The share price of MTN Group, owners of telecommunications company, MTN Nigeria fell by 12 per cent yesterday on the Johannesburg Stock Exchange (JSE), as news went out that the Nigerian Communications Commission (NCC) fined the company a whooping N1.04 trillion ($5.2bn) for not deactivating 5.2 million incomplete subscriber identification module (SIM) cards on its network.
MTN Nigeria, the largest subscriber base in the country, which is owned by South Africa’s MTN Group, is in trouble for with the regulatory agency for 28 accumulated breaches.
the firm has been accused of allegedly undermining efforts by the Nigerian government to tackle security challenges and the war on terror as well as allied crimes, following its alleged refusal to comply with the directive to deactivate unregistered mobile phone lines on its network.
MTN has confirmed that the mobile phone company has received a letter from the regulator confirming the fine.
The NCC is also reported to have suspended all regulatory services to MTN Nigeria until its pays the fine.
According to an NCC document which catalogued MTN’s numerous infractions, the regulator decided to wield the big stick to beat MTN into line.
“In the NCC quarterly compliance enforcement report for Q2 2015, out of the six sanctions imposed on operators for various acts on non-compliance, MTN was involved and sanctioned for four separate infractions,” the NCC document stated.
“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.”
It continued, that “MTN’s dominant position in the mobile telecommunications market is so strong that the other telecommunications operators in combination cannot provide sufficient capacity to cover for MTN’s traffic if for security or other reasons the government needed to impose ultimate sanctions. This situation may further embolden MTN to not comply with the law in a timely fashion,” the regulator said.
“The fine of N1,040 billion is in line with Section 19 of the SIM Registration Regulations specifying N200,000 per unregistered SIM and the penalty has been applied for the 5.2million MTN SIM card registration records found to be non-compliant by the NCC.
“This unprecedented fine is indicative of the magnitude of the transgression and the seriousness with which the NCC and the authorities are approaching this issue. It is also more likely to ensure that the willful non-compliance by MTN ceases,” NCC stated in the document.
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MTN’s infractions, according to NCC, shows that the operator failed to comply with the directive of the NCC and security agencies to deactivate improperly registered subscribers within the seven-day deadline ending on August 11, 2015. Following repeated warnings and compliance enforcement visits as detailed above, MTN only made a partial attempt to bar unregistered subscribers in selected areas over a few days in September 2015.
“Other operators had fully complied and reconciled their deactivations with the invalid registrations shared by the NCC up to four weeks earlier. The consequence of MTN’s refusal to comply with the directive is even more pronounced as about a half of all the invalid registrations shared by the NCC belonged to MTN.
“These SIM cards with invalid registrations pose a grave security risk to the country as their registration information cannot be used to successfully identify their owners in the event of a security issue involving any of these SIM cards. The recent kidnapping of the former finance minister, Chief Olu Falae, is one example of this risk: the kidnappers used MTN SIM cards and MTN was unable to provide any registration data for those SIMs,” NCC explained.
NCC stated that “MTN’s non-compliance with the deactivation directive is unfortunately not an isolated incident. It needs to be seen in the context of a general pattern of non-compliance, with regulatory directives that actually predates the current SIM registration infractions.”
MTN Group has started to face the brunt of the fine of N1.04 trillion ($5.2bn) imposed on MTN Nigeria as its share price fell by 12 per cent on the JSE yesterday.
The operator has, however, begun lobbying the NCC to resolve the landmark infringement.
MTN shares declined as much as 12 percent, the most since December 2008, and traded 9.4 percent lower at 172.94 rand as of 2:36 pm in Johannesburg. That values the company at 320 billion rand ($24 billion).
A statement from MTN’s Fairland headquarters, South Africa, to the JSE shareholders reads: “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.”
Also, MTN Nigeria corporate services executive, Mr. Akinwale Goodluck, said: “MTN has confirmed that the 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 and 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.”
NCC director of public affairs, Mr. Tony Ojobo, when contacted said: “Of course, I can confirm to you that there was a fine of $5 billion (equivalent to N1.04 trillion) imposed on MTN for non-deactivation of over 5.1 million unregistered SIM cards. We are going to release a statement.”
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