MTN fine update

MTN have released a SENS announcement this morning, saying that they have received a formal letter from the NCC and it reads as follows:

"MTN has received a formal letter dated 2 December 2015 from the NCC informing the Company that, after considering the Company's request, it has taken the decision to reduce the fine on the MTN Nigerian business from the original N1,040,000,000,000 (One Trillion, Forty Billion Naira) to N674 Billion Naira which has to be paid by 31 December 2015. The fine relates to the late disconnecting of 5.1 million MTN Nigerian subscribers in August and September 2015."

That again is not cut and dried. As the SENS points out: "The Company is carefully considering the NCC's reply, however the Executive Chairman Phuthuma Nhleko will immediately and urgently re-engage with the Nigerian Authorities before responding formally, as 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."

Before cell phones in Nigeria the fixed line infrastructure was laughable at best. I remember speaking to a Kenyan fellow who worked for a big multinational years ago, he recalls sticking in an application to get a fixed line on the day after he arrived, when his two odd year contract was up, he left and the fixed line had still not been installed. As Mark Zuckerberg pointed out yesterday, the internet really does uplift people out of poverty, equally it adds much needed jobs on the ground. Just as important, the economy diversifies away from one avenue, in this case we all know what it is.

What the NCC should really do is demand over and above the current Capex budget in Nigeria, the company should commit to a speedier ramp up of 3G tower roll out, that way the government can use the services provided by a private company to improve their fight against terrorism and corruption. Not look for stop gap measures to plug a hole in a yawning budget deficit. No. I suspect that this is not a closed book, battle hardened CEO Phuthuma Nhleko and the board have shaken up the management structure of the group, he will no doubt be working harder to look for another reduction and a more amicable resolution. We remain watchers of the situation.