13 June 2012

Nigeria: MTN Denies Plan to Quit Northern Region

MTN Nigeria has denied plans that it wants to quit operating in northern Nigeria following threats to its business by militant groups and harsh operating conditions it is encountering in delivering its services to millions of subscribers there.

Information emerged yesterday that MTN, Nigeria's dominant mobile operator with over 40 million subscribers was threatening to quit northern Nigeria if the government and the telecommunications regulator, Nigerian Communications Commission (NCC) failed to address the security and operational challenges faced by mobile operating companies in the country.

According to sources, MTN whom Boko Haram militant group has threatened to blow up its facilities if it continues to help security agencies track its members may quit following the spate of bombings in Borno, Kano, Gombe, Kaduna, Jos and other cities which is making it difficult for MTN to deliver diesel to power many of the base stations in those states and cities.

However, Mr. Wale Goodluck, Corporate Services Executive, MTN Nigeria responding to text message sent to him by our correspondent told LEADERSHIP that it would not quit any of the northern states. "We are making major investment in northern Nigeria, big investments in radio and transmission.," he said.

"We cannot quit any part of Nigeria."

In its latest report on the state of the economy, Financial Derivatives Limited, Nigeria's leading research organisation said despite the telecommunications sector being the fastest-growing sector of the economy growing 32.83 per cent in the first quarter of the year with a gross domestic product (GDP) growth rate of 6.1 per cent, the market has witnessed a sharp decline in service quality in the second quarter.

Mr. Bismarck Rewane, chief executive officer of Financial Derivatives Limited, said dropped call rate has increased, interconnectivity difficulties and internet access interruption is on the rise. Customer frustration and increasing productivity gains is eroding. This cuts across the entire industry and all networks while NCC has waded in with a massive fine of N1.17bn fine.

He said MTN is a victim of vandalisation of equipment by the diesel mafia and others because some people are "Resisting change to solar energy and alternative energy sources. This would normally be a force majeure situation like in the oil industry. The industry has invested in excess of $20bn in infrastructure over 10 years. Another $2.6bn is to be spent in 2012 alone representing 70 per cent of capital expenditure (capex) spend for West and Central Africa region.

"With over 15,000 base stations, Nigeria's base station per capita is 110,000 as against 12,000 in the United Kingdom, meaning serious pressure on the network. Nigerians operators spend over N3bn on diesel and generator maintenance per month," he added.

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