Communication
Nigeria forgives South Africa, slashes MTN’s fine to N674bn as CEO quits
LAGOS-THE diplomatic row brewing between Nigeria and the republic of South Africa over the $5.2 billion fine imposed on South Africa’s telecommunications giant, MTN, seems to be simmering down as Africa’s largest economy finally agreed to a reduction of the fine to $3.4 billion.
MTN Group on Thursday said that it had received a formal letter from the Nigerian Communications Commission confirming the reduction of the N1.04tn ($5.2bn) fine imposed on its Nigerian subsidiary to N674bn ($3.4bn).
The letter, dated December 2, 2015, was a response to MTN’s initial request to NCC for a reduction in the fine.
Presidency sources also confirmed that there has been several correspondents between both countries to resolve the unfortunate development amicably.
According to the NCC response to an earlier plea for leniency by the group, the fine, which relates to the late disconnection of 5.1 million unregistered MTN Nigeria Subscriber Identification Module cards in August and September, must now be paid on or before December 31, 2015.
It also emerged on Thursday that as a consequence of the fine, the Chief Executive Officer of its Nigerian subsidiary, Mr. Michael Ikpoki, and the Head of Regulatory and Corporate Affairs, Mr. Akinwale Goodluck, stepped down from their positions.
The Chief Operating Officer of MTN Irancell, Ferdi Moolman, and Amina Oyagbola, were appointed to replace Ikpoki and Goodluck respectively.
The Executive Chairman, MTN Group, Phuthuma Nhleko, said in a statement that Ikpoki and Goodluck’s exit was part of a revised structure and strengthened leadership aimed at improving the company’s operational oversight and increase management capacity.
He said, “This will enable MTN to continue to realise its strategy and vision, while also ensuring that we achieve high governance standards and robust risk mitigation.
“As I said in my last communication to you, MTN employees are the key to the success of our organisation and I continue to appreciate your support during this period of transition. Welcome to our new joiners and congratulations to those who are in new positions.”
Nhleko had earlier said that MTN would urgently re-engage with the Nigerian authorities before responding formally to the NCC letter informing it of the cut to the fine and the new deadline for payment, adding, “It is essential for the company to follow due process to ensure the best outcome for the company, its stakeholders and the Nigerian authorities; and accordingly, all factors having a bearing on the situation will be thoroughly and carefully considered before the company arrives at a final decision.”
Nhleko subsequently advised shareholders to continue to exercise caution when dealing in the company’s securities until a further announcement is made.
The Chief of Staff to the President, Abba Kyari, had taken over negotiations with MTN officials regarding the fine from Vice President Yemi Osinbajo.
The change of guard had been informed by a conflict of interest as Osinbajo had in his assets declaration disclosed that he had shares in the leading mobile operator.
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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