THAT HUGE $5.2 BILLION NCC FINE ON MTN

It was widely reported on Tuesday the 27th of October 2015 that NCC, the regulatory body for the telecommunication companies in Nigeria had slammed MTN with a huge fine of $5.2 Billion! The fine was to serve as punishment to MTN for failing, contrary to the directive of NCC, to disconnect about 5.1 million phone lines which were not registered as directed by NCC after the end of the August 2015 deadline set by the NCC.

While it is appropriate that MTN be sanctioned for violation of NCC’s directive, the fine levied, N200,000 for every line not disconnected by MTN is huge and could result in crippling the network’s operations.

Analysis of the fine according to AP (Associated Press), may provide some guidance. In the AP report, the $5.2 Billion fine imposed on MTN is equivalent to at least 2 years average profit for MTN and nearly three times the $1.83 (this figure might be a mistake as the figure on MTN's website differs) the telecommunications network has invested in Nigeria. Also, when looked at from the fact that MTN in 2001 paid what now seems like a mere $285 Million for the licence that enabled it to start operations in Nigeria, one can only conclude that the regulatory body has dealt a blow which while it may not result in death for the big telecommunications firm, may send a big part of its operations into a coma for quite a while.

Information available on MTN’s website show that MTN invested a total of $12 billion in the country from 2001 to 2013 and planned to invest additional $3 Billion between 2013 and 2015. The amount invested in the country by MTN was said to include what was spent on getting the largest digital (microwave) transmission backbone across the country, the investment in fibre optic service and the largest network switch centre in the country.

The above are mentioned to serve as a guide to what an amount as huge as $5.2 Billion can achieve.

Indeed, the NCC in imposing the fine on MTN must have borne in mind the provision of Section 2 of its Guidelines on Procedure for Granting Approval to Disconnect Telecommunications Operators. Paragraph (3) under Section 2 of the Draft (Not sure whether it’s still draft or now in force) Guidelines provides that one of the criteria which NCC should consider in deciding whether or not to grant approval for a network operator to be disconnected shall include the public interest to observe the rule of Law and the need to entrench good corporate governance practices among operators.

There is absolutely no doubt that the above guide is a very sound one. I am a firm believer in the fact that the major reason why our dear country has turned out the way it has is because no sanction attaches to wrongdoings. Where the wrong doer is particularly a “big” man or woman, not only is there no sanction, what the wrong doer gets is a reward. This will always have the effect of promoting wrongdoings while at the same time discouraging all those who always want to the right things.

Because of this, I believe very strongly that MTN should be sanctioned for disobeying the NCC directive especially in these days when the country is battling with terrorism and kidnappings and all sorts of other criminal activities. However, much as I support that MTN should be sanctioned, the sanction should not be such as would cripple the operations of the company unless that was the intent of the NCC in imposing such a debilitating fine.

A look through the provisions of NCC’s Guide on Interconnectivity earlier mentioned shows the reluctance by the drafters of that guide to approve the disconnection of any network operator mainly because of how this may affect subscribers. In the same vein, I believe NCC should also bear in mind the larger impact crippling a company as big as MTN may have on the economy. There is no doubt MTN should be sanctioned. But while the sanction should have an impact on the sanctioned in order to serve as deterrence to others, it should not be such that it could kill it.

NCC under Sections 55 & 65(1) of the 2003 Nigeria Communication Commission Act that created it has the power to impose fines in such amounts by exercising its discretion. But just like judges, such discretions are not to be exercised arbitrarily.

As an aside, I wonder what NCC does with all the fines collected from licensees. I remember that NCC slammed huge fines a few years ago on the three major telecommunication networks for the bad services they were rendering. Since then however, the services of the network operators have consistently deteriorated. Perhaps, NCC has to think of another way to enforce provision of good services to consumers of telecommunication services.

SOMEWHERE IN THE LAW… Lagos State Traffic Management Authority Law 2004

Since LASTMA is a hot topic at the moment, it might be appropriate to start off this new segment (which I hope to continue diligently) with the Law which established the Lagos State Traffic Management Authority in 2004. The focus today in that Law is on Section 16 which provides:

Section 16 (1): A person shall, before he is appointed as a member of the Authority, be required to declare his interest, if any, in any transport or other business organization undertaking transportation of passengers, or goods or engaged in the repairs and maintenance of vehicles or manufacturing or sale of any equipment used by the Authority.

Section 16(2): A member of the Authority who acquires any financial interest in any organization undertaking transportation of passengers or goods or engaged in the repairs and maintenance of vehicles in the production or sale of any equipment used by the Authority shall within one month of such acquisition give notice thereof in writing to the Authority specifying the interest so acquired and the Authority may, after taking into consideration all the circumstances of the case, decide whether—

(a) to retain him as a member of the Authority; or
(b) to remove him from such membership; or
(c) attach any condition to his membership.

