Nigeria by the Nigerian Communications Commission (NCC).
The latest from that saga came from governors of the 36 states of the
Federation who unanimously asked MTN to pay up the fine , while other
stakeholders believe the company needs a soft landing.
Commenting on this development, an industry analyst, Femi Fasanya,
said, "governors are saying that MTN should pay the whole fine, but
many of them are yet to pay salaries of their workers.
"If there is a lay off after the payment, will NCC, the Federal
Government and the governors absolve and pay those that may be laid
off?"
Also reacting, Taiwo Jacobs, another stakeholder believes that if MTN
is asked to pay all the money, it may affect the capacity of Nigerian
financial institutions especially as many of them are not healthy
enough to withstand financial pressure any more owing to the current
state of the economy.
But some other financial experts believe that MTN can convieniently
pay the fine except that it would erode on its profitability for the
year.
In a phone interview, Dr. Mustapha Ojo, a financial expert explained
that contrary to the belief that Nigerian banks don't have the
financial muscle to pull the fine, "only three banks can covieniently
loan MTN from their minimum capital assuming it has not borrowed money
to service other projects. Banks are intermediaries between the
deficit and the surplus side of the economy. The question should be,
where will MTN get the money? Will it borrow it from Nigerian banks or
bring the money from its stock exchange in Johanesbourg?
"Although, I am certain that it can raise from Nigerian banks because
they are not loaning out because economy is not viable . Nothing is
currently moving, however, they will feel more comfortable to loan MTN
because it is exposed to banks.
"Exposure is rooted in behavioural finance and banking is based on
Other Prople's Money (OPM). OPM is the pscychology of the poor and
rich towards investment. The rich invest their money and spend what is
left. While, the poor spend thier money and invest the rest."
On the other hand, Sola Carew, a banker allayed fears that it won't
affect financial system liquidity but that more drop calls and poor
service delivery may be experienced by susbcribers.
He further explained that MTN is not an indigenous company that
retains its profits in Nigeria. They take it back to South Africa.
"The fine is an indirect way of retaining income made by MTN into the
Nigeria's tax web of a fine".
However, he cautioned that MTN may not be able to declare much profit
for the year and might need to sack workers to be able to remain in
operation".
Meanwhile, some industry watchers believe that with N1.4trillion (
$5.2bn), about 1/4 of Nigeria's total budget for 2015 is slammed on a
company. This may discourage foreign investors and destroy a workplace
with over 90 per cent of Nigerians.
"This amount could transform any country, but may end up killing the
dominant operator and discourage foreign investors".
A stakeholder and President of Association of Licensed Operators of
Nigeria (ALTON), Mr. Gbenga Adebayo said:
"There is no two way about it. This kind of fine is extremely
outrageous for any business. Government needs to decide whether it
wants to destroy or help build the nation.
"The truth is that foreign investors will not only be discouraged,
Nigeria will find it difficult to convince any foreign investor it has
conducive atmosphere. As if that was not enough, if all these
companies collapse and many Nigerians are thrown back into the
unemployment market, has NCC's effort at regulation become a plus or
minus?"
A source in MTN, who pleaded anonymity, stated that it is not too good
to throw away a baby with his bathwater.
According to the source, since MTN Nigeria started its operations, it
has paid well over N4billion yearly to NCC as operating levies and
even during this fine issue, NCC has renewed our licennse for another
five years.
"MTN is law abiding, it has paid over N1trillion in taxes and levies
since August 8, 2001 when it started operation and invested well over
$15bn on network roll out. When NCC slammed the $5.2 billion sanction,
a network operator has to cross check, everyone has a right. It need
to respect its subscribers' right and it took a while to deactivate
the 5.1 subscribers, before it realised what was happening again, the
regualtor has slammed yet another fine.
"NCC has to look inwards so that many operators will not become
history, " the source said.
It will be recalled that MTN Group CEO Mr. Sifiso Dabengwa resigned
his appointment because of his inability to settle the issue amicably.
-TheSunNews
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