Telecom
How Holder, US Lawyer Helped Cut Billions off MTN Fine
Telecoms firm MTN hired former U.S. Attorney General Eric Holder in January to help it reduce a $3.9 billion fine imposed in Nigeria over unregistered SIM cards. Five months later, it struck a deal to pay less than half of that.
The entrance of Holder, who stood down as attorney general last year after presiding over some of the largest corporate settlements in American history, marked a change of strategy for the South African company.
MTN dropped a three-month legal challenge against the fine and, according to government sources and letters seen by Reuters, asked Nigerian Attorney General Abubakar Malami to put forward a proposal for a reduced fine to the communications regulator, the official authority in the dispute.
The regulator, the Nigerian Communications Commission (NCC), rejected the proposal as unjustifiable, documents show, but three months later it accepted a broadly similar deal. Reuters was unable to determine the role, if any, that Holder played in the change of heart.
MTN, Holder, Malami and the NCC all declined to comment on the negotiation process.
There is no indication that any individuals acted improperly, and companies have often reached settlements with regulators in Nigeria.
Lawmakers have however criticised the opaque nature of the settlement process, saying it set a precedent for other firms dealing with Nigerian authorities.
The 780 billion naira fine – $3.9 billion at the exchange rate at the time – was set by the NCC in December over MTN’s failure to deactivate more than 5 million SIM cards not registered by customers. Nigeria has been trying to halt the use of unregistered cards over concerns they are being used for criminal activity, including by Islamist militant group Boko Haram.
MTN, Africa’s biggest telecoms company, initially launched a high court challenge against the fine, arguing the watchdog had no legal grounds to order it. The law states that the NCC does have the right to impose such a penalty.
In February, however, MTN withdrew the lawsuit and paid a “good faith” payment of 50 billion naira to the government which it said was part of efforts to reach an amicable settlement and would go towards the eventual fine agreed.
The NCC said at the time that it had not agreed to enter into any talks with MTN and that it stood by the 780 billion naira penalty.
Rather than dealing directly with the regulator, Holder approached Malami to help broker a settlement, according to the government sources and letters seen by Reuters.
LETTERS
In a letter dated the same day MTN announced it was dropping its court challenge – Feb. 24 – Holder wrote to Malami on behalf of the company offering to pay 300 billion naira and list MTN’s local unit on the Nigerian stock exchange to end the dispute.
Under the Nigerian constitution, the attorney general can mediate in a dispute involving a state body after the matter has been taken to court.
Malami asked NCC to review the MTN offer but the regulator was not impressed, according to another letter seen by Reuters.
“The proposal to pay the sum of 300 billion naira … is not supported by any verifiable justification,” NCC Chief Executive Umar Garba Danbatta said in a March 1 letter to Malami.
Nor was the NCC convinced by MTN’s sweetener of a local listing. “This is a business decision absolutely within MTN’s prerogative and primarily to its benefit. There is no justification for bringing this along in discussing the present issue,” Danbatta said.
But when MTN announced on June 10 that it reached a deal with the government to pay a fine of 330 billion naira – just 30 billion naira more – the NCC appeared to have altered its view, notifying parliament in a letter dated the same day of a “full and final” settlement.
“It was never about the money it was about making clear the rules are the rules,” NCC spokesman Tony Ojobo told Reuters on June 13. “The MTN listing is a big positive for Nigeria and will benefit the country.”
When asked about the March 1 letter and what had changed the NCC’s view, Ojobo said he would not discuss the negotiations.
A parliamentary committee on telecommunications is reviewing the deal and the negotiations that led to it. Such reviews by lawmakers are standard practice after big corporate settlements and are aimed at ensuring that there has been no wrongdoing by any party involved and that the public interest has been served.
“What concerns us most is what MTN proposes in February is so similar to what is agreed in June. It is clear MTN were dictating the pace,” committee chairman Saheed Akinade-Fijabi told Reuters.
“What does this say to other businesses? That to get the best deal you use unofficial back channels and keep the public in the dark?”
DIVISIONS
The deal has exposed divisions within the Nigerian government; officials within President Muhammadu Buhari’s team were also unhappy with Malami’s plans to strike a deal with MTN which they considered too generous, leading to heated discussions between the two camps, two government sources said.
There has been no official comment from Buhari on the settlement.
Holder was hired by MTN through his Washington-based law firm Covington and Burling which he joined last year after six years as U.S. attorney general.
Settlements he presided over in public office included the $13 billion JPMorgan Chase paid to settle charges of mis-selling mortgages in the run-up to the financial crisis and the BP Deepwater Horizon oil spill case, which has topped $20 billion.
It is unclear whether Holder has been based in Nigeria during his time working for MTN, which counts Nigeria as its biggest market. It also is unclear whether he still advises MTN. Covington and Burling declined to comment.
Following the settlement MTN’s share price, which had fallen around 30 percent between a fine being announced and Holder being hired, has risen by around 25 percent.
In a recent revelation from the Nigerian Communications Commission (NCC), Airtel Nigeria has emerged as a standout performer in the country’s telecommunications sector, marking significant gains in market share over the past year.
According to the NCC data, by the end of March 2024, Airtel Nigeria has grown its market share over the last year into a remarkable 29%, solidifying its position as a leading telecom provider in the region.
In stark contrast, other mobile network operators such as MTN and 9mobile have faced considerable setbacks, with MTN witnessing a notable 3.19% decline in market share and 9mobile experiencing a 0.5% decrease.
Even Glo, a prominent player in the market, saw a decline, albeit less pronounced, with a 0.58% drop in its share of internet subscribers.
