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Tips On How MTN Can Survive The NCC Fine - Business - Nairaland

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Tips On How MTN Can Survive The NCC Fine by Nobody: 3:05pm On Nov 02, 2015
On 26th October 2015, MTN Group was fined $5.24 billion (N1.4trillion) by the Nigerian Communications Commission (NCC) for failing to disconnect non-registered SIM cards. In light of this recent decision, I hereby recommend the following on how they can survive the impact of this decision.

A. Shareholders:

Shareholders should approve the payment of the $5.2bn before the due date. Changes in Shareholding structure is imminent and no delays is expected from the Group in this regard.The top echelon of the organisation should be re-organised starting with its management.

B. Topline:

The business topline for the remainder of the financial year i.e 1 November 2015 - 31 March 2016 should be revised. No doubt, subscribers would leave the network and earnings would drop significantly especially voice. Therefore profit and loss account should be revised to include the periods when the sanction becomes effective in this case since 2012.

C. Cost of Sales:

This would remain as there are already commitments with service providers based on scheduled plan. There is no need to revise the factors in profit and loss sheet.

D. Cost of Labour:

Management should as a matter of fact begin the process of reviewing contract costs with expatriates, already, there is an exchange rate hit (20%), a function of the devalued currency early in the year is significant cost to the company in the course of the financial year. An option to locate other expatriates in Asia is due e.g India, China and Indonesia. These professionals can be hired on need basis and terms of employment clearly chalked out.

An important note is that other outsourcing agencies can be engaged to commence the process of providing comparative and lower service cost from next financial year i.e 1 April 2016 - 31 March 2017.

Local employees can be committed to contract with non-key positions placed on secondment. No need to downsize.

E. Cost of Marketing:

-Local budget for marketing should be adopted. BTL (below the line) option most recommended.
-Highly capitalised marketing should be banned for next 5 years i.e post Year 2020
-Aggressive marketing in hinterland to be promoted.
-Discount on data and bundle opportunity should be created.
-Discount on voice should be created for youth and group target. New target should be created in this segment.

F. Cost of Finance:

Of course, the burden of settling NCC fine requires a huge cashflow. A phased payment/settlement is recommended. MTN Nigeria should enter into a phased settlement plan with NCC. A letter of comfort stating how and when this payment would be made should be made in line with Shareholders approval.

- cashflow concerns: as a result of the expected massive exit by subscribers in the short term, there might be deficit in cashflow of the local business. Therefore, a massive inflow of capital is now required. This can be achieved through local banks with a consortium likely to create the balance needed. Another option is find another partner in form of shareholder.

- finance cost: with the current interest rate of 16%-18% from local banks, an additional terminal loan would lead to increased liabilities and exposure to banks.

G. Partnership: Business to provide opportunity for corporate partnerships in the form of sell-off of non-performing part of the business. A proposal to sell its data arm and concentrate on voice would be a great idea.

In conclusion, communication is key for the business in Nigeria. Shareholders should address the public directly in the case of regulators, customers, public (internal and external) regularly. There is no need to apologise but rather provide action plans on how to keep the business going and to overcome the existing challenges in the country.

In the face of a new management and focus, the company can turnaround this enormous challenge in the next three to four years and bounce back in winning ways.

9 Likes 1 Share

Re: Tips On How MTN Can Survive The NCC Fine by Nicolars(m): 3:07pm On Nov 02, 2015
Op. I tynk u suld b telling MTN this and not us

12 Likes

Re: Tips On How MTN Can Survive The NCC Fine by tochinoyi(m): 3:08pm On Nov 02, 2015
Keneking:
On 26th October 2015, MTN Group was fined $5.24 billion (N1.4trillion) by the Nigerian Communications Commission (NCC) for failing to disconnect non-registered SIM cards. In light of this recent decision, I hereby recommend the following on how they can survive the impact of this decision.

A. Shareholders:

Shareholders should approve the payment of the $5.2bn before the due date. Changes in Shareholding structure is imminent and no delays is expected from the Group in this regard.The top echelon of the organisation should be re-organised starting with its management.

B. Topline:

The business topline for the remainder of the financial year i.e 1 November 2015 - 31 March 2016 should be revised. No doubt, subscribers would leave the network and earnings would drop significantly especially voice. Therefore profit and loss account should be revised to include the periods when the sanction becomes effective in this case since 2012.

C. Cost of Sales:

This would remain as there are already commitments with service providers based on scheduled plan. There is no need to revise the factors in profit and loss sheet.

