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MTN pledges compliance amid legal, administrative storm

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 10 Mar 2021

MTN Group has committed to respect and comply with laws in the countries it has a footprint, as the telco is facing mounting legal and regulatory hurdles in five jurisdictions.

MTN has pending court cases in SA, the US and Syria, while facing off with regulators in Nigeria and Ghana over administrative matters.

Updating shareholders and the markets today on these cases, Africa’s largest mobile network operator says MTN conducts its business in a responsible and compliant manner in all its territories and will defend its position where necessary.

In its home market, SA, MTN is battling regulator ICASA in court over spectrum allocation.

MTN is challenging ICASA’s decision to implement an auction structure that creates two categories of mobile operators, namely Tier 1 and Tier 2, and the use of an opt-in auction round in which Tier 1 operators will not be allowed to participate.

“Given its desire not to delay the process, MTN SA has addressed the matter to the court on an urgent basis. MTN SA remains committed to reaching a constructive resolution on this matter and looks forward to the release of high-demand spectrum,” says the telco.

According to MTN, the South African action is premised on two fundamental concerns.

“Firstly, the definitions used to differentiate a Tier 1 operator from the Tier 2 operator are, amongst others, impermissibly vague, arbitrary and unreasonable. Secondly, ICASA has included the highly sought-after 3.5GHz band (that is optimal for 5G usage) in the portfolios that are available during the opt-in round.

“The categorisation and opt-in structure of the auction have created a very real outcome where MTN would be unable to bid for any of the 3.5GHz, due to the bulk of the spectrum having been taken up by the Tier 2 operators in the initial opt-in round.”

Trouble in paradise

In Nigeria, MTN Group's biggest and most profitable market, the telco is engaging with the National Communications Commission (NCC), which suspended the sale and activation of new SIMs for all operators in December.

The NCC further directed operators to update SIM registration records with national identification numbers (NINs) for every SIM connected to networks in Nigeria, with the current deadline to complete this specified as 6 April 2021.

MTN says it has embraced the opportunity to play a more meaningful role in driving a solution for this issue and establish a sustainable and more reliable SIM registration process in the country.

“As at 28 February 2021, 37.2million (or 48.7%) of the MTN Nigeria subscriber base had submitted their NINs. These submissions remain subject to verification against the National Identification Management Commission (NIMC) database to complete the registration.

“MTN Nigeria has been granted a licence to enrol citizens for new NINs and is scaling up its capacity to do so in collaboration with NIMC.

“In that context, MTN Nigeria is engaging with the authorities and industry stakeholders in the country to resume new SIM registration as soon as possible.”

The US connection

In Afghanistan, MTN is facing an anti-terrorism complaint.

American families are suing the telco, saying for more than a decade, MTN has been integral to the Taliban’s terrorist campaign against Americans in Afghanistan.

The SA-headquartered mobile operator entered the Afghan market in 2006, in the midst of an escalating insurgency, and it soon grew to become the country’s dominant mobile provider.

Today, the company told shareholders: “MTN conducts its business in a responsible and compliant manner in all its territories and will defend its position where necessary.

“MTN reiterates its position that the plaintiff’s case should be dismissed because the plaintiffs cannot establish jurisdiction over MTN in the United States or plead a viable claim under the US Anti-Terrorism Act.”

Turning to Ghana, MTN says the National Communications Authority (NCA) classified MTN Ghana as a significant market power and determined it would be subject to special regulatory restrictions.

The company cautioned today that MTN remains in constructive discussions with the NCA in order to pave the way for an amicable resolution, adding that these discussions are ongoing and the market will be updated on any significant developments.

Lastly, in Syria where MTN was placed under judicial guardianship, the company says it strongly disagrees with the court’s decision to appoint a judicial guardian over MTN Syria and filed an appeal this month to remove the judicial guardian.

According to the court order, the judicial guardian took over responsibility for managing the day-to-day operations of MTN Syria. MTN Syria remains a going concern.

However, MTN Group says it is committed to continued compliance with all applicable laws and continues to monitor all developments to ensure it acts in accordance with applicable laws.