The risk of reprieve for MTN

THE deadline expired yesterday. But the telecoms regulatory authority,the Nigerian Communications Commission (NCC) has not said anything yet about the N1.04 trillion fine it imposed on telecom giant, MTN Nigeria before this column went to press. Neither has the regulator wielded the big stick for the seeming failure of MTN to meet the deadline given to it.

However, there are reports that top level discussions are taking place right now in Abuja between the top hierachy of MTN Group and officials of NCC on possible settlement of the matter that has generated so much dust within and outside Nigeria. While these negotiations are necessary, it is necessary to underscore the facts,and the truth. They must not be glossed over. T hese are matters of policy and regulation.

Last Friday, the Minister of Commu- nication, Adebayo Shittu was quoted by Reuters, a wire service news agency to have said as follows: ”A judgment has been given.. nobody wants MTN to die, nobody wants MTN to shut down”. The Minister added that if any new thing would happen,there must be initiative from concerned quarters. It is up to MTN”. So,the question is: what initiative is MTN making? It is not clear. But sources from NCC say things will become clearer perhaps today. It is important to state how MTN landed itself in this avoidable trouble. It all began few months ago, but matters got to a head last month when NCC imposed a hefty fine of $5.2 billion (equivalent of N1.04 trillion)on MTN for failing to deactivate 5.2 million unregistered Subscriber Identification Module cards, or SIM cards. The fine is perhaps the biggest penalty ever imposed on any GSM provider, and maybe on, any registered company in Nigeria. The $5.2 bn fine, it must be recalled, was arrived at by multiplying N200,000 for each of the 5.2 million SIM cards that MTN reportedly failed to disconnect as stipulated in the NCC Registration of Telephone Subscribers regulation, 2011. These provisions for penalty were published in the Federal Government of Nigeria Official Ga- zette No. 101 Vol,98. Every GSM pro- vider is conversant with what befalls the violator. Specifically, Section 20(1) of the regulation states that “any licens- ee 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 for each unregistered but activated subscription medium.”

Expectedly, the controversy so far generated by the fine has much to do with the quantum of the money. Many commenators have deliberately neglected the relevant laws that MTN flagrantly violated. Also, not many people are focusing on the security implication of what MTN Nigeria has done, especially at these torrid times that all civilized countries are battling terrorism. That is why I think any attempt at giving MTN reprieve will be fraught with far reaching unpleasant implications that will come to haunt NCC, sooner than later. Any pardon or downward review of the fine, against enforcing the administrative sanction will definitely set a dangerous precedent that could make future enforcement of regulation and imposition of sanction difficult. This is because defaulters will likely seek either a review or full par- don. Other networks are watching how things play out.

One of the interesting things in this matter is that MTN never denied it flouted the law. Which perhaps in- formed the resignation of its Group Chief Executive Officer, Mr. Sifiso Dabengwa and pressure was on the CEO of MTN Nigeria to throw in the towel as well. Within these few weeks, MTN shares reportedly lost over 20 percent of their value in the Johannesburg Stock Exchange, South Africa.

Making the point that NCC should enforce its regulation is not been unkind or sadistic. It simply boils down to whether the regulator wants to be taken seriously or be seen as an agency that can only bark, not bite. For too long, telecom operators have taken subscribers for a ride. This is one of the reasons why the World Bank “Doing Business Report” has for some years now rated Nigeria low on the scale of economies for “Ease of Doing Business” in the world. According to the Bank’s most recent report, there are only 20 countries in the World where it is harder to do business than Nigeria. That is not a compliment at all. Reason: companies operating in Nigeria see us as a nation where they can compromise the system and go scot-free, or at worst, receive a mere slap on the wrist.

NCC must show that, that perception has changed for good. For MTN, it has been like the hubris of “too-big-to fail”, that often leads to self-destruct, even when it is clear that though the telecom operator exists in 18 countries across Africa, But it makes over 30 percent of its total profit from the Nigerian market. Let us not forget that before NCC took the decision, it said it convened a couple of meetings with all the telecoms operators in the country during which it warned them to deactivate all unregistered lines in view of the security challenges facing the country. The regulator also said that in August this year, it gave the telecoms operators a week deadline to disconnect all improperly registered SIM cards.

MTN, according to NCC, was the only telecoms operator that failed to comply with the directive. Other net- works complied substantially. That’s what NCC told the Nigerian public. My position remains that focusing on the heavy fine will not help the matter. The real issue is the violation of the law. Failure to address the of- fence committed by MTN might lead to future violations perhaps with greater impunity.

Therefore, NCC must enforce its own rules. But, if it must consider any reprieve, one of the ways out of this im- passe is to spread the payment within an acceptable period of time, not beyond six months, believing that, in the end, MTN must have learnt hard lessons, anchored on the fact that no company is bigger than the country in which it carries out its business. It should however be stated that MTN has done some worthy causes in Nigeria as part of its Corporate Social Responsibility (CSR). But at the same time the company needs reminding that responsibility entails compliance and strict obedience to laid down laws that govern both individuals and organsations in any given society. Effective regulation is the key. And, Nigeria is not an exception.