The Minister of Communication in Nigeria is using telecoms companies to force Nigerians to get national identity numbers.
MTN’s shares fell as much as 11.5% yesterday on concern over Nigeria’s decision to freeze the issue of all new SIM cards pending an audit. Before yesterday’s decline, it’s stock had recovered slightly from last Friday’s 10% tumble when news of the directive broke.
The move has been driven by the Minister of Communications, which has taken control of the National Identity Management Commission (NIMC). Only about 1 in 4 Nigerians have a National Identity Number (NIN) and it wants to increase this and create a centralised identifiable database using the logistical infrastructure and reach of the telecoms industry.
On a teleconference yesterday, MTN said all telecoms operators in Nigeria were notified by the Nigerian Communications Commission (NCC) of the audit on 7 December and were directed to suspend the sale and activation of new SIM cards until it was complete. Following a meeting with the Minister of Communications on Monday, they were told to update the SIM registration of subscribers to reflect the identity numbers by 30 December and to block any SIMs without them.
In a similar audit process last year, MTN said it disconnected about 600,000 SIMs that weren’t re-registered ahead of the deadline. However, it said the issue of capturing identity numbers was not previously required. In 2015, the company was hit with a $5.2 billion fine for failing to disconnect millions of unregistered SIM cards in Nigeria. The fine was later reduced by about two-thirds.
Needless to say, SIM registration is part of our enterprise-wide focus in terms of risk, and compliance falls within “low to no” tolerance in terms of our risk preference framework,” Group CEO Ralph Mupita said. “The current SIM registration suspension and audit is being done in a difficult period where the nation has been dealing with security challenges and the Covid-19 pandemic.”
MTN Nigeria CEO Ferdi Moolman said the company had been granted a NIN licence and had upgraded its equipment to enable it to register the ID numbers. He said the system would support Know Your Client (KYC) regulations and was a big step in the right direction.
So, going forward we will have the ability to not only ensure that NIN is available when a SIM is sold but we will also be able to Register a Nigerian for a NIN,” Mooman said.
In the meantime, MTN said it couldn’t add any new subscribers but neither could its competitors, suggesting that market shares should remain relatively stable. While the earnings impact was difficult to estimate, it said the move would contribute to a more sustainable registration process. However, with about 208 million registered SIM cards in Nigeria and only about 40-60 million NINs registered on the NIMC database, the company said a mammoth task lay ahead.
Its shares retraced some of their losses to close 7.3% down at R61.44.
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