Industry News

“MTN Group Ltd.’s biggest market is now its worst headache.”

Last week, Nigeria’s telecommunications regulator, the Nigerian Communications Commission (NCC), handed a USD 5.2 billion fine to mobile network operator (MNO) giant MTN. According to NCC, the fine is based around MTN’s failure to disconnect customers with unregistered SIM cards and for having incomplete customer data. MTN is Africa’s largest MNO and the fine was handed down by the government of the continent’s top economy – wiping almost 20% of MTN’s market value in the space of four days.

The size of the fine is as notable as the reason for it. It is more than double MTN’s estimated net income for 2015, it exceeds the USD 3.9 billion that MTN made in Nigeria in 2014, and equates to ~37% of total revenue. The following chart, from the linked article below, highlights how to fine stacks up to other comparable sums:

http://www.bloomberg.com/news/articles/2015-11-02/four-charts-that-show-why-mtn-s-nigerian-fine-matters-so-much

Source: Bloomberg

Though many view the penalty as harsh – akin to receiving the penalty for parking in a reserved parking spot, according to one on Twitter – the message from NCC is perfectly clear: we are in complete control of Nigeria’s telecommunications ecosystem and no one’s exempt from following the rules.

The strong line from the NCC aligns with the commonly held perception that Nigeria’s mobile money regulators have often been criticized for a perceived overbearing on the ecosystem – especially when compared directly with Kenya’s more laissez faire approach. This recent fine will only strengthen that perception and force all actors within the ecosystem to toe the line very carefully.

Read the story here: http://www.bloomberg.com/news/articles/2015-11-02/four-charts-that-show-why-mtn-s-nigerian-fine-matters-so-much

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