It is impossible for MTN Nigeria to pay the N1.04 trillion fine it incurred from the Nigerian Communications Commission (NCC) for alleged breach of SIM registration rules, TheCable has been told.

On Monday, Umar Danbatta, chief executive officer of NCC, approved punitive sanctions totalling N1.04 trillion ($5.2bn) against MTN Nigeria for SIM registration breach.

The sanction, which is the largest in Nigeria’s telecoms history, immediately affected the MTN group, as the company experienced a drastic decline in its stock, falling by over 12 percent in one day – the largest decline in 17 years.

MTN stock closed the day on Johannesburg Stock Exchange (JSE) at 167 Rand, its lowest closing price since June 2013, a feat which continued on Tuesday extending the stock fall to nearly 16 percent .

Speaking with TheCable, an expert in the telecoms industry revealed that it would be literally impossible for MTN, valued at $23 billion in 22 countries, to pay such a fine based on its annual revenue generation.

“The fine is definitely going to affect MTN. It is going to shake investors’ confidence in the business,” he told TheCable, asking not to be named.

“If you have a business that has less than a trillion naira, about N800bn as total revenue, and you’re fining them N1.4tr, that means there’s no profit in that business.

“It is really, really impossible for them to pay that kind of fine. If I were an investor in that business, I would sell my position. I would exit the business. You would have seen that their share price off the JSE fell by over 12 percent.” On the breakdown of the fine, which translates to N200,000 for each unregistered SIM, the expert said the regulatory body acted well by imposing the sanction, but added that it was not commensurate with the offence.

“I do not think the NCC has overreacted, but I think the fine is grotesque. It’s unusual, it’s abnormal, you can’t explain it, and it’s clownish. This is not politics, this is business.

“Yes, placing sanction is in order; the fine is meant to be commensurate with the offence. If you are accusing them of not deactivating 5.1 million unregistered subscribers, in how many years will those five million subscribers give them N1trn, in terms of revenue and profit?

“What is the cost per user for those five million people? What is the profit and revenue they would have made from those five million – profile them and then calculate how to fine them.”

The case against MTN, the largest telecoms company in Nigeria, was further strengthened by NCC’s position that the telco was undermining the efforts of the Nigerian government in tackling insurgency and other security challenges.

Experts across the continent are also of the opinion that the fine is huge for MTN, and would not just affect the firm but also the Nigerian economy if MTN decides to pull out of the country. James Faircliff, a money manager at Tower Capital Management in Johannesburg, had said earlier that events like this affect doing business in emerging markets and makes investors uncomfortable.

“Events like this, even if the final outcome, is a lesser fine, still highlight the unmanageable risk of doing business in highly regulated industries in emerging markets,” he told Bloomberg. “We feel that uncomfortable relations with the Nigerian regulator could pose added risk to the pending license renewals in that country.”

MTN Nigeria, which controls 43 percent of Nigeria’s subscriber base, has been given till November 16 to pay up the fine. Diplomatic ties between Nigeria and South Africa are also said to be suspect, following sanctions on South African businesses in Nigeria. Stanbic IBTC, a subsidiary of South Africa’s Standard Bank, was sanctioned by the Financial Reporting Council on the same day MTN was fined by the NCC.

MTN is in talks with the NCC to review the fine.

Read more at: https://www.thecable.ng/impossible-mtn-cannot-pay-n1-4trn-ncc-fine

It is very irritating the MTN who has about 80% of its staff strength either outsourced or contracted wi srill be beating chest in myndear country. Something decisive have to be done to curtail the excessiveness of this company....

There was a time they were asked to refund some amount to subscribers for poor services....instead they sent out the refund by credititting each line and sending messages that it was as a reward for being a customer.

NCC really needs to checkmate this southafricans coming to our country to reap us ....and still deliver poor services

lalasticlala

Thunder strike both NCC and MTN,

Make NCC no reduce am ooo.

