N1.04tn Fine: MTN Apologises, Seeks Leniency

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We did not renew licence, NCC insists

Following the N1.04 trillion fine imposed on MTN Nigeria by the telecoms industry regulator, the Nigerian Communications Commission (NCC), for violating its directive on SIM card deactivation, it appears the telecoms company is already seeking pardon.

Reuters reported that two sources had informed it that the cell phone operator had written a letter to Nigerian authorities asking for leniency.

MTN was fined $5.2 billion (N1.04 trillion) for not deactivating unregistered SIM cards from its network.

Giving details of the fine, NCC said the commission had consistently engaged Mobile Network Operators, (MNOs) to strictly adhere to the regulations and its business rules in the registration of their subscribers.

But despite all of these several engagements, the commission confirmed various cases of violations of the regulations and sanctioned appropriately.
Consistent with the commission’s mandate and its regulatory process, the commission monitored MNOs compliance with the above regulations and in 2012, observed irregularities in the registration process.

Given the recent security concerns in the country, government held several meetings with MNOs on the need to ensure only properly registered SIM cards are active on their networks, NCC said.

On August 4, 2015, another high level meeting was held with the MNOs. Consequent upon which earlier directives were reinforced with a deadline to deactivate all invalid/improperly registered SIM cards within seven days ending August 11, 2015.

Three days after the deadline, the commission carried out a compliance audit of all the MNOs from 14th to 18th August, 2015.

The outcome of the audit showed that while all other MNOs complied substantially with the directive to deactivate improperly registered SIM xards, MTN showed no sign of compliance at all.

Meanwhile, contrary to information released by the telecoms company that the NCC has approved the renewal, and consequent extension of the tenure of MTN’s operating spectrum in the 900MHz and 1800MHz frequency bands, the NCC, in a statement, said it did not renew the Digital Mobile Licence (DML) of telecoms operators (telcos).

According to NCC, the commission had earlier this year, decided that the DML issuance be disconnected, and subsumed under the Unified Service Access Licence (USAL), which it granted MTN and Airtel in 2006, since USAL licence is a more relevant licence, with plans to harmonise both licences.

NCC insisted that what the telecoms operators got was extension of their USAL licence by additional five years, from the initial 10 years period, which will now expire in 2021.

NCC said in 2006, MTN along with other licencees, was granted UASL for a period of 10 years, commencing from September 1, 2006, to August 31, 2016.

NCC further explained that in 2007, when MTN won the 2GHz spectrum licence, the commission, extended the UASL licence by another five years for both MTN and Airtel and asked them to pay for the extension fee, which was paid in 2007. According to NCC, payment for extension of operational licence cannot be the same with licence renewal and that it did not renew the licence of any telecoms operator.

But according to a statement from MTN, NCC has approved the renewal, and consequent extension of the tenure of MTN’s operating spectrum in the 900MHz and 1800MHz frequency bands. With this renewal and extension, MTN’s operating spectrum which was issued along with the Digital Mobile License (DML) in 2001, with an original expiry date of August 31, 2016, has now been extended to 31stAugust, 2021.

The statement further read: The licence extension notification was contained in a letter dated November 2, 2015, and signed by the acting Executive Vice-Chairman of the NCC, Prof. Umaru Dambatta.

According to the letter: “MTN will, however, be required to pay the sum of $94,225,152.75 as Spectrum fee for the 5 year extension period.”

It added that in February 2001, pursuant to one of the most transparent mobile license auctions in the world, the NCC issued DML to three pioneer mobile operators. The licences were bundled with spectrum in the 900MHz and 1800MHz frequency bands. Among other authorisations, MTN also holds a Unified Access License and a 3G Spectrum License through which it provides a full bouquet of digital services to its esteemed customers throughout Nigeria.

Corporate Services Executive of MTN, Mr. Akinwale Goodluck, said: “We view this extension as a demonstration of confidence in MTN’s capacity to continue to provide ground-breaking and innovative services to its customers, and another milestone in the evolution of the Nigerian communications industry.”

Responding to MTN’s claim, NCC, in a statement, said: The DML won by MTN in 2001 was for a period of 15 years, commencing from 9/2/2016, subject to automatic renewal as provided for in paragraph 3 and 4 of the DML licence condition.

The NCC statement further said that MTN along with other licencees, was granted Unified Access Service Licence (UASL) for a period of ten years, commencing from 1/9/2006 to 31/8/2016.

In 2007, when MTN won the 2GHz spectrum licence, the Commission, based on the Information Memorandum, requested MTN to pay for the extension of its UASL licence. Records available in NCC Finance Department, show that MTN paid for extension of the licence in 2007, from 10 years to 15 years.

Early this year, in compliance with the condition with the DML licence on renewal, MTN, along with other licencees, applied for the renewal of the DML licence, which expires on 8th February, 2016.

After due consideration, by the commission, it was decided that the DML issuance will be disconnected, as it has been subsumed under the USAL. However, the tenure of the spectrum licence being used for this service, 900MHz and 1800MHz, would be harmonised to run concurrently with the UASL for administrative convenience.

The commission, by a letter dated 27th July, 2015, had asked MTN to pay for the extension of the spectrum till 31st of August, 2015, the statement said, adding that MTN has to pay spectrum fees till 2021, instead of 2016.

Source: ThisDay