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Make or break time for MTN

Africa , 03 Dec 2015

Make or break time for MTN

The hefty fine slammed on South African company MTN by the Nigerian government through the Nigerian Communications Commission (NCC) is expected to be discussed when President Muhammadu Buhari of Nigeria and President Jacob Zuma of South Africa meet later this week at the Sandton Convention Centre in Johannesburg.

Speculation is that the fine will be discussed on the sidelines of the Forum of China-Africa Co-operation, scheduled for 4 and 5 December in Johahnesburg.

The issue has impacted on the mobile operator - CEO Sifiso Dabengwa recently stepped down and the MTN Group share price has taken a knock.

The NCC had originally imposed a fine of US$5.2 billion (N1,040,000,000,000 (One Trillion, Forty Billion Naira) for the late disconnection of 5.1 million MTN Nigerian subscribers in August and September 2015.

According to a statement issued by the MTN Group on 3 December, the NCC has since reduced the amount of the fine to N674bn (approximately US$3.4bn).

The West African country's Communications Minister, Adebayo Shittu has confirmed that the matter would be left to President Buhari to decide upon, this after the network requested leniency.

Speaking to ITWeb Africa on their expectations regarding the meeting between Buhari and Zuma, stakeholders in the industry said the resolutions reached at the meeting would either make or break MTN.

"The two presidents know the fate of Africa's biggest telecoms company would be sealed by the outcome of their meeting. For Buhari, it could his first major economically important diplomatic decision to make considering MTN's massive investment in the telecoms space in Nigeria. Even though Nigeria has the bigger hand in this discussion, its tech space may suffer a lot if it compels MTN to pay the hefty fine," said Dapo Daramola, a university lecturer and telecoms expert.

However international relations expert Bimpe Awoyemi believes the long history of Nigeria's harmonious diplomatic relationship with South Africa would come into play when the two leaders meet.

"The Zuma-led government is largely supportive of President Buhari's government. Zuma was at Buhari's inauguration, he ensured the Nigerian candidate for the post of the president of African Development Bank (AfDB) emerged winner, and he helped in exposing the illegal arms purchase deal involving high ranking members of the former government in Nigeria. So I will say he may be able to cash in these former great stuffs he has done for Nigeria to get a soft landing for MTN," she said.

A soft landing for MTN is something that many telecoms subscribers in Nigeria are afraid of ... Ojo Feyikemi is one of them.

According to Feyikemi, MTN needs to be compelled to pay the fine in order to curb its excesses and to serve as deterrence to other operators who may attempt to take the regulator for granted.

"If Buhari agrees to a small fine for MTN, other networks may want to also take the NCC for granted because they know all they have to do to get forgiveness is to arrange a meeting between their president and Buhari and all will be well. Make MTN pay and no operator would dare to disobey NCC when it issues directives," she said.

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