TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Huge Group to acquire what was Virgin Mobile in South Africa

      6 July 2022

      TechCentral needs your feedback – 2022 reader survey now live

      6 July 2022

      Call for ‘energy emergency’ to end load shedding

      6 July 2022

      What South Africa can learn from India’s IT boom

      6 July 2022

      Where to next for Dimension Data

      5 July 2022
    • World

      China accuses US of ‘technological terrorism’

      6 July 2022

      Apple devices to get ‘Lockdown Mode’ to fight spyware

      6 July 2022

      Scientists at Cern observe three ‘exotic’ new particles

      6 July 2022

      Bitcoin’s first African adopter plans own digital currency

      6 July 2022

      Bitcoin hints at a bottom – but it may be different this time

      5 July 2022
    • In-depth

      The bonfire of the NFTs

      5 July 2022

      The NFT party is over

      30 June 2022

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022
    • Podcasts

      Demystifying the complexity of AI – fact vs fiction

      6 July 2022

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022
    • Opinion

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Opinion»Duncan McLeod»MTN fine is a state-sanctioned mugging

    MTN fine is a state-sanctioned mugging

    Duncan McLeod By Duncan McLeod4 December 2015
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Duncan-McLeod-180-profileIt’s time to call the situation South African telecommunications group MTN is facing in Nigeria what it really is: a state-sanctioned mugging.

    The Nigerian government, through its communications commission, is pointing a gun at MTN’s head, demanding that it hand over an absurd amount of money. To make it even worse, it is insisting that it do so immediately or face further, unspecified sanctions. Pay up, or else!

    It is certainly true that MTN erred in not cutting off 5,1m unregistered Sim cards in Nigeria in time for an August deadline set down by the Nigerian Communications Commission (NCC). And it is only fair that it be sanctioned for this. The fine also calls into question governance at MTN and whether the board’s risk committee was doing its job. But the punishment proposed by NCC, even after the fine was cut this week by a quarter, in no way fits the crime.

    With a lack of communication from the NCC about why it has imposed the maximum fine permissible, it’s difficult to see this as anything more than a revenue-raising exercise by a government that is under severe pressure as oil revenues slump. Ultimately, of course, it could end up hurting Nigeria much more in the long term than it does MTN. Foreign investors don’t look favourably on such risk and will think twice about investing in the West African nation.

    The decision this week by the NCC to reduce the fine by 35%, only to communicate to MTN less than 24 hours later that, in fact, it had meant to cut it by only 25%, reinforces the view that the fine amount is arbitrary and the authorities’ approach capricious.

    Remember, the fine, even with a 25% reduction factored in, is almost 40 times larger than the next-biggest fine imposed anywhere in the world on a telecoms operator (US$100m on America’s AT&T).

    Remember, too, that there’s little evidence that Sim card registration laws — of the kind MTN found itself in trouble over in Nigeria — have had much of an impact in achieving their intended outcome of helping law enforcement agencies in fighting crime and terrorism.

    MTN pointed out in a statement on the JSE’s stock exchange news service on Friday that the NCC has not provided any details about how the reduction in the size of the fine was determined. This is not the sort of behaviour one would expect of a competent and effective regulator. And the decision to change the size of the reduction in the fine from 35% to 25%, apparently quite arbitrarily (it’s reportedly handily blamed a “typo”), speaks either of incompetence by the NCC or political meddling of the worst order.

    Although MTN has little choice but to cooperate with the authorities in Nigeria in an effort to get the size of the fine reduced — indeed, for now it’s dancing carefully around them, doing it’s best not to offend — the time may be approaching where it either has to call the NCC’s bluff, or to start fighting back legally. That time is not quite yet, though.

    MTN’s best hope of securing a meaningful reduction in the fine could happen in the coming day or so, during a high-stakes meeting that is set to take place on the sidelines of the Forum on China-Africa Cooperation (Focac), currently underway in South Africa.

    MTN-640

    President Jacob Zuma is set to meet with his Nigerian counterpart, Muhammadu Buhari, at Focac, with the discussions reportedly set to focus the MTN issue.

    While it’s important that the government approaches the discussions with all the necessary diplomacy and tact, it’s also important that the message is clearly conveyed to the Nigerians that the size of the fine imposed on MTN is gratuitous and unacceptable.

    It needs to be made clear that the fine will have a direct impact on the taxes MTN pays the South African government, to the extent that it could have an impact on service delivery to ordinary South Africans.

    Nigeria is playing a game of brinkmanship with South Africa. It is in the process of trying to mug one of its most successful companies, one which has pumped billions of dollars into Nigeria’s economy over the past 15 years and provided tens of millions in that country with access to telecoms services for the first time. It seems plausible — likely, even — that it is doing this in an effort to plug a yawning hole in its finances.

    The best outcome to this mess will be if Nigeria agrees to a massive reduction in the fine — even 5% of the original fine, or $260m, would still make it the biggest in history — and that this incident and its resolution then leads over time to warmer relations between Abuja and Pretoria. South Africa and Nigeria can achieve much more as partners in Africa than as rivals.

    But if the diplomacy fails, and Nigeria continues to play hardball with MTN — insisting that the unreasonable fine be paid — South Africa would be quite justified in taking a tougher line. Pretoria must not allow itself to be bullied and it most certainly must not allow one of its most successful companies to be subjected to a brazen mugging.

    • Duncan McLeod is editor of TechCentral. Find him on Twitter
    Duncan McLeod Focac Jacob Zuma MTN Muhammadu Buhari NCC Nigerian Communications Commission
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleReduction of MTN fine a ‘positive’ move
    Next Article Muthambi must go to save digital TV programme

    Related Posts

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Huawei, MTN to help build 5G-powered ‘smart mine’

    30 June 2022

    State capture probe ends but South Africa remains ‘broken’ by corruption

    23 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Hot Ink certifies and diversifies to maintain competitive printing edge

    5 July 2022

    Increased flexibility with Dell Precision Mobile Workstations

    5 July 2022

    The 5 secrets of customer experience in the cloud era

    5 July 2022
    Opinion

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.