Business News
Much like Nigeria, South Africa fines MTN over regulatory breach
Earlier this week, MTN Group Limited was fined the sum of ZAR 5 million (about $340.597) by the Independent Communications Authority of South Africa over an alleged corporate non-compliance.
Earlier this week, MTN Group Limited was fined the sum of ZAR 5 million (about $340.597) by the Independent Communications Authority of South Africa over an alleged corporate non-compliance. This is reminiscent of earlier development in 2015 whereby the Group’s Nigerian subsidiary was heavily fined by the Nigerian Government due to a similar offense.
Reason for the fine: According to a comprehensive report by the South African regulator’s Complaints and Compliance Committee, MTN Group contravened a session of the regulations guiding telecoms providers in the country. In specific terms, the telco failed to give the required 7 days’ notice before increasing the price of its Whatsapp bundles.
ICASA has decided to fine MTN after they were found to have contravened Regulation 9(1)(b) of the Standard Terms and Conditions for Individual Electronic Communications Services, 2010 as amended. https://t.co/SQQOgspQiq pic.twitter.com/aTumYQOTGt
— ICASA (@ICASA_org) September 9, 2019
More of the details: In early 2018, the telecoms giant launched a special Whatsapp bundle which initially cost ZAR 10 for 1GB. The cheap Whatsapp data service (which MTN would later regret,) quickly attracted millions of South Africans to start subscribing. In just two months, MTN said it recorded a 300% increase in the number of people using the service.
[READ: MTN Nigeria’s first-quarter blow out result in summary]
Meanwhile, a spike in new users meant that MTN’s 3G network soon began to experience efficiency issues as it could not handle the growing number of new users. This situation informed the company’s request that the regulator should permit a more significant increase in the price of its Whatsapp service to ZAR 30. This would enable the telco to successfully finance a planned upgrade of its 3G infrastructure.
An MTN Office
The company went ahead to hike the price of the service before obtaining regulatory approval. It claimed that the increase was carried out as a matter of urgency, considering that its 3G network was at risk.
Following a thorough investigation of the matter, the Independent Communications Authority of South Africa ruled that MTN be fined for flouting an important regulation.
Note that even though the company has reasons for wanting to increase its Whatsapp bundle price, those in support of the regulatory fine have argued that telecoms providers are always quick to hike prices even though they are slow to reduce same.
[READ: MTN’s partnership with Sterling Bank makes it easy to buy phones]
In the meantime, it is interesting to see how the South African authority will quickly impose a fine on MTN for committing the kind of offense the Nigerian Government would probably have overlooked if it were committed by the Group’s Nigerian subsidiary.
Recall that in 2015, MTN Nigeria Plc was heavily fined for engaging in sharp practices after failing to properly register the SIM cards of its customers. The $5.2 billion fine was later reduced to $1.7 after months-long negotiations. Subsequently, payment for the fine was made in batches, the last of which was made in June.
Chief Legal Officer of Oando Plc, Ngozi J Okonkwo is dead.
Adewale Tinubu, Group Chief Executive Officer of Oando Plc announced this via a tweet.
Get breaking news on the Nairametrics News App
#RIP Ngozi J. Okonkwo, Chief Legal Officer, @Oando_PLC #RIPNgoziOkonkwo pic.twitter.com/CVgCiyADVY
— Wale Tinubu (@AdewaleTinubu) June 4, 2020
Until her death, she was the Chief Legal Officer of Oando Plc, having joined the company as Head, Legal Services of the company in 2009.
According to a tweet from one of her nephews, she battled cancer for a while, recovered before having a relapse during the recent COVID-19 crisis.
She went hard all the way, she was going to beat the cancer and do it in style. Unfortunately she was a citizen (read denizen) of a country determined to kill its children.
— Deno Landing🦍 (@zvko_) June 4, 2020
Before joining Oando, she worked as Junior Counsel with F.O Akinrele & Co., and also with KPMG Professional Services (previously known as Arthur Andersen) as Manager in the Tax, Regulatory and People Services unit and Head of indirect tax services.
READ ALSO: Common legal and general mistakes made by new businesses (Part 1)
She obtained LLB (Hons) from University of Nigeria, Nsukka in 1997 and BL from the Nigerian Law School, Lagos in 1999. She was a member of the Nigerian Bar Association, honorary fellow of the Association of Fellows and Legal scholars of the centre for International Legal Studies, Austria, Associate Member of the Chartered Institute of Arbitrators, United Kingdom and Associate Member of the Chartered Institute of Taxation, Nigeria.
