Monday, June 4, 2012

N1.17bn fine: NCC plans to withdraw regulatory services to erring Telcos


... Operators may sue commission
Ben Uzor Jr

There are strong indications that the Nigerian Communications Commission (NCC) may withdraw critical regulatory services to erring telecommunications companies if they refuse to pay the cumulative N1.17 billion fine for poor quality of service rendered to subscribers on their respective networks, Business Day can now reveal. One of such services the regulator could withdraw, Business Day gathered is the issuance of new Mobile Subscriber Identification Digital Numbers (MSIDN) series to erring operators for new subscribers on its network. This move, according to informed sources is the first in a series of regulatory sanctions that the NCC would impose on telecoms operators if they fail to comply with its directive on payment of the fines.

It was also learnt that the NCC will stop entertaining any request whatsoever from erring network operators until they have paid the fines. According to an informed source, the commission might also stop approving new products and services developed by erring operators for their subscribers. This is in an attempt to compel them to comply with the commission's directive. Analysts however told Business Day that these actions if implemented by the telecoms regulator might adversely affect telcos' performance in terms of revenue generation and profitability. "There are options that are open to the regulator in the event where the service provider is not ready to obey. There is no way a service provider can do without the regulator. There are so many things a service provider cannot do without approval of the regulator. The regulator has a number of regulatory tools to get the service providers to conform or obey the rules", Tony Ojobo, director of public affairs, NCC said.

Ojobo was however not specific about what course of action the regulator would take. On May 11, the telecom regulator had placed a collective fine of N1.17 billion on the operators for rendering poor services to subscribers on their networks. The regulator however gave operators till May 25 to pay the fine, but they failed to meet the payment deadline. The NCC instead said in line with the quality of service guideline, each of the operators would pay an additional N2.5 million each day as long as the contravention persists.

As at Monday (June 4), MTN is expected to pay a total of N382, 500, 000, while Airtel will pay the sum of N292, 500, 000. Etisalat, which was initially billed to pay N372, 500, 00, with the addition of N10, 000, 000, the company will be paying the total sum of N382, 500, 000. Globacom on the other hand, is expected to pay a total of N202, 500, 000. The grand total the four companies are to now pay will be N1, 260, 000, 000. Moreover, telecoms operators under the auspices of the Association of Licensed Operators of Nigeria (ALTON) are seriously considering suing the NCC over the N1.17 billion penalty imposed on them for poor quality services in the months of March and April by the regulatory body.

Gbenga Adebayo, chairman of ALTON in an interview, was sure of the possibility of the association seeking redress in the law court if the NCC insisted on implementing the fine. According to Adebayo, if dialogue, legal process and other options failed, the operators would pay the fine, but not without a cost to all stakeholders, including the country’s over 96 million active subscribers. “I will warn that the NCC should mind the cost because if operators pay the fine, it would come at a cost to everybody. The issue of fine will not improve the quality of service, and if NCC keeps asking operators to pay fine; then, NCC will preside over a collapsed industry. “Let me warn again there is no institution that is insulated against failure and the fastest way to make a business fail is by introducing unfavourable policies. We should be careful not to destroy the telecoms industry with penalty regimes or with policies because the industry is not established yet.”

First published on Business Day Media, Monday 4 June 2012.

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