Airtel Nigeria’s success story goes beyond market share gains. The company has also witnessed a substantial surge in its share of internet subscribers, boasting an impressive 165% basis points increase.
This surge correlates with the launch of Airtel 5G, which the company began rolling out in June 2023 and underscores the telco’s continued push to grow its customer base nationwide.
Airtel Nigeria’s ascendancy in the telecom market comes at a pivotal moment when mobile network operators face challenges of rising operations cost and exchange rates volatility. The company’s recent results solidify its position as a frontrunner in Nigeria’s telecom landscape.
Google Developer Groups Lagos (GDGLagos) has announced a regional edition of the global #BuildWithAI hackathon, in partnership with SeerBit, Africa’s most trusted payment solutions provider and GOMYCODE.
This hackathon, taking place on Saturday, April 27th and Wednesday, May 1st, 2024, will empower participants to explore Google’s AI tools, Gemini and Vertex AI and develop innovative solutions for real-world challenges.
“We are excited to partner with Seerbit and GoMyCode to bring the #BuildWithAI hackathon to Lagos,” says Co-Organizer, GDGLagos, Femi Taiwo. “This event fosters innovation and empowers individuals to use AI to solve real-world problems. We encourage everyone interested in AI to join us for this inspiring event.”
Founder & CEO of SeerBit, Omoniyi Kolade articulated the profound impact of this collaboration, stating, “At SeerBit, we are committed to pioneering innovative solutions that enhance financial security and foster trust in digital transactions. Collaborating with GDG Lagos amplifies our quest to combat fraud effectively. Together, we aim to empower developers to harness the power of technology for the greater good, ultimately benefiting society as a whole.”
“At GOMYCODE, we are committed to unlocking the potential of innovators across Nigeria and beyond through accessible technology education. The ‘Build With AI’ hackathon with Google Developer Groups Lagos offers a hands-on chance for innovators to use AI for real-world solutions. We’re excited to create a space where technology meets creativity, empowering participants to actively shape the future,” Country Head, GOMYCODE Nigeria, Babatunde Olaifa said.
The #BuildWithAI hackathon aligns with Google’s global initiative to democratize access to AI technology. This regional event in Lagos offers a unique opportunity for developers, data scientists, designers, students, and anyone curious about AI to:
- Gain hands-on experience with Google’s cutting-edge AI tools, Gemini and Vertex AI.
- Tackle real-world challenges across various sectors like sustainability, finance, education, healthcare, and social good.
- Leverage SeerBit’s expertise in digital payments to create solutions with tangible applications.
- Develop in-demand skills with the support of GoMyCode’s training resources.
- Collaborate in teams and network with fellow AI enthusiasts.
- Compete for a chance to win a cash prize of NGN 1,000,000, office space to further develop their winning solution, and the opportunity to partner with SeerBit, with NGN 500,000 and NGN 250,000 for second and third place respectively.
The GDGLagos #BuildWithAI hackathon serves as a springboard for the global Google AI Hackathon, taking place online. This international event focuses on pushing the boundaries of what Generative AI apps can do with Gemini. Participants in the Lagos event are highly encouraged to consider entering the global competition as well.
GDGLagos will provide ongoing support and guidance to the regional winner as they prepare to compete on the global stage. This includes access to mentorship, resources and technical expertise to help them refine their solution and showcase their talent to a worldwide audience.
Startup founders, experienced developers, data scientists and expert resources and designated mentors will be available during the hackathon to provide guidance, refine ideas, answer questions and offer technical support to participants. This ensures they receive the necessary guidance to tackle the challenges and bring their innovative ideas to life.
Telecommunications service provider, Airtel Nigeria has collaborated with the Nigeria Institute of Public Relations (NIPR) to provide with unlimited internet access at the institute’s inaugural edition of the Nigeria Public Relations Week.
The trailblazing event themed ‘Leveraging Public Relations as a Critical Asset for Nigeria’s Economic and Reputation Renaissance’ is set to run from Monday, April 22nd to Friday, April 26th, 2024, and will welcome thousands of delegates across Nigeria to the prestigious June 12 Cultural Centre, nestled in the heart of Abeokuta, the Ogun State capital.
Speaking on the strategic collaboration, Femi Adeniran, Director, Corporate Communications and CSR, Airtel Nigeria, expressed enthusiasm about the partnership, stating, “Airtel is proud to support the Nigeria Institute of Public Relations in its endeavor to advance the field of public relations.
“The relevance of public relations practice in Nigeria cannot be overstated, as it plays a vital role in shaping perceptions, managing reputations, and influencing public opinion. Hence, our support is a demonstration of our commitment to empowering individuals and organizations with innovative solutions that drive progress and create an enabling society.”
According to NIPR, through the PRWeek Organizing \Committee Chairman, Mr Yomi Badejo Okusanya, the NPRW will gather over 2,000 experts in the fields of economics, PR, and nation-building to discuss strategies for effectively communicating government policies and initiatives to the public.
Other activities at the NPRW will include conferences, the annual general meeting, workshops, induction of new members, breakout sessions with students as well as traditional rulers and a tour of some legacy projects in Ogun state.
With Airtel’s provision of onsite unlimited data connection, attendees and participants can enjoy unparalleled access to online resources, real-time updates, and interactive engagements throughout the duration of the event. This will significantly support the exchange of ideas, foster networking opportunities, and elevate the overall experience for all stakeholders involved.
Airtel Nigeria remains committed to offering unwavering support for initiatives aimed at driving innovation, collaboration, and nation-building.
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