Bloomberg News

Nigeria Regulator Reaches Fines Deal With Phone Companies

June 14, 2012

Nigeria’s mobile-phone companies reached an agreement to pay fines set last month by the national telecommunications regulator for failing to meet minimum service standards.

The payments will probably be made within the next week, Tony Ojobo, a spokesman for the Abuja-based Nigerian Communications Commission, said today by phone. He didn’t say if the companies would pay all of the 1.17 billion naira ($7.2 million) total set on May 11 and the additional charges of 2.5 million naira a day after the May 21 deadline.

“The service providers have given their commitment that services are going to improve because substantial investments are going to be made,” said Ojobo.

MTN Group Ltd. (MTN), the largest operator in Africa’s top oil producer, and Emirates Telecommunications Corp. (ETISALAT), known as Etisalat, were each fined 360 million naira, while Bharti Airtel Ltd. (BHARTI) was given a 270 million naira penalty and Globacom Ltd. was charged 180 million naira, the commission said May 11. MTN and Etisalat cited lack of power and sabotage as reasons for poor connections and dropped calls.

“We had a most constructive meeting with the NCC in Abuja last night and reached agreement on the key issues,” Brett Goschen, chief executive officer of MTN Nigeria Communications Ltd., said in an e-mailed reply to questions today. “We expect to finalize the full agreement by the end of the week including the issue of the payment of the fines.”

Investment Boost

While Emeka Oparah, a spokesman for Airtel’s Nigerian unit, confirmed the companies and the NCC reached an agreement, he said he couldn’t immediately provide details of the accord in a phone interview today. Chineze Amanfo, a spokeswoman for Etisalat’s Nigeria operation, said that all the company executives met the regulator yesterday, though she couldn’t confirm the deal.

MTN is investing $1.4 billion in Nigeria this year to improve infrastructure and capacity, according to Goschen. Etisalat on May 12 said it will spend more than $500 million on its network.

MTN runs two diesel generators at each of its network sites that provide as much as 80 percent of its needs, Goschen said in a May 17 interview. Power cuts occur daily as demand for electricity is almost double the supply. Shutdowns by various government and state agencies for levies and taxes, along with an Islamist militant insurgency in the north of the country, have also hindered repairs and building of new sites, he said.

Mobile-phone subscribers in Nigeria, Africa’s most populous nation of more than 160 million people, reached more than 133 million by April, according to data compiled by the NCC. MTN has 42.8 million users, Globacom has 20.8 million, Airtel has 18.6 million and Etisalat accounts for 11.9 million.

A switchboard operator for Globacom didn’t have contact details for a company spokesman and an e-mail sent to the company’s corporate care address wasn’t immediately answered.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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