Here is why the National Communications Commission (NCC) reduced MTN’s fine

In October this year, Nigeria’s largest telecommunication provider, MTN, was fined a record fee of $5.2 bn for failing to comply with directives laid out by the National Communications Commission (NCC).

After months of negotiation, last week, the Nigerian Communications Commission (NCC) sent a letter to MTN stating the N1.04 trillion fine is being reduced by 25 percent to 780 billion naira giving them until the 31st of December to pay the fine.

MTN’s $5.2 billion fine adds up to nearly a quarter of Nigeria’s national budget for 2015 and it has come at a time when the country needs it most, thanks to the fall in oil prices. Naturally, some Nigerians were aggrieved about the NCC’s decision to reduce the fine and have described it as a violation of a fundamental human right and a breach of some sections in the Nigerian constitution.

However, the NCC has defended itself by stating it has had cases in the past where organisations pleaded for leniency on their sanctions and the commission took this into consideration. In the case of reducing MTN’s fine, the commission has weighed the pros and cons, focusing heavily on the need to ensure stability in the telecommunication sector. “After considering the operator’s admission of guilt, noting their huge investment in the country, the large subscriber base it holds and Nigeria being its largest market, the decision to arrive at the reduction was not too difficult”, said the Director of Public Affairs for the NCC, Mr Tony Ojobo.

In April this year, MTN’s investment in Nigeria hit a record of $15 billion dollars. Considering this level of investment, the NCC deemed it fit to reduce its fine in order to allow the telecommunications company continue operations in Nigeria.

MTN’s fine is already 50 percent of its estimated revenue of $10.7 billion this year which means, if it is paid, they would have to lay off staff thus increasing the rate of unemployment in the country. The reduction of the fine shows Nigeria is not trying to scare away investors but ensuring that these foreign investors comply with the rules laid down by the country.

Having considered Nigeria as MTN’s biggest market with over 60 million subscribers, the level of its investment, and the plea for leniency, the NCC justified its action on adjusting the fine for the company.

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