MTN Group clarifies newly launched advisory board’s role amid Nigeria tax disputes (and why it matters)

Following the establishment of the International Advisory Board (IAB) amid ongoing tax dispute with Nigeria, MTN Group comes out to clarify the board's role


THE MOVE follows hot on the heels of a series of regulatory crackdowns that led to a financial loss resulting in billions of US dollars. Charged with providing recommendations to the telecoms giant regarding its duties and most importantly “social  responsibility obligations”, the board will be led by the former President Thabo Mbeki.

Explaining the construct of the newly formed board, whose members are looked upon as privileged, MTN says it takes cue from a number of leading global multinationals. Although not common in South Africa, such boards advise a number of publicly traded global companies in regards to policy related matters within telecommunications.

The non-statutory entity  will serve as a vital feedback arm for improvement of services across MTN’s entire operation. “It neither undertakes juduciary duties nor does it assume any accountability for the publicly quoted entity. IAB will not opine on any matters that have to do with the operations of the business,” the Johannesburg-based company said in a statement.

MTN Nigeria’s tax disputes paves a way for telecoms regulation

Expected to meet regularly as and when required, the IAB comprises of respected world leaders such as former heads of state and industry experts from leading global institutions. The advice they provide is not biased nor is their contribution to the industry exclusive to the companies they get into “bed” with.

To this end, IAB will convene in a non-statutory meeting twice a year. Its members will meet to unpack geopolitical shifts within telecoms and their impact on development both in Africa and the Middle East.

“This would include such development as relates to telecommunications, internet penetration and connectivity – all which constitute a vital platform for Africa and the Middle East to digitise and participate in the fourth industrial revolution.”

Given a spate of alleged wrongdoings it’s been accused of, including regulatory fines in Nigera, Rwanda, Benin and most recently South Africa by Icasa, it comes as no surprise that the JSE listed company has sought to review its foreign business dealings.

In this context, the MTN Group is of the view that its operations in 21 countries in Africa and the Middle East, made up of close to 235 million subscribers combined. Consequently these markets will be well served by IAB, in accordance with their existing operational business dynamics.

Introspection vital for telecoms 

Notwithstanding growing concerns that governments may be imposing dubious fines to tech companies in a desperate attempt to supplement their income, MTN joins several others forced to review their trade agreements in recent years.

In 2012 the Competition Tribunal slapped Telkom with a R449 million fine for abusing its dominance in the telecoms market between 1999 and 2004. Vodacom was recently forced to retract its “misleading” advertising claim of being “SA’s best network” by the Advertising Regulatory Board (ARB). In 2016, Icasa took Cell C to task over its alleged failure to follow correct procedure in the company’s recapitalisation deal with Blue Label. The deal resulted in the Cell C’s net borrowing reduced from R8 billion to below R6 billion.

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