Section 16 was picked in view of the fact that a good number of the members of LASTMA either have interests or own quite a number of commercial vehicles now operating in the State. I in fact got to know once when I was at one of the LASTMA offices in the State that commercial buses arrested are not booked until LASTMA officials ascertain that such vehicles were not owned by one of them.

It is also not much of a secret that some LASTMA officials (or members as the Law refers to them) either own or have interests in private towing vehicles.

In view of the provision of Section 16, one wonders how many commercial bus-owning LASTMA officials declared their interests and how quite a number of them would be able to explain the acquisition of the buses and towing vehicles. Perhaps the really relevant question to ask is how many of them are aware of this provision of the Law.

LASTMA ON "STRIKE"

Sometime in the early 90s, I represented my mum at the Parents/Teachers Association (PTA) meeting at one of my brothers’ school. One of the parents at the meeting in talking about getting the school back on track said it was important that the standards of education not be allowed to decline. He said that if there is a serious problem with the infrastructure in the school, that could be built within a short time once the funds were available but if pupils/students are not given the right foundation or education, it may take much more than just funds to get things right. I have never forgotten that statement and I will come back to the statement later in the course of this write-up.

In 2004, the then governor of Lagos State, Senator Bola Tinubu, who really achieved more for Lagos State than most people remember or are willing to give him credit for, established the Lagos State Traffic Management Authority (LASTMA) to ease the traffic bottlenecks in the State.

In spite of the fact that the Second Schedule to the Law under which LASTMA was established created some offences and listed the penalties therefor, I doubt that very many people would dispute the fact that LASTMA under Senator Bola Ahmed Tinubu stuck to its mandate and indeed achieved the main objective of easing traffic bottlenecks in the State.

LASTMA continued in the direction under former governor Bola Tinubu in the first few years under the immediate past governor, Babatunde Raji Fashola. And indeed, it should be said that the procurement for LASTMA under the administration of former governor Fashola of several towing vehicles, helped in no small measure to quickly clear the road either after a breakdown or an accident.

Trouble started in my opinion however when the State under the immediate past governor decided that slamming heavy fines on errant drivers was the ultimate solution to traffic lawlessness. It is no secret that most LASTMA officials make a lot of money daily by entering into negotiations with apprehended drivers and diverting fractions of the official fines to their own pockets. The heavy fines set by the State government turned most LASTMA officials into the monsters they later became. I don’t know if the State government was making a lot of money from the fines imposed on errant drivers, but I know that a lot of LASTMA officials made a lot of money because the fines set were so high.

LASTMA went from being a genuine traffic management outfit to a body which had as its priority, revenue generation; both for the State and (as it appeared), more importantly for individual officials. The lust for money became so great that quite a number of LASTMA officials would in fact deliberately mislead drivers into entering one-way roads in the absence of conspicuous signs which should have done the job, and have their colleagues waiting ahead to make arrests. Where LASTMA officials should have been proactive in preventing the commission of traffic offences, they wait (and perhaps even pray) for you to make sometimes, honest mistakes and then swoop on you because it puts money in their pockets.

It can then be imagined, how majority of these extremely dirty LASTMA officials would feel when the new governor told them to stop harassing motorists. Perhaps there was a meeting, perhaps there was a directive. But what followed after the governor’s directive was an open defiance or rebellion by LASTMA officials who then decided to report at their duty posts, but to lift no finger (or leg) in traffic management.

LASTMA officials, at least a good number of them, stopped working. In Lagos State where commercial bus drivers have an infinite capacity for lawlessness, LASTMA officials stopped working. In Lagos State where the average private vehicle driver has a near infinite capacity for lawlessness, LASTMA officials stopped working. The result is what most Lagosians have been experiencing in the past several weeks. Traffic gridlocks for no discernible reason. And of course, with these gridlocks come robberies in traffic.


Governor Akinwunmi Ambode should respond by sanctioning a number of LASTMA top officials. The last I checked, the governor retains the power under the 2004 law which established LASTMA. He can remove any official however high-ranking who openly defies his directive. Under Senator Bola Ahmed Tinubu, LASTMA did not need to harass motorists to be effective. And majority of people in Lagos and other States acknowledged LASTMA’s effectiveness.

Back to my earlier story about the fixing of decayed infrastructure versus the fixing of damaged humans. It is my belief, rightly or wrongly, that over-emphasis on too heavy fines and criminalization of every little infraction under the Fashola government did substantial damage to the psyche of LASTMA officials and turned them into monsters. The heaviness of the fines and the fact that it took average of a whole day to get it paid, was an effective bargaining chip for LASTMA officials who thus enriched themselves immensely and illegally at the expense of both the State and the people.

Governor Ambode should insist on LASTMA, VIO & KAI not harassing people. And this insistence should in no way stop them from performing their duties. If this open defiance continues, the governor should make examples of a few top officials to keep the underlings in line. The State cannot long afford to waste such long debilitating hours in traffic.