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  • MTN, lawyer urge court to quash NCC’s fine  

    MTN, lawyer urge court to quash NCC’s fine  

    MTN Nigeria has urged the Federal High Court, Lagos to quash the $3.9 billion sanction imposed on it by the Nigerian Communications Commission (NCC).

    The action came as a lawyer, Abubakar Sani, in a separate suit, also asked a Federal High Court, Abuja to declare the fine unlawful.

    NCC had in October sanctioned the company for allegedly failing to disconnect unregistered subscribers.

    The initial fine of $5.2 billion was reduced by 25 per cent to $3.9 billion earlier this month, with a December 31 payment deadline.

    But MTN, through its lawyers led by a former Nigerian Bar Association (NBA) President Chief Wole Olanipekun (SAN), is challenging NCC’s powers to impose the fine.

    It argued that NCC, being a regulator, could not assume all the functions of the state.

    MTN said the commission could not make the regulation, prescribe the penalty and impose the fine payable to it and not to the Federal Government.

    The firm alleged that it was not afforded its constitutional right to fair hearing before a court of competent jurisdiction.

    Besides, MTN said it had not been found guilty of any offence that would warrant it to pay such a fine.

    It contended that the sanction imposed on it by NCC was within 24 hours of its written submission on the disconnection exercise and the impractical nature of the NCC deadline.

    According to MTN, the deadline of seven days to disconnect 5.2 million subscribers was grossly inadequate and impracticable.

    The telecoms company said the deadline was unfair and ran contrary to the requirement to give adequate notice to the subscribers to update their records.

    It accused the regulatory agency of acting as a legislator, executor, accuser, prosecutor, judge and beneficiary of the penalty.

    MTN said NCC’s N200,000 per SIM sanction was excessive, being the highest fine ever imposed on a telecommunications company in the world.

    The company wondered if the fine is truly commensurate with the purported breach and if it would not frustrate its business in Nigeria.

    Attorney-General of the Federation (AGF) Abubakar Malami (SAN) is also a defendant in the action.

    MTN urged the court to determine whether having regard to Sections 1 (3), 4 and 6 of the 1999 Constitution (as amended), the regulatory agency can validly enforce Section 70 of the NCC Act in a manner that encroaches on the exclusive legislative powers of the National Assembly, as well as the judicial powers of the courts established under the Constitution.

    It said having regard to the express tenor of sections 1 (2), 4 and 6 of the Constitution when read together with Section 70 of the NCC Act, whether the commission’s promulgation of regulations 11, 19 and 20 of its Act (Registration of Telephone Subscribers) Regulations 2011 is not ultra vires its subsidiary rule-making powers.

    It also wants the court to determine whether the regulations did not amount to an encroachment on the National Assembly’s legislative powers, as well as the courts’ judicial powers.

    Sani, in his suit, among others, argued that it was illegal for NCC to impose a fine of N200,000 per contravention on any of the four mobile telecommunication companies operating in the country for any breach of its regulations.

    The suit has as defendants NCC, MTN, Emerging Markets Telecommunications Services Limited (Etisalat Nigeria Limited), Globacom Limited and Airtel Networks Limited.

    He urged the court to order NCC to give account of and refund the money it had collected from the four telecommunication companies as fines/penalties in excess of the N100 per contravention for any alleged contravention of the NCC (Regulation of Telephone Subscribers) Regulations 2011.

    Sani, in a supporting affidavit, stated that the NCC had on two occasions imposed fines on the four mobile telecommunication companies for contravening some provisions of the Regulations 2011, under which it imposes N200,000 per contravention.

    He gave an instance in April 2013 when the telecommunication companies were made to pay a cumulative fine of N53.8 million (MTN, N29.2 million; Etisalat, N5 million; Globacom, N11 million and Airtel, N8.6 million).

    He also cited the N1.04 trillion fine NCC imposed on MTN for allegedly refusing to deactivate 5.2 million unregistered/irregularly registered subscribers.

