As Telecos Risk More Sanctions over Unsolicited Texts

The Nigerian Communications Commission has again threatened to fine telecoms operators over the incessant broadcast of unsolicited text messages. Emma Okonji writes that it is in the best interest of the operators to stop them, given their unpleasant experience from previous fines

The imposition of fines on telecoms operators by the telecoms industry regulator, the Nigerian Communications Commission (NCC) has not been palatable to the operators since the history of telecommunications in Nigeria.
Although the regulator sees it as a good measure to correct the excesses of operators, especially when directives are given, but the operators see it as punitive measure that is unnecessary and capable of generating friction between the regulator and the operators.

Penultimate week, NCC wrote 13 Mobile Network Operators (MNOs), over abuse of the use of unsolicited text messages that they broadcast to virtually every telecoms subscriber, and warned that it would penalise them if they do no put an end to it.

In the letter, NCC frowned on the situation where operators continuously broadcast unsolicited text messages to subscribers and still charge them for every text message delivered on their mobile phones and other devices, even when the subscribers do not need such messages.

Based on the incessant broadcast of unsolicited SMS, the NCC therefore threatened to fine the MNOs N5 million each and a further fine of N500,000.00 per day for as long as the contravention persists.

Going down the memory lane in the history of telecoms operations in Nigeria, fines have not meaningfully addressed the challenges in the telecoms sector, yet the NCC considers this measure as the last resort to checkmate the wrong doings of operators.

In October 2015, the NCC slammed a whopping N1.04 trillion fine on MTN Nigeria for its failure to disconnect 5.2 million improperly registered lines within the prescribed deadline.

Seven months after the fine was imposed, MTN continues to maintain that it will go out of business, should NCC compels it to pay the fine, insisting that it does not have the financial capabilities to comply.

The situation compelled MTN to challenge the powers of NCC at a law court, but later withdrew the case to enable it continue negotiations with the regulator and the federal government over the fine. Although MTN paid N50 billion as part payment, shortly after withdrawing the case from court in February this year, following the reduction of the fine by 25 per cent, from N1.04 trillion to N780 billion, the NCC and the federal government are still insisting that MTN pays the reduced fine of N780 billion.

The current situation is such that the NCC, the federal government and MTN are all still looking for the best way to resolve the matter. The situation, no doubt, has become a big test to the powers of NCC in regulating the telecoms industry.

Now that another fine looms, NCC must be careful in making another pronouncement relating to fine. Also, the operators on the other hand, must do everything possible to meet up with their obligations in order to avert another fine.

The fresh fine

Inundated with complaints from telecoms subscribers over the rising trend of unsolicited Short Message Service (SMS), otherwise known as text messages that are transmitted to them by telecoms operators and Value Added Service (VAS) providers, the NCC commenced moves to address the ugly situation through imposition of fine.
On April 19, 2016, NCC wrote 13 MNOs, informing them to stop broadcasting unsolicited text messages to subscribers henceforth, or risk sanction of fine.

Before now, NCC had only called the operators to several meetings to discuss ways on how best to reduce the messages, which subscribers complained about. Subscribers had said that such unsolicited text messages were becoming embarrassing to them.

But at forums held in Abuja and Lagos, the telecoms operators exonerated themselves and shift the blame on VAS operators. The situation continued unabated, while subscribers continued to suffer the brunt.
In the letter sent to MNOs, NCC said it there have been complaints from subscribers about the menace of unsolicited text messages as well as calls from MNOs, which have impacted negatively on consumer quality experience in the telecoms sector.

NCC said through its monitoring activities, it confirmed that though some MNOs have set up the ‘Do Not Disturb’ (DND) facility on their networks, which is a system that prevents the subscribers from receiving unsolicited text messages when subscribed to the code, the awareness by subscribers of the availability of the ‘Do Not Disturb’ facility on the MNOs networks and how to opt out of the facility is very minimal and unsatisfactory.

Citing section 53 of the Nigerian Communications Act, 2003, and the Nigerian Communications enforcement process regulations 2005, NCC issued a directive to the 13 MNOs, explaining that it shall on or before June 30, 2016, dedicate the short code 2442, for use by subscribers to opt-in to the ‘‘Do Not Disturb” database restricting unsolicited marketing messages for voice and SMS, and that it shall be mandatory on the operator to create sufficient awareness for its subscribers of the existence of the DND service on their networks.
The operators, according to the new directive, shall comply with the quarterly and reporting template prescribed by the commission to ensure feedback and compliance.

