Recently the Nigerian Communications Commission (NCC) reportedly slammed a fine of N1.04 trillion ($5.2 billion) on MTN Nigeria. A related news story had stated that, in addition to MTN, three other telecom companies in the country – namely, Airtel Nigeria, Globacom Nigeria and Etisalat Nigeria – had been sanctioned by the NCC “for having pre-registered SIM cards in their system”. As stated in the story, the four telecom companies were fined a total of N120.4 million for that infraction, having failed to fully comply with the NCC’s directive to deactivate pre-registered and defective customer SIM cards. Of this sum, MTN, said to have 62 million subscribers on its network and to control 43 percent of the country’s telecom market, was asked to pay the sum of N102.2 million while Globacom, Etisalat and Airtel would pay N7.4 million, N7 million and N3.8 million, respectively.
However, in a story entitled “MTN in talks with NCC over N1.04tr fine on telecoms firm”, The Guardian of October 27, 2015 explained that this later fine on MTN Nigeria “relates to the timing of the disconnection of the 5.1 million MTNN subscribers that were disconnected in August and September 2015 and is based on a N200,000 fine for each improperly registered subscriber”. The story, quoting a source in the NCC, also noted that “it was not only MTN that was found culpable” but identified MTN as “the biggest culprit”, adding that “the telecommunications firm was found having a database allegedly been (sic) use (sic) by kidnappers, insurgents, miscreants, armed robbers and other criminals to commit crimes in the country.”
So it was partly a case of MTN Nigeria, a subsidiary of a foreign firm, turning itself into a security risk for its host country while growing its business and improving its profit illegally.
The fine against MTN and the other telecom companies is perhaps the best news to have come out of Nigeria’s telecommunications sector in recent times. And no less interesting is that MTN has by implication admitted its culpability by reportedly having apologized and pleaded for leniency and staggered payment or reduction of the fine.
This penitence is welcome and the attendant plea for leniency should be given due consideration. However, it must be said that there is hardly any valid argument for reducing a statutory fine, more so when the fine was imposed for an infraction known to the offender to attract the fine before it was committed. Even MTN would admit that it insists on collecting its dues in full from its subscribers under any circumstances, once it has cause to believe that such dues are justified.
If the fine were arbitrary, in which case it would be illegal, and MTN decides to pay nonetheless as some form of penance for what could be seen as its unconscionable business practices in Nigeria, then it would be justified to ask for its reduction on compassionate grounds. But this seems to be a case where it knew the rules of engagement ab initio, and the penalty for flouting them, and yet chose to flout them because it believed it could do so with no serious, if any, consequence, and yet reap huge profits from such corporate misconduct – the profit from harbouring 5.1 million improperly registered subscribers in its network. This amounts to roughly 8.2 percent of its subscribers – a source of considerable illegal revenue which it seemed reluctant to dispense with despite the security threat it posed to its host country, as some of those lines were said to belong to violent criminals including kidnappers, insurgents and armed robbers.
This development is also interesting for how it seems to strengthen the case of those who argue that the “body language” of a leader or a government can be a critical factor in injecting positive change in a country. In this case, all the variables linked to the negative practice of improper SIM registration were present before the inauguration of the present government of President Muhammadu Buhari. The existence of such subscribers and the impropriety of the practice could not have been unknown to both the telecom companies and their regulator, the NCC. Also, the rule that makes such registration punishable could not have been unknown to the telecom companies and the NCC.
There is only one new variable here: the Buhari government with its body language of insistence that it cannot be business as usual. And this seems to be charting a new course in the telecom sector where such infractions and the threats they posed to our security and economy were previously ignored. The new course is evident from the decisive action that has been taken against the infractions by MTN and the other telecom companies.
With the new turn of events, we also realise that such deployment of body language can both improve the moral climate in which business is done in Nigeria and be lucrative – judging by what MTN and the others may have to pay as fine for their infractions.
And as Azu Ishiekwene mentioned in his column “The NCC Dog and the MTN Tail” on the back page of Leadership of November 6, 2015, in 2008 US courts fined Siemens a record $1.6 billion “for bribery and corruption cases involving the company in the US and Germany”. So the Nigerian authorities are not doing something unprecedented by levying a fine on MTN for a more serious infraction capable of undermining state security in addition to its immorality as in the Siemens case.
In a related development, regulatory intervention seemed to have gone awry with the sanction the Financial Reporting Council of Nigeria (FRC) imposed on Stanbic IBTC Holdings and KPMG Professional Services, its audit services partner, for alleged “financial misstatements”. This is apparent from the review of the FRC’s handling of the matter by the Central Bank of Nigeria (CBN), which returned a verdict favourable to Stanbic IBTC and its fellow accused. And since Stanbic IBTC has South African origins like MTN, one must see the CBN’s favourable intervention on the former’s behalf as a sign that the Nigerian authorities would not sanction a foreign firm doing business in the country without justification.
Also, there is more reason to believe in the Nigerian regulatory regime from the post-privatisation monitoring of the new power companies by the Bureau of Public Enterprises (BPE), which has not led to any major incident since the virtual conclusion of the privatisation of the power sector in 2013.
But the lesson all regulatory bodies in the country – even those believed to be doing well – stand to learn from the latest development between NCC, MTN and the other telecom companies is that they can always improve their performance as the NCC has apparently done.
Abiodun Olukoya