    Relying on Section 12(1)(c)(ii) of the Interpretation Act, Sani argued that the NCC Regulations 2011, being a subsidiary legislation, enacted by the NCC pursuant to Section 70(1) of the Nigerian Communications Act 2003, cannot empower NCC to impose fines in excess of N100.

  • MTN bridges divide between enterprises, informal merchants

    MTN bridges divide between enterprises, informal merchants

    Multinational Corporations, particularly in the Fast Moving Consumer Goods (FMCG) sector, as well as informal merchants, will soon benefit from reduced costs, increased security and greater efficiencies around payments. This follows a partnership agreement between MTN Business and Switching House, on a cashless payment solution that bridges the divide between large enterprises and the cash-based informal merchants.

    “This solution is aligned with MTN’s efforts to deliver digital services to our multinational clientele, while at the same time serving the underserved. We estimate that around 70% of informal merchants in Africa are not able to make and receive electronic payments, and therefore recognise the value of inclusive payment solutions. This switching payment solution will enable MTN to increase the economic participation of informal cash only merchants in Africa while allowing users to safely transact in a digital space, to benefit both FMCGs and Consumers,” says Debbie Minnaar, General Manager: Products and Services, Group Enterprise Business Unit, MTN.

    Leveraging off of MTN Mobile Money, the solution will enable informal merchants and traders to pay for goods using their mobile device and without the need for a formal bank account. Multinationals benefit from transactions occurring in real-time, and the elimination of the risks and administrative overheads associated with cash transactions, as well as a reduction in costs associated with formal banking.

     

     

     

  • Reps fault exclusion from MTN fine reduction

    Reps fault exclusion from MTN fine reduction

    The House of Representatives has expressed concern over the controversy and implications of the fine imposed on a mobile telecommunication service provider, MTN.

    The lawmakers said the process leading to the reduction of the N1. 040 trillion fines were not satisfactory.

    House Committee on Communications said the process was flawed, because the National Assembly, which is constitutionally saddled with the power of the purse, was excluded from being part of the process.

    Besides, the Committee regretted that the fine and the accompanying error in its reduction, has dealt a huge blow to the country’s image in the comity of nations, with uncomplimentary remarks being made about it at international fora.

    The committee also expressed reservations over the N6.2b budgeted for Subscriber Identity Module (SIM) card registration, out of which the Commission said it has spent about N3.5b.

    The Committee was mandated by the House to investigate the current impasse in the telecommunication sector.

    On the fine reduction, Chairman of the Committee, Saheed Fijabi, said the decision has caused an embarrassment to the country.

    He said: “Our observers may presume that we, as a nation either have no rules of operation with regards to business operations or if we do, we lack sincerity in our operations. It is embarrassing for instance to listen to what the British Broadcasting Corporation (BBC) had to say concerning the present impasse.

    “It is equally appalling to observe the conflict in figures with regards to the reduction of the fine and discussions making the rounds concerning the action or inaction of the National Assembly.”

    The Committee also expressed its determination to unravel what informed the initial fine of over N1 trillion, as well as those behind the reduction from 35 percent to 25 percent.

    Fijabi said everyone connected to the issue would be invited for interaction.

    The management of the Nigerian Communications Commission (NCC), led by its Executive Vice Chairman (EVC), Prof. Umar Danbatta in its defence, said all the mobile network operators were given the opportunity to reconcile their records before the penalty was handed down.

     

     

     

    The EVC added that except for MTN, the other four operators showed substantial compliance by meeting the initial set deadline for the deactivation of the invalidated lines.

    According to him, the deduction of the MTN fine was decided by an inter-agency committee since the Commission has no governing board in place yet.

    The House of Representatives has expressed concern over the controversy and implications of the fine imposed on a mobile telecommunication service provider, MTN.

    The lawmakers said the process leading to the reduction of the N1. 040 trillion fines were not satisfactory.

