Communication
$5.2Bn fine: MTN may sack Nigerian management
LAGOS-THERE are high Indications that the MTN Group may this week call for the resignation of some management staff of its Nigerian subsidiary over the N1.04tn ($5.2bn) fine imposed on it by the industry regulator.
Credible sources involved in the matter confided in our correspondent on Monday that the company, having reached advanced negotiations with the Nigerian Communications Commission about reducing the fine, had taken a decision to sack the management team of the company.
The Corporate Executive, MTN Nigeria, Mr. Wale Goodluck, declined comments on the matter, saying, “Kindly reach out to Funso Aina (Head of Public Relations) on that.”
“We cannot officially speak or issue a statement on this matter except on the directive of the MTN Group (South Africa). However, it has become pertinent to state here that we are on the brink of resolving the matter with the NCC as regards the fine,” Aina simply said.
Mr. Sifiso Dabengwa had earlier in the day resigned as MTN Group President and Chief Executive Officer after taking responsibility for the penalty.
His resignation letter read in part, “Due to the most unfortunate prevailing circumstances occurring at MTN Nigeria, I, in the interest of the company and its shareholders, have tendered my resignation with immediate effect.”
The sources said that a reversal in earlier losses of the company’s shares on Monday was an indication that the NCC might have finally reached a truce with MTN.
According to them, MTN will probably get a lower fine, which was imposed after the company failed to meet a deadline to disconnect 5.1 million unregistered subscribers, but they did not state by how much the regulator was willing to cut the penalty.
MTN shares reversed earlier losses to gain 1.6 per cent to R160.01 as of 11:49 am on Monday in Johannesburg, giving the company a market value of R296bn ($21bn).
The MTN Group said in a statement, “Stakeholders are reminded that MTN will continue to inform them of any material engagements with the Nigerian authorities via the stock exchange news service of the JSE (Johannesburg Stock Exchange) Limited.
“Shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made.”
The group has appointed Phuthuma Nhleko as the executive chairman in a temporary capacity.
Nhleko, the non-executive chairman before now, agreed to act as executive chairman for a maximum period of six months, while the company identifies a successor for Dabengwa.
He said on Monday that he would lead further conversations with the NCC.
Nhleko said, “I will assume responsibility as executive chairman for the next six months as I proactively deal with the Nigerian regulator and will continue to work with them in addressing the issues around unregistered subscribers as a matter of urgency.
“Together with the MTN Board, my second priority will be to find an appropriate chief executive officer to take MTN forward. I will then revert to my non-executive chairman role.”
When approached, the spokesperson for the NCC, Tony Ojobo, declined to comment.
In a significant market projection, Mordor Intelligence predicts that the Nigerian telecom sector is set to surge to a value of $11.43 billion by 2029.
The report anticipates a steady growth trajectory with a cumulative average growth rate (CAGR) of 4.70% between 2024 and 2029, based on the current market value of $9.09 billion.
The transformation of Nigeria’s telecom landscape, fueled by government initiatives to boost internet infrastructure and broadband connectivity, coupled with rising data consumption, 5G deployments, and innovative strategies from major telecom players, is expected to drive this substantial market expansion.
The report underscores additional factors propelling the growth of Nigeria’s telecom sector, emphasizing the surge in smartphone adoption.
the report said “Increased smartphone adoption in Nigeria has fueled the development of a dynamic digital services sector. Currently, millions of Nigerians use mobile apps, including social networking sites, e-commerce, and financial services.
“These apps could leverage smartphones’ capabilities to offer speed, convenience, and efficiency, encouraging more people to invest in smartphones.
“In addition to these expansions and collaborations, the growing adoption of digital technologies and government support in aiding the same alongside the 5G technology implementation across the country is analyzed to boost the demand for telecom towers significantly.”
“In addition to these expansions and collaborations, the growing adoption of digital technologies and government support in aiding the same alongside the 5G technology implementation across the country is analyzed to boost the demand for telecom towers significantly.”
Mordor Intelligence highlights that the flourishing e-commerce and digital service platforms in Nigeria are significant drivers behind the escalating demand for dependable telecom services in the country.
The Nigerian Communications Commission (NCC) has granted MTN’s request to partially disconnect Globacom (Glo) from its network owing to unsettled interconnect charges.
Reuben Muoka, the NCC’s Director of Public Affairs, disclosed this in a document named ‘Pre-Disconnection Notice’ on Monday.
The move follows Glo’s persistent failure to clear its outstanding debts despite multiple attempts to resolve the issue.
Under this partial disconnection, Globacom subscribers will solely receive calls from MTN users, while retaining access to other network services like outgoing calls to other networks and data services.
However, they won’t be able to initiate calls to MTN users during this period.
The statement read, “All subscribers are, therefore requested to take notice that the Commission has approved the Partial Disconnection of Globacom to MTN in accordance with Section 100 of the Nigerian Communications Act, 2003 and Paragraph 9 of the Guidelines on Procedure for Granting Approval to Disconnect Telecommunications Operators, 2012.
“At the expiration of 10 days from January 8, 2024, subscribers of Globacom will no longer be able to make calls to MTN but will be able to receive calls.
“The Partial Disconnection, however, will allow in-bound calls to the Globacom network,” it added
Nigerian telecommunication users, along with others within the country, expended a total of N3.33 trillion on various telecom services such as calls, data, SMS, and more throughout 2022, according to the Nigerian Communications Commission (NCC).
This information comes from the recently published ‘2022 Subscriber/Network Data Annual Report’ by the NCC, which also revealed that telecom companies generated N3.33 trillion in overall revenue for that year.
The report further highlights a noteworthy growth of active voice subscriptions, rising from 195,463,898 subscriptions in 2021 to 222,571,568 by December 2022, marking a 13.86% year-on-year increase.
Commenting on the increase, it said, “The increase in the Operators’ subscriber base was attributed to a number of reasons which includes subscriber loyalty, promos, seasonal effects, aggressive consumer acquisition drive, and competitive product offerings across all the networks.”
It noted that the growth in active subscriptions impacted positively on other derived telecom indicators such as teledensity, Internet penetration as well as broadband penetration.
Data usage also continued its surge in 2022. It increased by 46.77 per cent to 518,381.78TB as of the end of the year.
The NCC stated, “There was an increase in the volume of data consumed at the year-end December 2022 when compared with the year-end December 2021.
“The total volume of data consumed by subscribers increased to 518,381.78TB as of December 2022 from 353,118.89TB as of December 2021. This represents an increase of 46.77 per cent in data consumption within the period.”
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