MTN to Seek Further Reduction of N680bn Fine, Nigerian Executives Resign

Source: THISDAYLIVE

Telco reviews operating structure

Emma Okonji
with agency report  

Despite the 35 per cent reduction of the N1.04 trillion ($5.2 billion) fine imposed on MTN Nigeria, Africa’s largest telecommunications firm intends to approach the Nigerian Communications Commission (NCC) for a further reduction of the penalty and ask for more reasonable payment terms.

MTN’s parent company announced yesterday in Johannesburg, South Africa, that it had secured a reduction of the fine imposed on it by NCC from N1.04 trillion to N680 billion ($3.4 billion). NCC gave MTN till December 31 to cough up the revised amount.

NCC imposed the fine on MTN in October for failing to meet its deadline for the disconnection of 5.2 million unregistered subscribers.
Under the regulator’s rules, each of the unregistered subscribers attracted a surcharge of N200,000.

However, an official of the company informed THISDAY yesterday that MTN intends to appeal the revised fine again, explaining: “Even with the reduction to $3.4 billion, no company has that kind of money lying around to pay in one fell swoop and in such a short time frame.

“We are certainly going to appeal the new fine and hope that NCC will accept out plea.”
A source also told Reuters that MTN was likely going to open up new negotiations on the issue. “The fine is still big enough to cripple MTN’s ability to invest in its network and that’s what further talks with the NCC are about.”

Also, the executive chairman of MTN Group, Phutuma Nhkelo, in a statement to shareholders in Johannesburg, said yesterday that he would immediately and urgently re-engage with the Nigerian authorities before making a formal response.

The statement continued: “Furthermore, as it is essential for the company to follow due process to ensure the best outcome for the company, its stakeholders and the Nigerian authorities and accordingly all factors having a bearing on the situation will be thoroughly and carefully considered before the company arrives at a final decision.”

The record fine, however, continued to claim victims, with the resignation of MTN Nigeria’s CEO, Mr. Michael Ikpoki, who was replaced by his chief financial officer, Mr. Ferdi Moolman.

In addition, the head of regulatory and corporate affairs in MTN Nigeria, Mr. Akinwale Goodluck, stepped down with the CEO.
His job will be taken over by the company’s head of human resources, Mrs. Amina Oyagbola, who will also retain that position. Mrs. Oyagbola formerly headed regulatory affairs at MTN Nigeria.

Both Nigerian resignations were with immediate effect and followed that of the group chief executive officer, Mr. Sifiso Dabengwa, who was replaced by Nhkelo last October in an interim capacity.

In addition to the Nigerian changes, MTN said yesterday it was reverting to its previous reporting structure and now has three regions: West and Central Africa (WECA), South and East Africa (SEA), and Middle East and North Africa (MENA).

According to the Independent newspaper in South Africa, Nhleko said the “revised structure and strengthened leadership will improve operational oversight and increase management capacity. This will enable MTN to continue to realise its strategy and vision, while also ensuring we achieve high governance standards and robust risk mitigation”.

In this regard, MTN announced a number of senior appointments to support this structure: From this month, Jyoti Desai will become COO, reporting to Nhleko.

Desai has 14 years’ experience at MTN. She has previously held the positions of CIO at MTN Nigeria, was COO of MTN Irancell and was recently seconded to support the Nigerian country operations.

Her replacement as technology and information officer will be announced soon.
Two regional VPs have also been appointed, also reporting to Nhleko. The VP for WECA is Karl Toriola, with Ismail Jaroudi the VP for MENA. The VP for SEA will be announced soon.

Based in Nigeria, Toriola has been at MTN for 10 years, having held senior operational roles at MTN Group and MTN Iran. He was formerly also the CTO at MTN Nigeria and CEO at MTN Cameroun.

Jaroudi has been CEO of MTN Syria since 2006. Prior to this, he held senior operational roles for Investcom’s subsidiaries across the Middle East and North Africa.

Also reporting to Nhleko is the new group executive for mergers and acquisitions, Matthew Odgers. The former head of TMT for Africa & the Middle East and head of investment banking for Middle East and North Africa at UBS, Mr. Odgers led UBS’s overall relationship with MTN.

MTN added that its search for a Group CEO was underway and remained a priority.
MTN, which launched in 1994, is active in 22 countries in Africa and the Middle East with 233 million subscribers. Nigeria is its largest operation.

Reacting to the news of the revised fine and new company structure, MTN shares extended their decline to trade 2.6 per cent lower at 142.90 rand as of 1.08 pm in Johannesburg, valuing the company at 264 billion rand ($18.4 billion), reported Bloomberg. The stock has fallen by about 25 per cent since the penalty was made public on October 26.