    House Committee on Communications said the process was flawed, because the National Assembly, which is constitutionally saddled with the power of the purse, was excluded from being part of the process.

    Besides, the Committee regretted that the fine and the accompanying error in its reduction, has dealt a huge blow to the country’s image in the comity of nations, with uncomplimentary remarks being made about it at international fora.

    The committee also expressed reservations over the N6.2b budgeted for Subscriber Identity Module (SIM) card registration, out of which the Commission said it has spent about N3.5b.

    The Committee was mandated by the House to investigate the current impasse in the telecommunication sector.

    On the fine reduction, Chairman of the Committee, Saheed Fijabi, said the decision has caused an embarrassment to the country.

    He said: “Our observers may presume that we, as a nation either have no rules of operation with regards to business operations or if we do, we lack sincerity in our operations. It is embarrassing for instance to listen to what the British Broadcasting Corporation (BBC) had to say concerning the present impasse.

    “It is equally appalling to observe the conflict in figures with regards to the reduction of the fine and discussions making the rounds concerning the action or inaction of the National Assembly.”

    The Committee also expressed its determination to unravel what informed the initial fine of over N1 trillion, as well as those behind the reduction from 35 percent to 25 percent.

    Fijabi said everyone connected to the issue would be invited for interaction.

    The management of the Nigerian Communications Commission (NCC), led by its Executive Vice Chairman (EVC), Prof. Umar Danbatta in its defence, said all the mobile network operators were given the opportunity to reconcile their records before the penalty was handed down.

     

     

     

    The EVC added that except for MTN, the other four operators showed substantial compliance by meeting the initial set deadline for the deactivation of the invalidated lines.

    According to him, the deduction of the MTN fine was decided by an inter-agency committee since the Commission has no governing board in place yet.

     

  • MTN to contest N780b fine in court

    MTN to contest N780b fine in court

    MOBILE giant MTN Nigeria will not pay the N780 billion fine imposed on it by the Nigerian Communications Commission (NCC) over subscriber identity module (SIM) card fraud. It will rather challenge the authority of the regulator in court, the company said yesterday.

    The telco said it had sought legal advice and would challenge the fine and the manner of its imposition which it argued went beyond the constitutional powers of the regulator. The deadline for the payment is December 31.

    But the NCC said it was yet to receive MTN’s court papers.

    Its Director, Public Affairs, Tony Ojobo, wondered why the volte face after MTN had admitted committing the crime and pleading for leniency in a letter to the commission.

    A statement issued by MTN Group Corporate Affairs reads: “Further to the SENS announcement issued by the company on 4 December 2015, shareholders are advised that all factors having a bearing on the matter have been thoroughly and carefully considered, including a review of the circumstances leading to the fine and the subsequent letters received from the NCC.

    “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.

    “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.

    “MTN is advised that in the current circumstances in line with the lis pendens rule (pending legal action) the parties are enjoined to restrain from taking further action until the matter is finally determined. This is consistent with previous judicial decisions in Nigeria.

    “Notwithstanding this action, the company will continue to engage with the Nigerian authorities to try and ensure an amicable resolution in the best interests of the company, its stakeholders and the Nigerian authorities.”

    The telco advised its shareholders to continue to exercise caution when dealing in the firm’s securities until a further announcement is made.

    NCC imposed a fine of N1,4trillion on MTN for “criminally harbouring” some 5.2million pre-registered SIMs on its network, a situation security experts said left much to be desired, especially at a time the country was fighting the Boko Haram insurgency. The penalty for each pre-registered SIM is N200,000. All the telcos know about this and they have at one time or the other been sanctioned for selling pre-registered SIM cards to their customers.

    After much pressure from the telco and intervention form the Presidency, the fine was reduced to N780billion.

