NCC/MTN Reach 3-Year Payment Agreement, MTN to List on NSE

MTN Nigeria and the Nigeria Communications Commission (NCC) have allegedly reached an amicable settlement in the matter of the N1.04 Trillion fine imposed by the Regulator in October 2015 for MTN’s delay in disconnecting 5.1 Million improperly registered lines within the prescribed deadline.

Further to several weeks of negotiations between MTN, NCC and the Federal Government, the following agreed terms have been announced. MTN will pay the NCC the sum of pay N330billion over the next three years under an agreed payment tranche.

In addition to the monetary settlement, MTN Nigeria undertakes to: subscribe to the voluntary observance of the Code of Corporate Governance for the Telecommunications Industry and will ensure compulsory compliance.

The company also undertakes to take immediate steps to ensure listing of its shares on the Nigerian Stock Exchange as soon as is commercially and legally possible.

And, always ensure full compliance of its license terms and conditions as issued by the NCC.

Mr. Ferdi Moolman, MTN Nigeria CEO, was quoted in a statement by the Company on Friday afternoon quoted that, “MTN Nigeria once again offers its most sincere apologies for the series of unfortunate events that led to the imposition of the fine.” Elaborating further, he said, “It was of critical importance to reach a solution that would be of universal benefit to all stakeholders given the importance of the ICT industry in Nigeria and its tremendous impact on socio-economic growth. Along with the authorities, we believe that has been achieved.”

Regarding the company's undertaking to list, Moolman said "MTN Nigeria is undoubtedly one of Nigeria’s success stories. Broader public participation exemplifies this.”

It will be recalled that the initial fine of N1.04 Trillion was later adjusted by 25% to N780 billion. MTN Nigeria considered the fine inimical to the sustainability of its business and sought judicial determination in December 2015 to protect the extensive local ecosystem, valued and supported by MTN’s business.

However in February 2016, at the request of the Federal Government, MTN announced the withdrawal of its case against NCC and made an initial “goodwill” payment of N50 Billion in order to create a conducive atmosphere for further negotiations.

At the time, MTN Nigeria’s CEO Ferdi Moolman said, “This is another manifestation of good faith and intent by MTN Nigeria. We have the equally good intentions of the Nigerian authorities and the strength of our mutual commitment to an amicable resolution. The high priority that the Government is giving to the sustainability of the industry assures us of a truly integrated approach amongst all parties, to the growth of ICT as a critical enabler of socio economic development in Nigeria."

Commenting on the final resolution of the NCC fine, Phuthuma Nhleko, MTN Group Executive Chairman, expressed his thanks to the Federal Government of Nigeria for the spirit in which the matter was resolved saying “this is the best outcome for the company, its stakeholders, the Federal Government and the Nigerian people and the relationship between MTN, the Federal Government and the NCC has been restored and strengthened.’’

Meanwhile, a statement signed by Tony Ojobo, director, Public Affairs at NCC, shows that MTN will now pay N330billion over the next three years.

This amount, NCC said, includes the “goodwill” payment of N50Billion earlier made by MTN to the government.

“The balance of N280Billion will be made in six tranches in the following order. By the terms of agreement, MTN will pay N30Billion into NCC’s Treasury Single Account (TSA) with the Central Bank of Nigeria (CBN) 30 days from the date of the agreement dated June 10, 2016.

Other dates of payments include:  March 31, 2017- N30Billion; March 31, 2018- N55Billion; December 31, 2018- N55Billion; March 31, 2019-N55Billion and the balance will be in May 31, 2019- N55Billion.

The agreement and resolutions were signed by Executive Vice Chairman (EVC) of NCC, Prof. Umar G. Danbatta, NCC Commission Secretary, Mr. Felix Adeoye, Chief Executive of MTN, Fredinand (Fredi) Moolman and MTN’s Company Secretary, Mrs. Uto Ukpanah, and witnessed by Mr. Tony Ojobo, NCC, Director, Public Affairs; Mr. Usman Malah, Chief of Staff to the EVC, NCC; Ms Helen Obi, Assistant Director, Legal, NCC and Ms. Amina Oyagbola, Corporate Executive, MTN.

The NCC statement also indicates an agreement was reached that MTN shall undertake the followings:

“Tender an apology in line with the apology previously tendered in correspondences relating to this matter to the Government of Nigeria and Nigerians within the one month of the execution of this Agreement;

“Subscribe to the voluntary observance of the Code of Corporate Governance for the Telecoms Industry and would ensure compulsory compliance when the said Code is made mandatory for the telecommunications industry; and

“Undertake to take immediate steps to ensure the listing of its shares on the Nigerian Stock Exchange as soon as commercially and legally possible after the date of execution of this Settlement Agreement.

Both parties agreed that these terms of settlement cannot be altered, varied, annulled or modified in any respect, except by writing duly executed by both parties; and the terms of settlement constitute all the terms and conditions of the settlement and supersede and replace any previous offers, representations and terms.

It will be recalled that the NCC on October 20, 2015, imposed a fine of N1.04Trillion on MTN for infraction of the provisions of the Nigerian Communication Commission (Registration of the telephone subscribers) Regulations, 2011; for failure to disconnect 5.1million improperly registered lines within the prescribed deadline.

In arriving at the agreement, the EVC said our decision was taken based on professionalism and global best practices, and in line with the NCC core value “to be fair, firm and forthright”

According to the EVC, the Commission has always carried industry and stakeholders along in taking transparent regulatory actions, adding that at no point will the regulator do anything to jeopardise the business health of the entire sector.

“We were careful not to take decisions that were likely to cripple the business interest of the operators we regulate.  Besides, the downturn of the global economy is biting hard on everybody and every sector, so we must therefore be sensitive and flexible in our decisions”

This perhaps is one of the attractions of the global communities to the activities of the Commission through multiple awards recently.

A week ago, the NCC got the European Award for Best Practices by the European Society for Quality Research (ESQR) based in Switzerland.  The award ceremony involved over 63 Countries and global business giants like United Air-lines, Cathay Pacific airlines amongst others took place in Brussels, Belgium.

Only two weeks ago, the NCC was named Africa Regulator of the year in Accra, Ghana.

“Africa and global communication investors are excited about the Nigerian telecommunication environment and have made Nigeria investors first choice”, Danbatta explained.