MTN fine and NCC show of good faith, by Ken Ugbechie

MTN fine and NCC show of good faith, by Ken Ugbechie

 

Danbatta-NCC-EVCIt is no news that the nation’s economy is in despair. The economy has shrunk courtesy of dipping receipts from crude oil. But it is not only the Nigerian economy that is adversely affected by the global oil turmoil. Other member OPEC nations and non-members which profited from the boom in crude oil prices of yesteryear also feel the pinch. But unlike Nigeria, other smart economies have long found their way round the perilous cliff.

Through deep thinking, planning and careful execution, they have been able to plough crude oil money in the oil boom years to other ventures. Dubai, one of the Emirates that make up the United Arab Emirates invested heavily in telecoms. As far back at 2012, Dubai enabled with pervasive broadband was making more money in Information Communication Technology (ICT) than it was getting from oil. The pervasive deployment of broadband in Dubai by the UAE government also gave impetus to the commercial buzz which the Emirate is noted for.

The implication of such foresight is that today when crude oil and associated products prices are nosing south, the economy of Dubai and by extension the UAE are insulated from the global doom and gloom. This is the difference between some emerging economies and Nigeria in the face of dwindling global oil prices. Smarter countries have found succour in non-oil sectors.

In Nigeria, only one sector has continued to fly the banner of hope. Telecom has refused to capitulate to the current economic flagellation buffeting the nation. The recent figures from the National Bureau of Statistics (NBS) testify to the impressive landmarks and highpoints in the nation’s telecom sector. A few would suffice.

Whereas the national economy regressed to -0.36% in the first quarter of 2016, the telecom sector on the contrary contributed, in progressive and real terms, about 8.83% to the GDP within the same period. This translates to an increase of 0.5%, relative to the growth in the last quarter of 2015. Put plainly, while other sectors of the national economy are going through retrogressive motion, telecom is on the upswing.

Recently, a wave of retrenchment swept through the banking sector, a major employer of labour. The Federal Government, obviously embarrassed by the situation rallied to prevail on the banks to suspend the mass sack going on in the sector. On the face of it, it did appear ridiculous for government to dictate to a private establishment, which is what banks are, who not to sack and when not to do so. But we cannot blame the banks or any other private sector establishment for shedding weight. They were merely responding to the prevailing harsh economic realities.

Yet, it is within this period of national economic turbulence that the telecom sector has continued to manifest raw evidence of growth as attested to by the NBS. The growth is profoundly illustrated by the increase in Foreign Direct Investments (FDIs) from $32 billion in 2013 to the current status of $38 billion. Beyond that, telecom has continued to reflate the economy by creating both direct and ancillary jobs. Telecom has over time remained the only sector where Nigeria has shown clear leadership in the comity of nations. At international conferences especially those hosted by the International Telecommunications Union (ITU), the telecom arm of the United Nations, the Nigeria telecom narrative has continually been used as a benchmark for regulatory excellence.

But the Nigerian telecom miracle, it must be emphasised, is no happenstance. The success story is a product of deep thinking, thorough planning and careful execution. And more importantly, it is a product of continuity and policy sustainability. The man who started what has been variously dubbed the ‘telecom revolution’, Mr. Ernest Ndukwe was succeeded by Dr. Eugene Juwah who was smart not to jettison the programmes of his predecessor. The extant Executive Vice Chairman of the Nigerian Communications Commission (NCC), Professor  Umar Danbatta has gone one step smarter. He is not only continuing with the policy direction of his predecessors which sums up to engendering a robust telecom ecosystem, he is constantly engaging with the stakeholders in the industry.

His regulatory style is a mix of a leader who is pliant but firm, liberal yet decisive. He has demonstrated very clearly that the telecom regulator is not just there to fill a status requirement but as a superintendent who oversees all the activities in the telecom space and one who will not hesitate to wield the big stick to rein in errant operators.

A case-in-point was the MTN fine of N1.04 trillion for obvious SIM card registration infraction. The fine was twice revised downward with the last review standing at N330 billion and payment staggered over a few years. The fine was imposed barely two months after Professor Danbatta was confirmed by the Senate as the substantive EVC. It must have been a tough call to make but it has to be made. While some hailed the decision as germane, some others argued that it was a bit much for MTN to carry. Those who argued on the basis of the hugeness of the fine simply miss the point. They fail to connect the infraction to the statute guiding the industry.

The argument that feeds from the hugeness of the fine is grossly circumscribed by the fact that the fine was not manufactured suddenly; it was calculated from existing guidelines which is well known to all operators. It was, therefore, not a product of vindictive fury or emotional spur of the moment.

When in 2010 in the Gulf of Mexico in the United States, BP Plc was involved in a major oil spill, the US government in 2015 imposed a fine of more than $20 billion on the company to resolve claims arising from the spill. It was the largest corporate settlement of its kind in US history, according to Attorney General Loretta Lynch. The $20 billion was arrived at after much plea from BP and unrelenting negotiation by agents of the company with officials of the US government. It could have been more. But that was not all. The $20 billion added to the $43.8 billion BP had previously set aside for criminal and civil penalties and cleanup costs. Nobody in US condemned the fine as too high. BP accepted to pay knowing it has no defence as its action had serious damaging effect on the US environment. The law was applied; and the law is supreme.

This is why most Nigerians think Professor Danbatta deserves laudation for his courage and boldness to invoke the nuggets of the regulatory guidelines governing the industry. The reduction of the fine is not in itself an infraction or negation of the law but a strong and bold show of good faith which is permissible in any business clime.

Professor Danbatta has sent out a clear message to operators and stakeholders that Nigeria telecom sector is not an open space for corporate rascality and arbitrariness. His action sits well with the zero-corruption crusade of the President Muhammadu Buhari government. The show of good faith to MTN will help bolster investor confidence in the sector. Smart investors do not stake their money in an environment of chaos and disorder; they go to where there is order and stability. The latest rumpus by the National Assembly to undo the ‘truce’ reached between MTN and NCC is needless and will do more harm than good to the nation. The telecom sector is on a momentum of real growth; nothing should be done to stop it. It is the one sector that has brought Nigeria more global honour and garlands. To stop the momentum is to commit national socio-economic hara-kiri.

  • Published in the Sunday Sun…June 26, 2016