More trouble for MTN in Nigeria - TechCentral

More trouble for MTN in Nigeria

nigeria-640

The Nigerian Communications Commission (NCC) appears to be playing hardball with MTN Nigeria over a US$5,2bn (R71bn) fine it has imposed on the company.

According to a report published by Nigerian newspaper Leadership, the NCC has suspended all regulatory services to the company until it pays the fine for failing to disconnect more than 5m Sim cards that had not been registered under the country’s strict Sim card registration laws.

The newspaper said, too, that MTN is facing a probe for 28 “accumulated breaches”.

It quoted an NCC document, which it said it had exclusive access to, as saying: “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”.

“In the NCC quarterly compliance enforcement report for [the second quarter of]2015, out of the six sanctions imposed on operators for various acts on noncompliance, MTN was involved and sanctioned for four separate infractions,” the NCC document is reported to say.

“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 wilful noncompliance by MTN ceases.”

The document is furthermore said to accuse MTN of repeated violations. “MTN’s noncompliance with the deactivation directive is unfortunately not an isolated incident. It needs to be seen in the context of a general pattern of noncompliance with regulatory directives…”

MTN’s troubles in Nigeria come as it seeks to have its operating licence renewed. The licence expires next year.

mtn-640

In South Africa, meanwhile, where MTN is listed, it is facing a potential probe by the JSE over the timing of its disclosure to shareholders of the Nigerian fine.

The JSE is engaged in “focused conversation” with Deutsche Securities, MTN’s sponsor, in the interests of the operator’s shareholders, GM for issuer regulation Andre Visser said on Tuesday.

Despite news of the fine being in the market in the early hours of Monday morning, MTN failed to notify shareholders about it until 2.24pm.

It’s not yet clear whether the JSE will launch a formal investigation into the matter.

MTN’s share price has taken a beating over the NCC fine. It collapsed by 12,5% on Monday, wiping R44bn of its market capitalisation. Shortly before 3pm on Tuesday, the counter had shed another 4,8%.

Nigeria is MTN’s biggest and most profitable market. At the end of September, the operation there had 62,5m subscribers.  — (c) 2015 NewsCentral Media

5 Comments

  1. Vusumuzi Sibiya on

    Eish!! This isn’t going to be having a good ending…

    …can’t help but wonder if this HUGE storm hadn’t been already forecast way in advance; and some smart-ass M-odern T-itanic N-etwork captain(s) made the decision to steer head-on into it.

  2. Just to add another flavour to the mix…
    Their telco license is also up for renewal next year…
    Could be an exit strategy.

  3. Vusumuzi Sibiya on

    LMAO!! All this is going to do, is solidify Vodacom’s standing as the leading ZA network… there’s just room for 3 operators in this maturing market; and Cell C needs the deal with Telkom to come through.

    All is not lost for MTN, it’s just one of those hard lessons to be learn’t in business along with the other lessons they need to learn about OTT service providers; but they are a competent, proudly South African outfit and they’ll bounce back even stronger from the depths of this hole that they alone are responsible for digging themselves into.

  4. I agree with you. The Cellkom deal needs to materialise. I’m hoping the recent rejection of the Telkom offer is just part of the cat and mouse games that companies play when courting each other. Whatever it is, I hope they get it over and done with so they can make a solid move whilst MTN is busy fighting its demons. A stronger Cellkom and a weaker MTN might be good for the consumer. Maybe.