    “On 3 December 2015, shareholders were informed that MTN had received a formal letter dated 2 December 2015 from the NCC (the first letter) informing the company that, after considering the company’s request, it had taken the decision to reduce the fine imposed on the MTN Nigerian business from the original N1.04trillion (the original fine) to N674m, which had to be paid by 31 December 2015. The fine relates to the late disconnecting of 5.1 million MTN Nigerian subscribers in August and September 2015. This was a reduction of 35 per cent of the Original Fine.

    “Late on 3 December 2015, the day after receipt of the first letter, the company received a further letter from the NCC dated 3 December 2015 (the second letter). The second letter, which was stated to supersede the first letter, informed the company that the fine had actually been reduced by 25 per cent to N780billion and not by 35 per cent to N674billion, as was stated in the first letter. The payment date remained 31 December 2015,” MTN Group explained, adding that neither the first letter nor the second letter set out any details on how the reduction was determined.

    MTN said it was carefully considering both the first and second letters, adding that its Executive Chairman Phuthuma Nhleko will immediately and urgently re-engage with the

    Nigerian authorities before responding formally, as it is essential for the company to follow due process to ensure the best outcome for the company, its stakeholders and the Nigerian

    authorities, and accordingly all factors having a bearing on the situation will be thoroughly and carefully considered before the company arrives at a final decision.

    “Shareholders are therefore advised to continue to exercise caution when dealing in the

    company’s securities until a further announcement is made,” the statement from MTN Group Corporate Affairs concluded.

  • MTN unveils corporate loyalty programme

    MTN unveils corporate loyalty programme

    MTN Business, the Enterprise Business Unit of MTN Nigeria, has launched its MTN Prestige Corporate Loyalty programme to reward its customers, who have continuously demonstrated their trust in the services of the telco.

    A statement by the telco said with over $15 billion invested in the economy, it has been a catalyst for economic growth and development, providing technology platforms that drive economic inclusion across all segment of the society.

    A collection of 100 CEOs and captains of industry last weekend gathered at the Civic Centre, Victoria Island, Lagos, and were treated to a night of alternative music from the Ayo Bankole orchestra, capped with performance from Nigeria’s music export Asa.

    Welcoming the guests, Mr. Frederick Udoaka, Chief Enterprise Solutions Officer, MTN Nigeria, acknowledged existing partnership between MTN Business and the Nigerian corporate citizenry. He stated that the partnership has yielded desired results in terms of economic development that is enhanced by world class ICT services provided by MTN.

    “Over the years, at MTN Business, we have built a solid track record of enabling some of Nigeria’s biggest corporate organisations to foster international collaboration through geo-expansion, thus eliminating borders and reaching new markets. The fact that we continually have more and more businesses, big and small, sign up for our solutions testifies to the high level of confidence that these businesses repose in us. This evening is about saying thank you to our most valued corporate customers. We believe that loyalty goes with reward, and that is what the MTN Prestige Corporate Loyalty program represents,” Udoaka said.

    Further explaining the MTN Prestige programme, Ms. Onyinye Ikenna-Emeka, General Manager, Enterprise Marketing, MTN Nigeria, said MTN Business has continued to work towards providing real transformation to different businesses and institutions to enable them to deliver value to their key partners and markets.

    “As we continue to invest in infrastructure and capabilities, we understand that the most important factor in our equation is the customer. In pursuit of our commitment to our customers, we are launching MTN Prestige, a corporate loyalty programme for our top business customers spread across different market segments and verticals. This is a collection of our top 100 customers who have blazed the trail in their various markets riding on the best-in-class technology solutions,” Ikenna-Emeka said.

    Ikenna-Emeka said: “As members of MTN Prestige, our top 100 enterprise customers will enjoy a broad range of cost optimisation, lifestyle and business benefits among others. We will continue to keep our customers at the centre of all that we do.”

