Telecommunication giant, MTN Nigeria Communications Plc, has paid the last tranche of the N330 billion fine imposed by the Nigerian Communications Commission (NCC).
The final payment means that MTN has completed the N330 billion infraction fine and no longer owes the Federal Government.
The development was disclosed by MTN Nigeria’s Chief Corporate Relations Officer, Tobechukwu Okigbo. According to him, the successful resolution of the fine was as a result of strong collaboration between the company and the NCC.
“We are very pleased to have completed the payment of the N330 billion negotiated settlement with the NCC. We are particularly gratified to be in a position to have fully met the terms of the settlement within the agreed timeframes.
“I would like to thank the NCC for their constructive and collaborative approach to this issue, and believe that we emerge from it with a stronger relationship, focused on ensuring maximum value is delivered to our people, from a strong and growing telecoms sector.”
Back Story – In October 2015, NCC imposed a fine of N1.04 trillion fine on the telecom giant for non-compliance with a deadline set by the commission to disconnect all non-registered sim cards. The move by NCC followed accusations by mobile phone users that the regulator had failed to bring operators to account for poor services to subscribers.
Meanwhile, NCC later reduced the fine to N780 billion in December 2015, having taken into consideration the interest of the stability of the telecom sector. The fine was further reduced to N330 billion, even as MTN agreed to be listed on the Nigeria Stock Exchange (NSE). These agreements have now been fulfilled by MTN, including its Lising of 20.3 billion Shares in May 2019.
Payment in tranches: By the terms of agreement, MTN was expected to pay N30 billion into NCC’s Treasury Single Account (TSA) with the Central Bank of Nigeria (CBN) in June while the remaining balance was expected to be discharged as follows: N30 billion on 31 March 2017; N55 billion on 31 March 2018; N55 billion on 31 December 2018; N55 billion on 31 March 2019 and N55 billion on 31 May 2019.
In fulfillment of its agreement with NCC, MTN recently disclosed it has so far remitted N235 billion of the N330 billion. Later in the month, NCC disclosed that the sum of N275 billion had been paid.
“Following a negotiated reduction of the N1.04 trillion fine on MTN Nigeria to N330 billion and in line with the staggered payment arrangement, MTN has, so far, paid N275 billion to the Federal Government”. – NCC
Upshots – MTN’s completion of the fine imposed by NCC is in fulfillment to the May 31st deadline set by the commission. Meanwhile, this is a welcome development as it means more money for the government. However, this is not expected to have any dip on the company’s financial performance as the 2018 FY result shows its operating profit grew by 36%.
Although, other factors may, as investors have been advised to exercise patience until more information is made available to the public regarding the investigation of Economic and Financial Crimes Commission (EFCC), Securities and Exchange Commission (SEC) into the company’s listing activities.