All my airtym MTN don thief, if I put am for fixed deposit e go don equal that fine amount..

Say no to Reduction..

Signed;
MTN victims Forum..

MTN deserves to be fined! Imagine leaving gaps of 5.1million potential and actual terrorists to perpetuate their actions. More worrisome is the fact that they had been warned and they disregarded regulatory warning.

Psylas:
Thunder strike both NCC and MTN,

How does that help?

That's wickedness by NCC. Do they want MTN out of business? Haba!

koboko69:
It is very irritating the MTN who has about 80% of its staff strength either outsourced or contracted wi srill be beating chest in myndear country. Something decisive have to be done to curtail the excessiveness of this company....

There was a time they were asked to refund some amount to subscribers for poor services....instead they sent out the refund by credititting each line and sending messages that it was as a reward for being a customer.

NCC really needs to checkmate this southafricans coming to our country to reap us ....and still deliver poor services

lolz so in your own way of thinking you want us to follow you yrrooba own glo abi?impossible.

Where d money dey

menix:
Make NCC no reduce am ooo.

All my airtym MTN don thief, if I put am for fixed deposit e go don equal that fine amount..

Say no to Reduction..

Signed;
MTN victims Forum..

They gotta pay that fine for breeching of contract clause. They been milking us dry for over a decade. They must pay.

Energito:
lolz so in your own way of thinking you want us to follow you yrrooba own glo abi?impossible.

Daft sensless people have really infiltrated this NL. Imagine this fool spining this in a tribal direction

You are one of the problems of the SE. imagine ur stupidity.....you will rather support MTN the ripper....than am indigenous company brought some sanity to the telecoms industry just because of your senseless tribal bigotry.

1. Glo started per sec billing when mtn and the likes said it was not possible

2. Glo started the 1k bis when other telecoms were still ripping

3. Glo as always been the first to slash call tarrifs.

4. Glo is the reason why there is so much competition in data sales today.

5. Glo as helped so much Nigeirans...from celebrities to oridinary Nigerians. According to Basket mouth...if u receive an alert from glo for being an Ambassador. ...your life have changed.

Lots more


For the records....I am from the ND. Grow up from your folly.

Yrroba want MTN out of business so that every body will start using glo

Well they got 2 options. Either pay or close down MTN.
Any act of incompetency and negligence will not be tolerated.

Mr man i will rather use MTN than to use glo.i don't care about if glo is cheaper or not.and mind you i am not from south east.

koboko69:


Daft sensless people have really infiltrated this NL. Imagine this fool spining this in a tribal direction

You are one of the problems of the SE. imagine ur stupidity.....you will rather support MTN the ripper....than am indigenous company brought some sanity to the telecoms industry just because of your senseless tribal bigotry.

1. Glo started per sec billing when mtn and the likes said it was not possible

2. Glo started the 1k bis when other telecoms were still ripping

3. Glo as always been the first to slash call tarrifs.

4. Glo is the reason why there is so much competition in data sales today.

5. Glo as helped so much Nigeirans...from celebrities to oridinary Nigerians. According to Basket mouth...if u receive an alert from glo for being an Ambassador. ...your life have changed.

Lots more


For the records....I am from the ND. Grow up from your folly.

Energito:
Yrroba want MTN out of business so that every body will start using glo

The problem with your likes is that you think you are doing the SE good....byt u are actually making people feel we have a lots of brainless, foolish, juveniles on the SE that lacks basic education.

Asides glo...we have Etisalat, airtel, visafone...

So where does ur sensless logic play here.

Troll....

Lolz so you want ncc to close down mtn so that everybody will star using Glo?let me make it clear to you Mtn has to stay not even yrooba idiotic glo will stop that.

trapQ:
Well they got 2 options. Either pay or close down MTN.

Any act of incompetency and negligence will not be tolerated.