     

     

     

  • MTN’s reduced fine

    MTN’s reduced fine

    • We support the intention but wonder if it was legally done

    The whopping N1.4 trillion fine imposed on the global telecommunication giant, MTN, for having 5.1 million unregistered subscribers on its network, was not arbitrary. According to the regulatory agency, the Nigerian Communications Commission (NCC), MTN admitted the infraction, and had pleaded for mercy. Lending his voice to that plea, the newly appointed minister for communication, Adebayo Shittu, shortly after his appointment, said that the fate of MTN on the fine imposed by law was in the hands of President Muhammadu Buhari, who would discuss with his South African counterpart, at the sidelines of the recent China-African summit in South Africa.

    In answer to that plea, the fine imposed on MTN has now been reduced to N780 billion. Pressed to explain the principle behind the reduction, the Director, Public Affairs of NCC, Tony Ojobo, said, “At that time, of course, the NCC Board had not been constituted, no minister, the authority of the President was required for such a decision to be taken in the absence of the minister, and so the commission had to notify the presidency”. His explanation did not, however, explain, whether the commission or the President has power to administratively amend the extant regulation or the yardstick used to impose the fine.

    We appreciate the argument by the minister, that “Nobody wants MTN to die” and the reemphasis that “It is not in the interest of Nigeria for MTN Nigeria to die”. As a corporate entity, and employer of labour contributing its quota to the economic development of Nigeria, it is indeed in our nation’s interest that the telecommunication company should survive and grow. But it is in our higher national interest that under a democratic government, administrative bodies operate in accordance with clearly definable standards and procedures, if they are not to be accused of acting arbitrarily.

    While the President has enormous powers as the country’s chief executive, such powers can only be legitimately exercised in accordance with the provisions of the constitution, laws, legislations, sub-legislations, rules and regulations. Much as we sympathise with MTN, reduction of a fine imposed on her by a law or regulation, in our view, can only be legitimately reduced by another law or regulation. We doubt if the argument of Mr. Ojobo, that “The stakeholders looked at it with all the pros and cons and reduced the fine by 25 per cent”; is not an arbitrary exercise of administrative power.

    Except of course the so-called stakeholders are by law or regulation empowered to determine the fine to be imposed for the infraction under review. Strangely, in determining the reduction of the fine, a new set of controversy was introduced. In the initial letter sent to MTN, and made available to the press, the fine was reduced by 35 per cent. Twenty-four hours later, 10 percent of the fine was reinstated, and the telecommunication giant was now granted a 25 percent waiver. Reinstating that only 25 percent waiver was granted, the NCC claimed that the original communication was in error, and should be disregarded.

    The NCC owes Nigerians more explanation than it has offered. If the discrepancy was an oversight, then it was grievous. Does it mean that the decision to reduce the fine was not communicated to the author of the letter in writing? If truly the decision was made after “the stakeholders looked at it”; how come such an important document was sent out without the chief executive of NCC taking a look at it, and confirming the content. We urge NCC not to muddle the appreciable integrity gained by our regulators, especially since the coming to power of Buhari’s presidency.

  • Fitch cuts MTN’s credit rating

    MTN Group Ltd.’s credit rating was cut one level by Fitch Ratings Ltd. because of the increased risk that Africa’s largest phone company faces in its two biggest markets, Nigeria and South Africa.

    The rating was cut to BBB-, Fitch Ratings said in a statement on Thursday. The outlook was raised to stable from negative.

    In Nigeria, Africa’s largest economy, the telecommunications regulator has fined MTN $3.9 billion for failing to switch off unregistered mobile-phone customers, which was revised down from an original penalty of $5.2 billion. South Africa’s credit rating was cut by Fitch last week because of a worsening growth outlook that threatens fiscal credibility.

    ”These changes result in increased credit risk to MTN given its reliance on emerging markets and its exposure to South Africa and Nigeria, in particular,” Damien Chew, an analyst at Fitch, said in the statement. “An upgrade is unlikely in the short term due to MTN’s significant exposure to countries with high political and regulatory risk.”

  • NCC raises record fine against MTN by $500 million

    NCC raises record fine against MTN by $500 million

    The Nigeria Communications Commission (NCC) yesterday  increased the fine against MTN to $3.9 billion 24 hours after reducing its initial penalty by 35% to $3.4 billion from the original $5.1 billion.