The directive, however, specified that operator-generated SMS is excluded from the DND list in as much as such messages are in conformity with the commission’s directive on timing and regularity and do not constitute a nuisance to subscribers and the subscribers shall have the right of a partial or full DND implementation.
It added that the operator-generated SMS shall comply with 8.00 a.m to 8.00 p.m stipulation of 12 hour period for sending SMS to subscribers. The directive also clarified that the opt-in process shall be free of charge.
NCC therefore, warned that failure to comply with the new directive would result in the imposition of sanction in the amount of N5 million and a further sum of N500,000.00 per day for as long as the contravention persists.
The 13 MNOs that were issued with the directive, included Starcomms, Megatech Engineering Limited, Gicell Wireless Limited, Globacom, Danjay Telecoms, Gamjitel, Multilinks, MTN, Airtel, Smile, Etisalat, Visafone and Natcom.

Previous fines

In the past, NCC had fined telecoms operators for various offences ranging from poor quality of service, inability to meet up with the Key Performance Indicators (KPIs) set aside as regulatory standard, and failure to adhere to the commission’s directives on certain regulatory standards.
Worried by the persistent poor service quality, the NCC, on May 11, 2012, sanctioned MTN, Globacom, Airtel and Etisalat, a cumulative fine of N1.17 billion, for poor service quality on their networks for the months of March and April 2012.
In April 2014, NCC, again sanctioned three out of four major network operators-MTN Nigeria, Globacom and Airtel, the sum of N647.5 million for breach of KPIs and poor service quality for the month of January 2014.

In August 2015, NCC also sanctioned four GSM operators, namely MTN, Airtel, Globacom and Etisalat, a combined fine of N120.4 million, following their contravention of NCC’s directives on SIM card deactivation.
Still in 2015, NCC fined MTN Nigeria and Globacom a total sum of N34 million for breach of the Mobile Number Portability (MNP) business rules and regulations.

NCC made the disclosure in its 2015 Q4 Compliance Monitoring and Enforcement Report.
In the report, NCC noted that of the N34 million sanction for number porting breach, Globacom was fined N22 million, while MTN was fined N12 million.

In October 2015, NCC fined MTN the sum of N1.04 trillion for refusal to comply with the NCC directives on SIM card deactivation.

According to NCC, MTN failed to comply with the directive to deactivate 5.2 million unregistered and improperly registered SIM cards on its network, despite repeated warning from NCC since September 2014.

Blaming MTN for the fine, NCC said it carried out independent investigation across networks and discovered that MTN only made a partial attempt to bar unregistered subscribers in selected areas over a few days in September 2015, when other operators had fully complied and reconciled their deactivations with the invalid registrations shared by the NCC up to four weeks earlier.

NCC’s choice of fine

NCC had repeatedly said that it does not take pleasure in fines, but that it applies fine as the last resort. Speaking on the fine of N1.04 trillion imposed on MTN, the Director, Public Affairs of NCC, Mr. Tony Ojobo, told THISDAY that the commission acted according to law, based on the number of unregistered SIM cards found on the MTN’s network, amounting to 5.2 million, despite repeated warnings from NCC, which MTN did not heed to.
“It was a difficult decision to take, but we had to act the way we acted because we are regulator that is setting the pace of telecoms regulation for other regions and we must be seen as upright in our dealings always. We have followed the law, and any regulator that follows the law, can never go wrong,” Ojobo said.

According to him, the Commission has acted in the best possible way it could as a regulator by coming out with the guidelines on SIM card deactivation in 2011, with a very stiff penalty, which they did not expect that any operator will breach because of the huge consequences.

“We made the penalty huge to discourage any motivation that would want to tempt any operator to go against it, but it was a shock to us that even at that, we could find as much as 5.2 million unregistered and improperly registered SIM cards on the MTN network, even after repeated warnings to deactivate them,” Ojobo added.

Operators’ position on fine

In all of these, telecoms operators still find it difficult to believe that fine is the best option to regulate a vibrant industry like the telecoms industry. The operators have always been reluctant to pay fines of any magnitude imposed on them. Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo told THISDAY that the idea of fine was not in the best interest of the Nigerian fast growing telecoms industry.

According to him, fines would stifle telecoms operations and divert focus. He therefore called on NCC to first look at the root causes why directives were flouted in the first instance and to also take a step further to look at the challenges of the operators and address them before ever thinking of imposing fine.
He said imposing fine on account of poor service quality was unimaginable, if the NCC failed to first address the causes of poor service quality across networks.

The issue of fine had always brought disagreement between NCC and the operators and the outcome is always sad. It is therefore imperative for both the operators and the regulator to find a common ground on how best to address issues in the telecoms industry.