MTN was not a target of the Nigerian Communications Commission - Analyst - CNBC Africa

MTN was not a target of the Nigerian Communications Commission - Analyst

Western Africa

by Tendai Dube 0

This has broached concern for the broader telecoms industry in Nigeria and how it impacts investments. Photo: Flickr

Johannesburg-based [DATA MTN: MTN] continues to further engage the authorities in Nigeria for leniency after a heavy regulatory fine of 5.2 billion dollars was given to the telecoms giant when it failed to disconnect users with unregistered SIM cards; this has broached concern for the broader telecoms industry in Nigeria and how it impacts investments.

"I think essentially as the Nigerian Communications Commission (NCC) had said, a couple of others were taking steps and if you look at it from the point of view of the market itself, if others are taking steps and cutting lines that are not registered and MTN was not seen to be taking active steps to do that,” Lami Adekola, Deputy Managing Director of Aquila Asset Management.

He reckons other telecoms companies would think it was an undue advantage for MTN if it was not making the same effort as they are.

"I don’t see it as a case of MTN taken out as a scapegoat, I see it as a case of the NCC and the government of the day laying down clearly that it's not business as usual and once we have a framework, once we put policy out there it has to be adhered to, it has to be taken seriously

Not just in the telecoms space he says, other sectors will see government actively implementing the law and serving up fines there, making sure companies in any sector adhere to the rule of law.

Adekola does not agree with chatter that had MTN been listed on the Nigerian Stock Exchange, then it would not have been fined because other listed companies have been fined, however not to the same magnitude, he admits.

"I believe they will successfully negotiate this downwards, I still believe it will be in the range of the billions, one billion or two billion there about."

"It’s a strong statement of intent, by the authorities and the government - MTN and other investors in Nigeria now know it’s time to take the government very serious.”

Adekola says the fact that the NCC renewed and extended MTN's licence until August 2021 reaffirms his point that this is not a "witch hunt".

"If it were a witch hunt then what is the point of renewing a licence for someone that you expect to pay a fine of [$]5.2 billion and stand on the rough end of the regulator.

MTN was said to be looking at buying Nigeria-based Visafone in April this year.

"If indeed that deal was real and those conversations advanced to a significant level, then MTN might want to be reconsidering because you are paying fines and another cash outflow to acquire business that you have to take a while to grow and start getting the type of revenue that you need."

Johannesburg-based MTN continues to further engage the authorities in Nigeria for leniency after a heavy regulatory fine of 5.2 billion dollars was given to the telecoms giant when it failed to disconnect users with unregistered SIM cards; this has broached concern for the broader telecoms industry in Nigeria and how it impacts.

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