Lolz what has south east got to do with my post?like i said i am not from there take that or live it.glo should take their cheaper calls to yrorrbas i don't care.Mtn has come to stay.

koboko69:


The problem with your likes is that you think you are doing the SE good....byt u are actually making people feel we have a lots of brainless, foolish, juveniles on the SE that lacks basic education.

Asides glo...we have Etisalat, airtel, visafone...

So where does ur sensless logic play here.

Troll....

They should even increase the fine, It's too small. Theifs!

this is a mobile section material

koboko69 you should have known better

seun lalasticlala obinoscopy
please move this to the right section

Energito:
lolz so in your own way of thinking you want us to follow you yrrooba own glo abi?impossible.

na ur Yeeboe own U want make we follow? Thief Oloshi Barawoo

DeviIhimself:
this is a mobile section material

koboko69 you should have known better

seun lalasticlala obinoscopy
please move this to the right section

koboko69 just run out of the bathroom now after washing Beremx pants and bra don't blame him he didn't look well he was in a haste.

ApcSucks:


koboko69 just run out of the bathroom now after washing Beremx pants and bra don't blame him he didn't look well he was in a haste.

chineke meee

Abeg why Biafrans like to just show how Foolish and Bigoted they are?? Personally i don't like glo and prefer mtn heck i have only one sim and its mtn but does that make me shout like a Demented igbo man and go pro North?? These briafrans are becoming much more idiotic by the minute. Please Buhari give them the freedom

Idris the last time i check is not by force to have Mtn line.Glo is there for you.

Idrismusty97:
They should even increase the fine, It's too small. Theifs!

Who is this one?are you foolish awo

acenazt:
na ur Yeeboe own U want make we follow? Thief Oloshi Barawoo

Another son of foolish awo.

acenazt:
Abeg why Biafrans like to just show how Foolish and Bigoted they are?? Personally i don't like glo and prefer mtn heck i have only one sim and its mtn but does that make me shout like a Demented igbo man and go pro North?? These briafrans are becoming much more idiotic by the minute. Please Buhari give them the freedom

trapQ:
Well they got 2 options. Either pay or close down MTN.

Any act of incompetency and negligence will not be tolerated.

They cannot afford to pay that ammount, if not reduced, its close shops and sell the business

ApcSucks:


koboko69 just run out of the bathroom now after washing Beremx pants and bra don't blame him he didn't look well he was in a haste.

See English construction. PDP branded brain at work!

lol. mtn is about to loose $5bn and these tribal bigots above me a cursing each other?

anyway, they deserve to be fined but its too much. wetin ncc wan use the money do sef?

koboko69:
It is very irritating the MTN who has about 80% of its staff strength either outsourced or contracted wi srill be beating chest in myndear country. Something decisive have to be done to curtail the excessiveness of this company....

There was a time they were asked to refund some amount to subscribers for poor services....instead they sent out the refund by credititting each line and sending messages that it was as a reward for being a customer.

NCC really needs to checkmate this southafricans coming to our country to reap us ....and still deliver poor services

you think they are foolish like us
why should they produce jobs for you
are they not paying taxes
what have you done with it
better stop this entitlement mindset
no body owes you natin

Eheeeen if you say were treating SA fuckup cos of the way they treated our ppl in their country Eheeeen g agree
but that they should provide jobs for you when you foolishly
forgot to put local content clause in the contract and Now want to shift the goalpost after whistle gas blown

na wa o
na real wa

mikolo80:
you think they are foolish like us
why should they produce jobs for you
are they not paying taxes
what have you done with it
better stop this entitlement mindset
no body owes you natin

Eheeeen if you say were treating SA fuckup cos of the way they treated our ppl in their country Eheeeen g agree
but that they should provide jobs for you when you foolishly
forgot to put local content clause in the contract and Now want to shift the goalpost after whistle gas blown

na wa o
na real wa

Direct your frustrations to the federal government....

You and I are handicapped about the situation