NCC fine: Now that MTN’s in court

While many Nigerians and non-Nigerians alike have been eagerly watching and waiting for the December 31, 2015 deadline the Nigeria Communications Commission (NCC) had given telecoms giant, MTN, to see if the company would eventually pay the fine imposed on it for allegedly delaying the disconnection of some 5.2 million unregistered subscribers on its network, it came as a surprise when news broke that the company had decided to take the regulator for the telecoms industry to court. 

The suit filed by MTN at the Federal High Court, Lagos, is challenging the N780 billion ($3.9 billion) sanction imposed on it by the NCC. Also sued alongside the Commission is the Attorney General of the Federation (AGF) and the Minister of Justice.

For those who have forgotten, the order to deactivate the lines followed a meeting of the NCC, the Office of the National Security Adviser (NSA), Department of State Service (DSS), and the network operators towards examining the threats posed by unregistered SIMs in the country. The NCC thereafter handed down a seven-day ultimatum from August 4 to MTN, Airtel, Etisalat and Glo to deactivate SIMs with invalidity status.

In October 2015 when the NCC eventually announced its fine on MTN, it accused the company of undermining efforts by the Nigerian government to tackle security challenges in the country and the war on terror and allied crimes.

According to explanations given back then by the NCC’s Director of Public Affairs, Tony Ojobo, he said the commission never expected that any of the operators would breach what was agreed because of the huge consequences involved. He added that the fine was a difficult decision for the NCC to take but the commission had to act the way it acted as a regulator because it must be seen to be setting the pace for others in the West African region.

Interestingly, the initial fine of N1.04 trillion ($5.2 billion), a figure which the NCC arrived at based on N200, 000 fine for every unregistered SIM, was reduced by 25 per cent by the Commission to N780 billion ($3.9 billion) after MTN wrote it a letter accepting that there was a breach and pleading for leniency even as the NCC reviewed the initial payment deadline from November 16 to December 31, 2015.

But through its team of lawyers which comprises Senior Advocates like Chief Wole Olanipekun, Tanimola Molajo, and Professor Fabian Ajogwu among others, the telecoms giant, through an originating summons, is challenging the powers of the NCC to impose such fine on it.

With this background information, I believe it is important to critically examine some of MTN’s defence to the charges the NCC has against it. The company says it explained to the commission the impossibility of meeting the one week deadline to deactivate the 5.2 million affected subscribers.

To buttress its position, MTN’s argument is that it needed to carefully sift through data of about 18.6 million records to identify affected subscribers so that those who had since regularised their records after the stringent efforts it made for them to do so before the NCC deadline were not inadvertently disconnected. It added that it couldn’t complete the manual inspection of all the data records involved within the stipulated time and neither could all the affected customers be engaged to re-register within one week.

Furthermore, it says it suggested to the NCC a staggered process that would minimise the social and economic disruption to the lives of Nigerians by starting with the immediate deactivation of active SIMs without biometric data, placing post-registration expiry dates on all new SIMs to be sold by the company, and carrying out massive publicity to sensitize Nigerians on the matter. MTN claims it received no response to its proposal from the NCC. Now, if this is true, and the NCC is yet to say anything to the contrary, why is it so?

Although MTN admitted that the NCC notified it of its intention to impose an unstated penalty and invited explanations from it as required by statute, it’s also complaining that the sanction was imposed on it just one day after it submitted its comments. The company thus believes there might be other motives to the whole case than the NCC is publicly saying.

Since MTN is now in court on the matter, it’s obvious the waiting game will have to continue as the legal fireworks commence and everyone looks forward to how the matter is resolved. But the reactions to the matter by the Nigerian public have been varied. And I’ll say, also interesting.

There are those who strongly support the imposed fine. They believe it serves MTN right. They accuse the company of exploiting its Nigerian subscribers with the high rate of calls when it commenced operations in the country in 2001. They believe this is pay-back time.

For such people, the NCC ought not to have even reduced the fine in the first instance, and that what really emboldened MTN to go to court was the reduction of the fine which they had vehemently argued against. They believe if the telecoms company shuts down its operations today and eventually leaves the country, it would send a very strong signal to foreign investors that our national laws and regulations cannot be toyed with. For Nigerian employees that would lose their jobs in MTN, they say other GSM operators in the country would in time absorb them. And this group seems to have very many members.

However, for those against the fine, they insist that slapping an initial penalty of over a trillion naira on MTN or any company at all will not only totally destroy it but also have other dire consequences on the company’s Nigerian employees, suppliers, banks and many other institutions it provides technical and infrastructural support to.  The damage that this could cause, they explain, would take several years to tackle.

Members of this group further argue that even if a fine would be imposed, it should be reasonable and not one that will kill the company unless there are political undertones that the general public is not aware of.

