Why MTN’s unregistered SIM fine was N1.04trn

Senior industry sources yesterday revealed to BusinessDay how the N1.04 trillion fine imposed on MTN, Nigeria’s biggest mobile telephone network by the Nigerian Communications Commission (NCC) was arrived at.  Our sources said the fine was computed at the rate of N200,000 per unregistered or improperly registered SIM.

They also said that the consequence of MTN’s failure to comply with the directive is even more pronounced, as fully half of all the invalid registrations shared by the NCC belonged to MTN.

Akinwale Goodluck, MTN’s Corporate Services Executive, confirmed that regulator has issued a penalty and MTN is not denying the allegation of non compliance with the deactivation directives.

“This fine relates to the timing of the disconnection of the 5.1 million MTN subscribers that were disconnected in August & September 2015 and is based on a N200,000 fine for each improperly registered subscriber.  MTN Nigeria is currently engaging with the NCC to resolve the matter,” he said.

BusinessDay however gathered that the NCC fined MTN “for allegedly undermining efforts by the Nigerian government to tackle security challenges and the war on terror and allied crimes, as the telecoms operator has allegedly refused to deactivate unregistered mobile phone lines on its network”.

This is reportedly the largest fine issued in the history of telecom infringement.

Also we gathered, there had been series of meetings leading to the final fine imposition on MTN by the NCC. In 2010 Nigerian Telecommunication operators were mandated to start collecting biometric and personal data of new subscribers in a bid to enhance national security.

This was initiated by the Office of the National Security Adviser (NSA) in collaboration with other security agencies and the NCC. Also in November 2011 the SIM Registration Regulations set out a fine of N200,000 for every SIM card found to be fully active without proper registration details and the same fine for failure to bar network lines within 30 days of activation.

In November 2013, operators were directed to fully bar any newly registered SIM card which fails to perform a voice or data communication within 48 hours after its registration and in September 2014, the NCC, shared details back to operators of registrations records that the NCC judged as invalid on its system.

Operators were then directed to clean up their registration records through deactivation or reconcile the records within a 30-day period. However, MTN had failed to fully deactivate any subscriber.

Again in July 2015, the NCC directed operators to deactivate all SIM cards without a record of activity within a 21 day period. And in August 2015, the NCC and security agencies conducted a compliance audit on all operators between August 17, 2015 and August 19, 2015 following expiry of the deadline of August 11, 2015, for deactivation of improperly registered SIM cards.

The NCC disclosed on August 17, 2015, that despite sharing a list of invalid registration details with operators, MTN had made little or no effort towards compliance with the deactivation directive, whilst other operators had largely complied.

On September, 4, 2015, a high level meeting with telecom CEOs, the heads of main security agencies and the Executive Vice Chairman of the NCC, chaired by the Chief of Staff to the President of Nigeria was called at the Presidential Villa to emphasise the importance of compliance with the deactivation directive and that all businesses must respect the law or risk licenses being revoked.

Operators were implored to take the matter seriously because security and safety of the people is of utmost priority and that most violent crimes and insurgence are facilitated by the use of unregistered SIM cards, making it impossible to trace the perpetrators. The recent kidnapping of former finance minister, Olu Falae is an example of this risk; the kidnappers used MTN SIM cards and MTN was unable to provide any registration data for those SIMs.

When asked why SIM registration was  such a messy issue after the many extensions granted by the NCC, Funso Aina, MTN’s Public Relations Manager told BusinessDay; “It is important to note that the perceived irregularities which necessitate the revalidation exercise was due to a number of reasons, many of which are outside the control of operators.

“These include the general apathy of some subscribers to giving personal information, giving wrong and incomplete information and data reconciliation issues during previous SIM registration exercises. But beyond that, it is important to note that attempt at data capture of such magnitude was the first of its kind in Nigeria, and probably the largest of its kind in sub-Saharan Africa.

“So it was bound to be fraught with some challenges, moreso, as we had no data base to validate against.”

Jumoke Akiyode