MTN’s Final Payment: A Demonstration of
Commitment to Sustainable Investment in Nigeria
"Commitment is an act, not a word." - Jean-Paul Sartre
Fifteen years ago,
in January of 2001, the house of “Y’ello!” paid $285 million for one of four
GSM licenses to operate in Nigeria. This was an investment decision predicated
on the growth potential of the Nigerian economy. An investment of that
magnitude, amounting to over N103 billion in today’s Naira, was a seismic
statement of faith in doing business in Nigeria by MTN.
Over the years since that bold decision by Africa’s largest mobile
operator to break new ground in Africa’s largest economy, the relationship has
broadened in the form of more positive acts of intent to expand growth that the
Nigerian populace has benefitted from. Take for instance, the MTN Foundation.
Established in 2004 as part of its Corporate Social Responsibility plan, the
company set up three portfolios of focus in the areas of Health, Education, and
Economic empowerment. This was part of a wider strategy to reduce poverty and
contribute towards sustainable development in the Nation
"Without commitment, you cannot have depth
in anything, whether it's a relationship, a business or a hobby." - Neil Strauss
The roots of the
depth of MTN’s quest for sustainable investment extends beyond the Nigerian public
sector into the private sector. In March of this year, Africa Internet Group, a
Nigerian e-commerce company, announced it has received funding to the tune of
$245 million (N89 billion) from investors that included MTN and U.S Investment
Bank Goldman Sachs. MTN recognizes the need to invest in the expansion of
e-commerce in Nigeria because of the impact on jobs and the economy at large.
But even the most
noble amongst us has the occasional lapse. Even the most well intentioned can make a misstep. Eight months
ago, in October of 2015, the Nigerian Communications Commission levied a $5.2
billion (N1.04 trillion) fine against MTN for failing to disconnect subscribers
with incomplete SIM cards. In an effort to curb Terrorism and Kidnappings,
among other crimes, the Federal Govt required all registered lines to have
updated SIMS. This exercise was in line with Section 20(1) of Registration of Telephone
Subscribers Regulations (TSR) 2011 which stated:
"Any licensee who activates or fails to
deactivate a subscription medium in violation of any provision of these
Regulations is liable to a penalty of N200,000.00 (Two Hundred Thousand Naira) for each unregistered but
activated subscription medium."
As a follow up to
this regulation, a compliance audit of all Mobile operators in the country was
carried out in August of 2015 by the NCC. The audit
discovered that 5.2 million subscribers were not properly registered by MTN.
Multiplying by the fine per subscriber gives us the gargantuan N1.04 trillion
($5.2 billion) figure. In line with its high standards of Corporate Governance,
MTN owned up to its culpability and commenced negotiations with the NCC to
reduce the fine. A N50 billion payment was made by the company in February 2016 in
good faith towards a settlement.
Taking a macro view of MTN’s growth impact on
the Telecoms sector, jobs, and Nigeria’s GDP, the Federal Govt decided to
reduce the fine from N1.04 trillion to N330 billion, payable over the next
three years. As a possible condition of the settlement, MTN might even list on
the Nigerian Stock Exchange, thereby allowing shareholders to partake in profit
sharing in the form of dividends. A win-win scenario for the country and the
company. Speaking to reporters in Abuja, the Minister of Communications, Adebayo Shittu,
explained that the reduction of the fine was in the best interest of the
economy:
"We need private sector to thrive just as
they need us to thrive. We, in government, do not want to kill any business.
All the decisions that have been taken on the MTN issue are on the best
interest of Nigeria and Nigerians."
So a prudent
decision by the Government ensured that all’s well that ends well. MTN learned
from its mistake, made yet another financial contribution to Nigeria (which
will go a long way during this tough economic cycle where the nation’s revenues
have been greatly reduced by the fall in oil prices), and was met halfway by a
government that recognizes its stellar contributions to a better Nigeria over
the past 15 years. We as Nigerians are better off for it.
"We have to recognize that there cannot be relationships unless there is commitment, unless there
is loyalty, unless there is love, patience, persistence." - Cornel West
