Times in an exclusive interview in Lagos that the final decision on the N1.4 trillion fine imposed on MTN Nigeria will be taken by President Muhammadu Buhari at the appropriate time “in public interest.”
“The issue is now before Mr President. He will take the necessary decision at the appropriate time. I think Nigerians will expect that Mr President would do the best to ensure that the public interest is guaranteed”, the Minister told Technology Times.
[blockquote right=”pull-right” cite=”Barrister Adebayo Shittu, Minister of Communication in exclusive interview with Technology Times”]“The good thing is that MTN did not contest the fact that they had violated the regulations and guidelines. They never contested it. They admitted they were at fault. They apologized for their role in the saga and they made a commitment that what happened will never happen again. And of course, they made a plea for review of the payment terms.” [/blockquote]
According to the Minister, “the good thing is that MTN did not contest the fact that they had violated the regulations and guidelines. They never contested it. They admitted they were at fault. They apologized for their role in the saga and they made a commitment that what happened will never happen again. And of course, they made a plea for review of the payment terms.”
The Minister explains further that, “the issue is now before Mr President. He will take the necessary decision at the appropriate time. I think Nigerians will expect that Mr President would do the best to ensure that the public interest is guaranteed.”
NCC reduces fines, not without mix-up
MTN Group was later to announce in Johannesburg, South Africa that NCC had reduced the original fine of N1.04 trillion to N674 billion, representing 35% cut by the Nigerian telecoms regulator.
Few hours later, MTN Group said it has received a second letter from NCC indicating that the mobile phone company will only get a 25% reduction, rather than 35% earlier communicated by the regulator.
Further investigation by Technology Times on the matter was to see the telecoms regulator admitting that a “computation error” occurred in the earlier review of the N1.04 trillion fine , which is now fixed at N780 billion, representing 25 per cent reduction.
MTN heads for court
But South Africa’s MTN Group was to pull a surprise when it launched a legal challenge against the fines imposed against the mobile phone giant’s Nigerian unit, MTN Nigeria.
South Africa’s MTN Group says it has instructed its lawyers to challenge the fines at the Federal High Court in Lagos, on account of the mobile phone company’s review of the circumstances surrounding the regulatory sanction.
MTN Group announced in Johannesburg, South Africa, that it opted for the court action based on legal advice on the controversial matter.
“MTN Nigeria acting on legal advice has resolved that the manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act and therefore there are valid grounds upon which to challenge the fine”, the mobile phone company said in a statement to shareholders.
“Accordingly MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs”, the mobile phone company said.