Lest We Forget

a commentary on socio-political developments and institutional policies

The MTN Jigsaw – Season 2

Who wants MTN dead? At least most Nigerians do not. Yet that does not give the private SA commercial enterprise the latitude to ride rough-shod on us. Rules are meant to be obeyed and not breached. Any breach will naturally attract the necessary sanctions in an organised society. However, there are times when the capacity of our leaders to take well-informed decisions, especially in line with global best practices, is brought under critical interrogation. Our approach to issues can, at best, be described as pedestrian and unscientific.

Take the issue of Nigeria Communication Commission, NCC and Mobile Telecommunication Network popularly called MTN. MTN was slammed with a N1.4 trillion fines for its failure to register or deactivate 5.1 million customers’ SIMs (Subscriber Identity Modules), a laxity which President Buhari later revealed as contributing to about 10,000 deaths in the hands of Boko Haram insurgents.  It must be reiterated that all service providers were privy to the fact that failure to register customer’s SIM would attract N200,000 penalty per SIM. Aware that Nigerian laws and penal provisions were mere paper tiger, the service providers went on to flout the NCC’s warnings and instructions.  While the other service providers complied and deactivated most of their unregistered lines, MTN like a drum-major refused to abate.  At the end of the day all of them were appropriately sanctioned by NCC to the degree of the infractions of each of them. That was how MTN acquired its humongous N1.4 trillion liability. As a form of leniency, after the initial hues and cries, the amount was reduced by 25% further dropping the liability to N780 billion.

Instead of approaching the NCC for further terms of settlement, MTN became intemperate mounting an international propaganda and playing the xenophobic card, forgetting that both Airtel and Etisalat, which were equally sanctioned, were as foreign as it was. It initially took its case to the court of public opinion before finally heading for the trial court to challenge the NCC and its constitutional rights to impose fines on defaulting service providers.

While the courtroom drama was going on diplomatic moves were being made with subtle blackmail that the fines would send wrong signals to prospective investors that Nigeria is a hostile environment to invest. In a silly and thoughtless reaction, one South African Vestact Fund Manager, Sasha Naryshkine, called it an “over-reaching regulation”, saying “It simply adds to perceptions about Nigeria as unfriendly place for foreign capital” as if such disrespectful business conduct and  infraction could ever be tolerated in South Africa.  As a fallout of the critical situation the MTN Group CEO, Mr. Sifiso Dabengwa resigned and Mr. Phuthuma Nhleko was later appointed to take over.

All of a sudden there was information that the MTN has paid N50 billion ($250 million) to Government “in good faith”, a claim that NCC initially denied of its awareness, thus prompting the intervention of the Senate to unravel the “mystery payment”. It later transpired, at a Senate inquiry, that the money was paid into a FG special account bypassing the NCC the regulatory agency that imposed the fines. The Attorney General of the Federation (AGF), Abubakar Malami, the Accountant General (AG) and the CBN were fingered as having entered into an agreement with MTN without any representation from NCC the supervisory and regulatory agency?

First and foremost it must be borne in mind that each day that the MTN refused to deactivate the unregistered SIMs, as directed by NCC, the service provider was smiling to the banks with a very huge revenue at the cost of the integrity of our regulatory laws and security of lives and property. Having made such a huge illicit revenue, in spite of our regulatory laws, why should it not cough out some of the revenue as penalty? If the MTN pleads that the penalty is huge and unpayable in one fell swoop should it not provide its revenue profile and bank statements to NCC as clear evidence of its inability to pay the penalty at once? After all, the company is the one at fault and begging for mercy. Why should the profile of MTN be raised by making it to negotiate directly with FG rather than the NCC? Is the FG implying that NCC is not competent to handle the negotiations?

The terms of payment were as ridiculous as the composition of the illegitimate committee. First they slashed the penalty from N780 billion to N300 billion! What the heck! That translates to roughly N50,000 per unregistered SIM! What a whopping loss of revenue!  What a great injustice to the other service providers that were charged and promptly paid N200,000 for each unregistered SIM. The implication of this is that if you want to commit infraction, as a foreign company in Nigeria, commit a very heavy infraction, and negotiate to get a slap on the wrist. This will not augur well for level playing field constantly advocated in the communication industry. Justice and fairplay demands that the charges of other service providers should be slashed to roughly N50,000 for each unregistered SIM at the time of the penalty, and the balance of their overpayment be refunded to them. That is natural justice.

It is just that in Nigeria our institutions are not strong and independent. Otherwise NCC should challenge the legality and legitimacy of the “kangaroo arrangement” in court and fight for the restoration of its legitimate rights and duties as the lawful regulatory body, Nigerian Communication Commission.  In fact in other climes, the Executive Chairman of the Commission, Prof. Umaru Danbaba would have resigned in ptotest for the gratuitous insult and an undeserving vote of no confidence to which the usurpation of his functions amounted.

Buoyed by inexplicable motives, the National Association of Telecommunications Subscribers (NATCOMS) made an unpardonable suggestion urging “the Federal Government to accept the N50 billion payment by MTN as the total fine”. One begins to wonder whose interest NATCOMS is protecting, Nigeria’s or providers’? Is it canvassing for business conduct impunity which has characterised most of the services of the telecommunication organisations -the drop calls, the unsolicited sms, the cross-connections, connections without communications, connections without ringtones, and a host of other nauseating infractions? Is that how business is conducted in other settings? Yet the supposedly consumers protection NGO would want MTN to be almost completely let off the hook. What a shame of consumer protection!

By the terms of the proposal of MTN it would take MTN five years to settle the debts. MTN would pay N100 billion between December 31st,  2016 and December 31st, 2020 “in five equal annual instalments”. That amounts to N20 billion annually. What happens if MTN falls foul of the law in the intervening years or if it fails to redeem in subsequent years, probably pleading a fall in revenue? By the way, is it the duty of MTN to prescribe for us how it will settle its indebtedness, some of which it proposed to do in kind? How ridiculous! Penalties are punishments, and punishments are not supposed to be enjoyable or convenient. If MTN has to pay on its own convenient terms and conditions, then everything ceases to be a penalty. It becomes corporate social responsibility activities by other means.

In fact, the greatest insult to our intelligence is the MTN’s proposal to use N150 billion of the penalty fines to participate in Nigeria’s sovereign bond purchase. According to MTN “such participation in sovereign bond purchase is as a demonstration of its commitment to and confidence in the Nigerian economy”. They should pay their debt and get out of the country if they have no confidence in our economy. This laughable proposal is akin to the proverbial using of Abu’s money to entertain him, with Abu reciprocating in thanks and praises. In other words MTN would use the N150 billion penalty fines to buy Nigeria’s sovereign bond, which will accrue back to MTN later with interest. Haba! Are we such dunces? This must be the joke of the millennium. This is real MTN jigsaw puzzle; the more you look, the less you see. Apart from the fact that NCC was not carried along in the ludicrous negotiations, the proposal in its entirety is a charade and  unacceptable to us as Nigerians. If MTN decides to close shop other willing communication companies will certainly come in.

Lest I forget, nobody wants MTN to leave or to die, nevertheless it must play by our rules, failure of which it must bow to the full weight of the sanctions. Pure and simple. On the other hand, if you disagree with my views on this issue, let me know your take on it.


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