MTN Group is Africa’s leading cellular telecommunications company has been sized down by the financial arm of regulators. Its branch in Nigeria, MTN Nigeria, has until November 16, 2015, to pay the sum of $5.2 billion to the federal government through industry regulator, The Nigerian Communications Commission (NCC).
MTN Nigeria is said to be behind the yellow crime line for failing to cut–off about 5 million unregistered lines from its network at September 2015 deadline set by the NCC.
It was fined $1,004 per unregistered line bringing the estimate to $ 5.2 billion, “bad market”
MTN Africa is responsible for 231 million subscribers across 22 countries and the bulk of this clientele, 62 million subscribers precisely, comes from Africa’s biggest market, Nigeria, according to Bloomberg reports.
The penalty for defaulting would be a temporary suspension on South African Stock Exchange and its erstwhile Group Chief Executive Officer, Sifiso Dabengwa, scurrying down to Nigeria to plead for leniency, before finally resigning.
Its earnings report across is set at estimated revenue for 2015 is $10.7 billion and the fine ($5.2 billion) is about 50% of that amount according to Bloomberg. the fine is twice MTN Nigeria’s annual profit in the year 2014 according to People’s Daily.
Bad Market for The MTN Group
With limited financial options, the company will have to struggle financially or borrow before the effect of this fine will subside over time.
For the mere fact that they will have to resort to borrowing to meet obligations like paying salary, running adverts or carrying out corporate social responsibilities and stay afloat, it is what in Nigeria’s market women lingo is called – BAD MARKET.
NIGERIAN GOVERNORS INSIST ON PAYMENT
Chairman of the Governor’s Forum and governor of Zamfara state, Abdulaziz Yari hints that the Forum also backs the Nigerian Communications Commission (NCC) over the N2.1trillion sanction on MTN.
“We resolved that we must look at ways to enhance revenue generation and at the same time look at ways to cut our overhead costs more especially the political office holders’ salaries and other overhead expenses.
“The situation is no longer the same when we were asked to pay N18,000 minimum wage, when oil price was $126 (per barrel) and continued paying N18,000 minimum wage when the oil is $41 and the source of government expenditure is from oil, and we have not seen prospects in the oil industry in the near future.
“We will diversify our economy in the area of agriculture and mining. But at the same time, we should understand our situation where some of us (states) today are taking N100million take home (monthly allocation) and then have salaries in particular of over N2billion to pay.
“We therefore, agreed here to take this suggestion to NEC in our meeting tomorrow (Thursday) so that we can be able to find ways to tackle this problem.
“And we are looking at coming together to discussing with Mr. President and his team, with governors, technocrats and experts in the economy to see how we can tackle our troubled situation. We are working harder to deal with it.
“Hence the MTN has accepted that they committed the offense and has apologized, and they are looking for leniency, we the governors forum decided to support the NCC to abide by the laws of the land and the laws of our land do not not give leniency to deliberate offense to our nation.”
Author: Joel Pereyi is an award-winning essayist and writer. He has a background in oil and gas with several published energy-related articles in local and international publications to his credit. He frequently writes on energy, the economy, Africa, and politics. He is also a syndicated essayist for a handful publications in Nigeria.
Addition from Femi D Amele