Economy & Politics
NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel
The Nigerian National Petroleum Corporation (NNPC) has announced that it is building up business portfolios in the housing, power, and medical sectors.
To cushion against the volatility in the global crude market and strengthen profitability, the Nigerian National Petroleum Corporation (NNPC) has announced that it is building up business portfolios in the housing, power, and medical sectors.
This is one of several measures the corporation is taking to sustain revenue generation for Nigeria, and cope with the boom and bust cycles which are gradually becoming a feature of the global crude oil market.
NAN reports that this was contained in a statement from the Corporation Chief Operating Officer, Ventures and Business Development, Mr. Roland Ewubare, and signed by NNPC Spokesman, Kennie Obateru.
According to Ewubare, the NNPC will establish Independent Power Plants using the Ajaokuta-Kaduna-Kano (AKK) pipeline network, and consolidate its presence in the power sector.
(READ MORE: COVID-19: Nigerians react as CBN partners NNPC to feed, accommodate Nigerian returnees)
The statement reads in part; “NNPC is creating an energy company that would have portfolios in renewable energy; we have initiatives on solar that is ongoing.
“We have got biofuels agreements with some state governments that would soon be activated. We do have a lot of non-core businesses that are aggregated under the Ventures and Business Development Autonomous Business Unit of the NNPC.
“This would be expanded through effective collaboration and partnership with the private sectors,”
Lower costs, more profits
As part of moves to improve profitability, the NNPC also announced plans to drive crude oil production cost down to 10 dollar per barrel by Q4 2021,
This according to the statement would be done by systematically and gradually beating down logistics costs.
The Corporation’s revenue took a major hit in 2020 due to the slump in global oil prices, and this in turn affected the Nigerian budget given that oil proceeds account for a significant fraction of her income.
“When you have a low commodity price regime, as the case now, the only way we are able to squeeze out some reasonable cash and financial gain to the nation is by curtailing and constraining our costs in line with the GMD’s aspiration to push for a 10 dollar per barrel cost of production,” Ebuware said.
(READ MORE: NNPC pipeline vandalism up by 50% in January, may suspend crude oil production)
There is also an ongoing collaboration with selected partners to commercialise flared gas in order to preserve the flora and fauna of the country.
This would be done by converting it to Compressed Natural Gas (CNG) and Liquefied Natural Gas, for sale to consumers.
The NNPC is partnering with private developers to reduce the housing deficit in the country and also partnering with medical centres to provide innovative healthcare for Nigeria.
Business News
Microsoft Teams’ rival, Slack shares drop on withdrawal of full-year billings guidance
Slack reported steady revenue growth 50% in Q1 2020, compared with 49% recorded in Q1 2019 on an annualized basis this brought in more customers
Slack shares dropped as much as 17% yesterday after the company’s reported first-quarter earnings.
Investors and stock traders were not happy with Slack’s annual revenue forecast of $855 million to $870 million, up just slightly from Slack’s projection in March stock analysts, on the average, estimated $856.5 million, according to data obtained from Bloomberg.
“Slack’s withdrawal of full-year billings guidance looks conservative to us and likely suggests a pull-forward of revenue amid faster new-customer additions due to remote work,” Mandeep Singh, a Bloomberg Intelligence analyst, wrote in a note yesterday.
Slack grew revenue 50% in Q1 2020, compared with 49% recorded in Q1 2019 on an annualized basis.
However, Slack reported steady revenue growth during Q1 2020 brought in more customers, as organizations sought to keep communications going with their newly remote workforces during coronavirus pandemic. It had earnings per share of 2 cents loss per share, adjusted and adjusted revenue of $201.7 million
(READ MORE: How to Profit from Directors’ Share Dealing Notifications)
Slack, in a statement, yesterday reported that it added a record 12,000 paid customers Q1 2020 as against two prior quarters when it added about 5,000 new customers. Slack’s top competitor, Microsoft’s Teams, has also experienced growth in recent months.
“What you saw with Zoom, what you saw with Teams is a great indication that this is not apples-to-apples and that the products are not truly competitive with one another,” Butterfield the Chief Executive Officer of Slack told Investment analysts on a conference call yesterday.
READ ALSO: Jumia is optimistic of COVID-19 boost, despite poor Q1 2020 earnings report
Paid users spent over 120 minutes per day in Slack at the end of the quarter, up from below 90 minutes one quarter earlier.
“I can’t care about the stock price on the level of individual days,” Butterfield said when asked about the reaction to earnings. “I just wouldn’t be able to do my job. I care about where the share price is five years from now and 10 years from now. This is just a very volatile time.”