D. Cost of Labour:

Management should as a matter of fact begin the process of reviewing contract costs with expatriates, already, there is an exchange rate hit (20%), a function of the devalued currency early in the year is significant cost to the company in the course of the financial year. An option to locate other expatriates in Asia is due e.g India, China and Indonesia. These professionals can be hired on need basis and terms of employment clearly chalked out.

An important note is that other outsourcing agencies can be engaged to commence the process of providing comparative and lower service cost from next financial year i.e 1 April 2016 - 31 March 2017.

Local employees can be committed to contract with non-key positions placed on secondment. No need to downsize.

E. Cost of Marketing:

-Local budget for marketing should be adopted. BTL (below the line) option most recommended.
-Highly capitalised marketing should be banned for next 5 years i.e post Year 2020
-Aggressive marketing in hinterland to be promoted.
-Discount on data and bundle opportunity should be created.
-Discount on voice should be created for youth and group target. New target should be created in this segment.

F. Cost of Finance:

Of course, the burden of settling NCC fine requires a huge cashflow. A phased payment/settlement is recommended. MTN Nigeria should enter into a phased settlement plan with NCC. A letter of comfort stating how and when this payment would be made should be made in line with Shareholders approval.

- cashflow concerns: as a result of the expected massive exit by subscribers in the short term, there might be deficit in cashflow of the local business. Therefore, a massive inflow of capital is now required. This can be achieved through local banks with a consortium likely to create the balance needed. Another option is find another partner in form of shareholder.

- finance cost: with the current interest rate of 16%-18% from local banks, an additional terminal loan would lead to increased liabilities and exposure to banks.

G. Partnership: Business to provide opportunity for corporate partnerships in the form of sell-off of non-performing part of the business. A proposal to sell its data arm and concentrate on voice would be a great idea.

In conclusion, communication is key for the business in Nigeria. Shareholders should address the public directly in the case of regulators, customers, public (internal and external) regularly. There is no need to apologise but rather provide action plans on how to keep the business going and to overcome the existing challenges in the country.

In the face of a new management and focus, the company can turnaround this enormous challenge in the next three to four years and bounce back in winning ways.
let's see how it will end

1 Like

Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:21am On Nov 09, 2015
Op should be arrested for conspiracy. You are a partner in crime. MTN will not survive. NEVER. They have milked us...now, let's start milking them. This money follow for next year's budget of N8.4 trillion oooo....make I tell u. They must pay!!!!!

2 Likes

Re: Tips On How MTN Can Survive The NCC Fine by Richie0974: 9:21am On Nov 09, 2015
Op, are you (A) a shareholder, (B) a south African, (C) an MTN staff and (D) none of the above? undecided

7 Likes

Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:21am On Nov 09, 2015
No comment....space for sale.
I'm searching for my Airtel sim oh.
Re: Tips On How MTN Can Survive The NCC Fine by EasyConsult: 9:21am On Nov 09, 2015
eziokwu
Re: Tips On How MTN Can Survive The NCC Fine by macaranta(m): 9:22am On Nov 09, 2015
MTN will be greatly affected by this fine ,no doubt ,but OP most of your methods are not feasible or just complex.The staggered payment spread over say 100 years...MTN will be happy with thatgrin

1 Like

Re: Tips On How MTN Can Survive The NCC Fine by kindnyce(m): 9:22am On Nov 09, 2015
THEY CANNOT ESCAPE GTHE FINE,NO MATTER HOW HARD THEY TRIED

DAYS OF IMPUNITY IS OVER
Re: Tips On How MTN Can Survive The NCC Fine by sule17(m): 9:22am On Nov 09, 2015
Abeg what is the time?
Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:22am On Nov 09, 2015
lalasticlala ohhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh grin grin grin

Great decision
Re: Tips On How MTN Can Survive The NCC Fine by missKiffy(f): 9:23am On Nov 09, 2015
Let them go and pay, simple
Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:23am On Nov 09, 2015
Itan niyen o! angry

It they like, they can employ the business-survival strategies of
Harvard Business School. As long as the fine is being paid without
exploiting their consumers.

***Every Day For The Thief***

3 Likes

Re: Tips On How MTN Can Survive The NCC Fine by Mutuwa(m): 9:23am On Nov 09, 2015
sule17:
Abeg what is the time?

12 midnight. grin

MTN came to Nigeria at a time when nobody wanted to invest in Nigeria, at a time when Nigerians did not have phones. Even Zenith Bank refused to loan MTN cash to operate, UBA rejected MTN's offer but today see the difference.