In all of these arguments and counter-arguments, I believe no individual or organisation is above the law. And the NCC, as a government regulator, cannot be said to be wrong to have imposed a fine on MTN.

But towards addressing this dicey matter that has been allowed to linger for too long by both regulator and operator, I strongly think sentiments should be put aside while reason must be allowed to prevail. I believe what should really concern those in favour of the fine, those against it, and every one of us as Nigerians, is what is best for our country in the long run.

On a personal note, I am alarmed at the sheer amount of the fine imposed. And this is what I want us all to consider even as we await the legal fireworks in court. I believe fines should be reasonable when juxtaposed with the ‘crime’ committed.

Again, with Nigeria’s SIM card registration process put in place to curb terror and criminal threats in the country, is it not important to ask what the NCC itself did with the N6.2 billion appropriation it got for the exercise? I feel the NCC hasn’t provided sufficient answers to this question so far. Nigerians need to know especially now that we have a government in power that promotes change!

Additionally, with the telecoms industry contributing no less than 10 per cent to Nigeria’s rebased economy, and MTN alone having about 48per cent of the market share, will this fine, which is unparalleled in the history of our country and indeed in the whole of Africa, not further complicate our fragile economy? I think it’s like cutting off one’s nose to spite one’s face. Or like throwing away the baby with the bathwater.

True, MTN might be a South African-owned company but it has demonstrated through its Nigerian operations that it could as well go for a Nigerian company because of its impact in the country. Of all the telecoms company operating in our country today, it towers above others in its corporate social impact. With the company paying no less than N1.3 trillion in taxies and levies to government since it commenced operations in Nigeria in 2001 and accounting for 11 per cent of non-oil tax revenue and 5 per cent of total taxes paid in the country in 2014 alone, MTN is a company valuable to our economy. This is a truth we must admit. And it is also good that the Minister of Communications, Adebayo Shittu, has said “no one wants MTN to die; nobody wants MTN to shut down.”

Even, the company itself has been trying to shake up its operations and internal systems following the NCC fine. Already, Mr. Sifiso Dabengwa, MTN’s immediate Group Chief Executive Officer had resigned his position and Phuthuma Nhleko appointed as acting Executive Chairman. This was followed by the resignation of the MD of the Nigerian arm of the business, Mr. Michael Ikpoki, and the head of regulatory and corporate affairs, Mr. Akinwale Goodluck.

While Nigeria cannot be held to ransom by one company, MTN’s death in Nigeria would have dire consequences with devastating impact that would be felt for years. This is a situation that can be prevented.

Yes, with dwindling oil prices, Nigeria certainly has economic and financial challenges which everyone can attest to. Already, governors are promising to sack workers, insisting they can no longer afford to pay the N18, 000 monthly minimum-wage although labour has been telling them it would have none of that. With fuel scarcity, limited supply of electricity, and little money to spend, many Nigerians would be celebrating this Christmas and New Year on a very low-key. And any government passionate about delivering its promises to its citizens would want to explore every opportunity available to it to pull in all funds that can be pulled in for development. But I think wisdom must be applied in how this is eventually resolved.

As at today, there are not many foreign investors who see the current APC government of President Muhammadu Buhari as being serious at fixing the country’s economy. The government can’t afford to allow this perception to continue. It would be injurious to our economic future.

There is no doubt that the fine threatens over 500,000 direct and indirect jobs connected to the telecoms company. And what of the millions of Nigerians earning their living from MTN’s value chain? What’s the government plan for them if at the end of the day, the company says it is better for it to folds up its operations in the country than pay the fine?

I love my country, and I am committed to working for Nigeria’s greatness. But at the risk of being called names, I think imposing a fine which is beyond the total assets and equity of a company or about the internally generated revenue of mega city like Lagos for five years or even almost a quarter of the country’s annual budget for an infraction is nothing but an extreme measure. With President Buhari travelling around the world trying to woo investors, it would certainly influence foreign investment and capital inflows into the country no matter how we want to look at it.

Certainly, many Nigerians, and non-Nigerians alike, would be following the legal fireworks between MTN and the NCC to see how the courts would adjudicate on the matter in the days ahead. Perhaps the matter would even be withdrawn and settled out of court later. Whichever way it goes, it’s certain this landmark fine for infringements in Nigeria’s telecoms industry will redefine the relationships between operators and the regulator. But the good thing about a case as this is that it would also help strengthen Nigeria’s regulatory framework when it is eventually determined. And that, for me, would surely be beneficial to our country in the long run.

Merry Christmas

To all my readers out there, I wish you a wonderful Merry Christmas celebration and a prosperous New Year 2016 in advance. Never doubt that I cherish and appreciate you always. God bless.

Kolawole, an award-winning journalist and biographer, is Publisher/CEO of POSTERITY MEDIA, a Nigerian publishing company based in Lagos. You can follow him on twitter:  @ofemigan