MTN may lose millions in bulk sms revenue because of a court judgement

MTN Nigeria, the largest GSM operator in the country, may see a drop in revenues due to a recent court judgement. The court ordered MTN to pay the sum of N3 million to a customer for sending him unauthorized sms. The judge described sending such sms as a ‘violation of the customers right to privacy as enshrined in Secion 37 of the Nigerian constitution’.

The impact of the judgement goes beyond the sum awarded to the customer. Other customers in the country may file similar cases against not just MTN but other telecommunications firms in the country. MTN would have to seek consent from each of its customers before it sends sms. Naturally, most customers will decline, thus reducing the revenue the company will make from the service. Companies that make use of the service will have to find alternative means of marketing. Bulk SMS delivery using GSM companies has been a major means of marketing, because the GSM operators have access to a large database by virtue of the SIM registration carried out by subscribers. The bulk sms operators themselves will witness a decline in revenue as fewer subscribers would agree to receive the sms.

The court judgement is one of several challenges the company is currently facing. Data compiled by the Nigerian Communications Commission (NCC) show that the MTN Nigeria lost several of its customers to other network operators in the three month period ended March 2017. The company may have to increase its efforts to diversify into other sources of revenue. MTN is currently in discussions with Multichoice Africa in respect of a possible acquisition of the company. MTN was in 2015 fined a record $5.2 billion for not deactivating improperly registered sim cards. After diplomatic intervention from its home country, the fine was reduced to $3 billion to be paid in tranches.

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