What about Cowbell? When they came to Nigeria, they made milk in a sachet,Peak was laughing at them - they said Cowbell was milk for the poor but they were right! 3-million poor people could afford N10 a day for a sachet of milk.Oya, do the math - 3 million people buying milk at N10.00- that was N30 million every single day. In a month they grossed N900 million (almost N1billion).

Even Peak had to make sachet milk in order to survive in the market. So what have people told you? What have they said you cannot do, or you do not qualify for, or you do not have experience for?

They told Cowbell, they told MTN, but today the story has changed. I have a feeling something is changing for you today!

They will change their strategies just to keep in step with you.

Don't listen to what people are saying or what life is showing you.YES, YOU CAN.

Success is not about where you graduated from, or what grade you graduated with, but what graduates out of you. Keep the spirit UP..

BE INSPIRED GREAT PEOPLE

~Babangida Ruma~

37 Likes 1 Share

Re: Tips On How MTN Can Survive The NCC Fine by estherdim: 9:23am On Nov 09, 2015
i don hear

Get All type of Timberland Boot, Nike, Adidas, Emporio Armani, Casio Edifice, Smart watches Et all, visit link at signature below
Re: Tips On How MTN Can Survive The NCC Fine by Princenovo(m): 9:23am On Nov 09, 2015
Mtn is heading to relegation in it's own way. Before they bounce back others will take over except they come and seek first hand advice from me.
Re: Tips On How MTN Can Survive The NCC Fine by Louislewis: 9:24am On Nov 09, 2015
[size=22pt]MTN don dey thiefam already from Truetalk consumers. From 11kb per second to 20kb per second.[/size]

1 Like

Re: Tips On How MTN Can Survive The NCC Fine by bettercreature(m): 9:24am On Nov 09, 2015
That fine is too much,even world richest banks that manipulated and rigged currency trading did not pay up to $5billion as fine
MTN must not pay this money its just TOO MUCH,they can not even afford it tho
Re: Tips On How MTN Can Survive The NCC Fine by Smartjeezy(m): 9:25am On Nov 09, 2015
Super story...

1 Like

Re: Tips On How MTN Can Survive The NCC Fine by lekjons(m): 9:25am On Nov 09, 2015
instead for them to do 1gb/1day @N100, the rate at which they'll gather money will be suprising..
Re: Tips On How MTN Can Survive The NCC Fine by Nnamoo77: 9:25am On Nov 09, 2015
I hear!!!
Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:26am On Nov 09, 2015
Keneking, Let's hear what lalasticlala has to say.. shocked

1 Like

Re: Tips On How MTN Can Survive The NCC Fine by deramarks(f): 9:27am On Nov 09, 2015
D only way out is if all mtn users pay 200 hundred naira each to mtn not buyin card oo just pay 200 naira. If all d mtn users do dat d money will come out because mtn sacrificed themselves for their users d users shud also appreciate dem wit just 200 naira after all mtn users re more dan any oda network users in d country mtn shud send txt msgs to dem beggin dem for 200 naira trust me dey will pay it nd forget it. Thank me later kiss
Re: Tips On How MTN Can Survive The NCC Fine by gragraboy: 9:27am On Nov 09, 2015
OP please come over to MTN headquarters & collect your employment letter

4 Likes

Re: Tips On How MTN Can Survive The NCC Fine by lolu007(m): 9:28am On Nov 09, 2015
I just pity those MTN staff. Alot of them are going to lose their jobs

1 Like

Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:29am On Nov 09, 2015
I thought osinbajo got shares in diz telecom company, they will soon be pardon, or fine slash
Re: Tips On How MTN Can Survive The NCC Fine by lekjons(m): 9:29am On Nov 09, 2015
sule17:
Abeg what is the time?
*checks time*
"12:20am"
watching match
Nigeria 0-0 Mali, this guys dey play us, abeg pray make we win oo..

1 Like

Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:30am On Nov 09, 2015
lekjons:
instead for them to do 1gb/1day @N100, the rate at which they'll gather money will be suprising..
see strategy!!!
Re: Tips On How MTN Can Survive The NCC Fine by tola9ja: 9:30am On Nov 09, 2015
[size=18pt]The simplest way is to send 500 gig to all there subscribers valid for 6months and we will protest nation wide to stop the fine simple as ABC



mtn everywhere you go even inside grave [/size]

8 Likes 2 Shares

Re: Tips On How MTN Can Survive The NCC Fine by ultrazone(m): 9:31am On Nov 09, 2015
Ok
Re: Tips On How MTN Can Survive The NCC Fine by Nobody: 9:32am On Nov 09, 2015
They should sell their Base stations! My2cents

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