    “There was a typo,” Tony Ojobo, NCC spokesman,  told Bloomberg.

    “The reduction should have been 25 percent. We saw the mistake and had to fix it,” he said.

    On Thursday  MTN received a note from the regulator stipulating that the hefty penalty imposed on them in October will be cut by a third. But the company said  yesterday  it received a new set of instructions raising the fine by $500 million, with the deadline still scheduled for the end of this  month.

    “The second letter, which was stated to supersede the first letter, informed the company that the fine had actually been reduced by 25%,” MTN said in a statement. “Neither the first letter nor the second letter sets out any details on how the reduction was determined.”

    The company’s share price opened almost 5% down at the Johannesburg Stock Exchange after the announcement. This week alone has seen MTN lose 8% of its share price, down around 40% so far this year.

    Bloomberg    also reported yesterday  that  sources inside MTN suggested that the South African-based mobile carrier would seek further reduction of the revised penalty announced only for the opposite to happen.

    Thus far, the company has been non-committal about whether it will meet NCC’s previous and new terms. “The executive chairman Phuthuma Nhleko will immediately and urgently re-engage with the Nigerian Authorities before responding formally,” MTN  a statement on Thursday.

    In October, the NCC  slammed MTN with a $5.2 billion penalty after the company  ignored an edict to disconnect unregistered SIM cards from its networks. The fall out since then has been enormous. MTN has lost over $5 billion in market value. On top of that its group CEO Sifiso Dabengwa and its Nigeria head Michael Ikpoki have had to resign over the issue.

  • Ikpoki resigns as MTN Nigeria’s CEO

    Ikpoki resigns as MTN Nigeria’s CEO

    The management of MTN Nigeria has announced the resignation of its Chief Executive Officer (CEO) Micheal Ikpoki and head of Regulatory and Corporate Affairs Akinwale Goodluck.

    The telecommunications company in a statement issued Thursday said; “MTN Nigeria’s CEO Michael Ikpoki and the head of Regulatory and Corporate Affairs Akinwale Goodluck have tendered their resignations with immediate effect.”

    The statement also quoted MTN as announcing a replacement for the duo; “They are replaced by Ferdi Moolman as MTN Nigeria CEO and Amina Oyagbola as its head of Regulatory and Corporate Affairs,” the statement said.

    It added; “Mr. Moolman was previously COO at MTN Irancell and most recently CFO at MTN Nigeria. A Nigerian national, Ms Oyagbola also retains the position of MTN Nigeria’s Head of Human Resources. She formerly headed regulatory affairs at the Nigerian operating company.”

  • NCC cuts MTN fine to $3.4bn

    The Nigerian Communications Commission has cut a fine imposed on MTN Group by more than a third to $3.4 billion and gave the South African mobile phone operator until the end of the year to pay it, the company said on Thursday.

    The NCC handed Africa’s biggest mobile phone company the penalty in October after MTN failed to cut off users with unregistered SIM cards from its network, Reuters reported.

    Nigeria, MTN’s biggest market, has been pushing telecoms firms to verify the identity of subscribers amid worries unregistered SIM cards were being used for criminal activity in a country facing insurgency from the Boko Haram sect.

    The fine, originally $5.2 billion, prompted MTN to hold talks with the NCC over the past five weeks seeking a reduction.

    “After further engagements with the Nigerian authorities, the NCC has reduced the imposed fine,” Reuters quoted MTN as saying in a statement.

    The company, which makes about 37 percent of its sales from Nigeria, said it was considering the NCC’s decision.

    “Executive Chairman, Phuthuma Nhleko will immediately and urgently re-engage with the Nigerian authorities before responding formally,” it said.

    Nhleko, who took charge for up to six months after the abrupt resignation last month of Sifiso Dabengwa, led the company for nine years before stepping down in 2011.