Transcript of MTN Group call on

NIN registration update

Date: 8 April 2022

MTN Group

NIN Registration Update

8 April 2022

Operator

Good day ladies and gentlemen and welcome to the MN update on NIN registration. All participants will be in listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal for an operator by pressing * then 0. Please also note this call is being recorded. I would now like to turn the conference over to Thato Motlanthe. Please go ahead, sir.

Thato Motlanthe

Thanks very much, Claudia, and good afternoon to everybody and thank you for joining us on this call on a Friday afternoon to discuss the developments around the NIN SIM directive in Nigeria. My name is Thato Motlanthe, Head of Group Investor Relations for MTN. We have a few of our leadership on the call with us today. I will just run through them.

Ralph Mupita, MTN Group CEO; Tsholofelo Molefe, Group CFO; Karl Toriola, MTN Nigeria CEO; Modupe Kadri, MTN Nigeria CFO; Hassan Jaber, MTN Nigeria COO; Adia Sowho, who is MTN Nigeria Chief Marketing Officer; Mazen Mroue, who is now Group CTIO but formerly MTN Nigeria COO; Ferdi Moolman, Group Chief Risk Officer, and we've also got Chima Nwaokoma who manages Investor Relations in Nigeria.

This call is scheduled for one hour. Ralph will outline the agenda and context before we get into the nuts and bolts of the issues at hand. On that note, let me hand over to Ralph.

Ralph Mupita

Thanks Thato and a very good afternoon from me as well. Thank you all for joining us for this call late Friday afternoon in Johannesburg. As Thato has mentioned, I will start off with some context for the call. We have our Group and MTN Nigeria colleagues joining me as well who will unpack some of the detail. In terms of the agenda for this call we will run through eight items as follows:

The first is on the security situation in Nigeria and how it may provide some context to the current state of play. The second would be the background to the directive from the Nigeria Communications Commission, NCC, and what it means. The third is how we have implemented the directive at MTN Nigeria. Karl will take us through that. We will then provide directional colour on the pro forma potential impacts on the business from implementation of the directive. That's topic number four. For topic five we will share some insight, again directional colour, on the directive's impact on some of the KPIs.

2

MTN Group

NIN Registration Update

8 April 2022

Number six, we will talk about how MTN Nigeria provides support to the Nigerian government's effort to speed up NIN-SIM linkages. On the seventh topic, Karl will just provide some insight into the engagements we've had with our regulators in Nigeria including the Minister of Communications. And finally, just a reminder of how the NIN registration process actually works. I will begin with topics one and two before handing over to Karl for more details on the other issues.

The background and context. If you cast your mind back to December 2020 you will recall that the key catalysts for the implementation of the current regulations on NIN-SIM registration was in large part driven by security concerns. On 15 December 2020, the NCC directed all operators to update SIM registration records with valid NINs with an initial deadline of 30 December 2020. We agreed that this was necessary to build a reliable and sustainable identity management system, a critical enabler that will deliver multiple benefits to the telecommunications industry and Nigeria as a whole. In the long term, it will aid national economic planning and enhance security, governance, service delivery and the build-out of a digital ecosystem.

You will all recall that this deadline for NIN updates was extended several times over the course of the past year due to logistical challenges in meeting the deadlines and issues encountered during the integration process. So as context for now - and some of you may be asking why the registration deadline was not extended this time around - you may have read about the train that was hijacked in north-west Nigeria last week on 30th March.

Sadly, a number of people from the incident have since been missing. This was then followed by the developments that brought us to where we are today. We believe - and the information we have managed to gather supports this - that this provides further understanding to the decision that has been made by the Federal Government of Nigeria and the directive that came through the NCC.

The second item on the agenda is on the current directive itself. It will be useful to run through the sequence of events that have brought us here which can provide more colour. As I mentioned earlier on, a train was hijacked in north-west Nigeria on the 30th. Then on the 31st March was the latest deadline for NIN registration. And the NCC came out with a press release on 1st April to urge all citizens and legal residents in Nigeria to use the next few days to submit their NINs as soon as possible. They also directed NIMC to offer enrolment services around the clock also for the next few days.

At that stage they had not defined what would constitute 'the next few days'. On Monday 4th April the NCC issued a further press statement confirming that the Federal Government of Nigeria had

3

MTN Group

NIN Registration Update

8 April 2022

determined that the NIN SIM policy implementation can proceed as machinery had already been put in place to ensure compliance by citizens and legal residents. This also confirmed that the NIN registration deadline would not be extended and that all telecommunications operators in Nigeria would be instructed to bar outgoing calls for telephone lines that had not complied with the NIN SIM linkage policy from 4 April 2022.

The NCC once again urged affected individuals to link their NINs, and the Minister once again extended his thanks to telecom operators for their support in achieving the progress to date.

MTN Nigeria then received a formal letter on the evening of 4th April instructing that the company should implement a phased suspension of services to SIMs that are not associated with NINs with effect from 4th April. Secondly, that impacted SIMs should be placed on 'receive-only' with immediate effect. And third, restore connectivity to impacted SIMs only after the owners link their NINs to the SIMs.

So I hope this provides some broad context to the latest developments. We believe the government and regulators of Nigeria remain very constructive regarding SIM registration regulations. They are affording subscribers who have not yet linked their NINs time to do so and without instructing a complete disconnection. At this stage we have not been advised what a phased implementation looks like, and we continue our engagements with authorities in Nigeria. So with that as context let me hand over to Karl, the CEO of MTN Nigeria, to run you through some of the agenda items that I mentioned earlier. Karl, over to you.

Karl Toriola

Thank you, Ralph, and good afternoon to everyone. We appreciate your time on this call. I will run through items three to eight on the agenda outlined by Ralph, namely the implementation of the directive, pro forma impact, insights on early trends and support to the government.

On the implementation of the directive, getting into how we implemented the directive, following the NCC's letter we implemented the instruction and sought clarification where it was necessary. From 4th April we applied the 'receive-only' instruction to the stipulated subscribers who had not yet submitted their NINs and placed restrictions on their outgoing voice and SMS services.

In our requests for clarification, the NCC indicated that we should hold off any action on restricting data services until they revert with clarification. We subsequently received clarification on the night of the 5th April where the NCC indicated the following:

4

MTN Group

NIN Registration Update

8 April 2022

Only subscribers who have not submitted their NINs shall be barred, and barring is for outgoing calls only. As such, data services and SMS are exempted.

The basis of the directive is thus based on submission of NINs and not verification, which is done by the National Identity Management Commission, which I will refer to as NIMC. Again, barring is restricted only to outgoing circuit switch calls.

Unbarring of subscribers who are restricted should only be upon successful verification of the NIN in line with the revised national identity policy for SIM card registration.

And the directive should be implemented on all classes of subscribers except SIMs belonging to embassies and diplomatic missions.

Based on the clarification, all SIMs registered to embassies and diplomats that had been inadvertently barred were consequently unbarred, and the restriction on SMS was lifted for the affected subscribers who had previously been barred from sending outgoing SMS.

To be clear, the current implementation of the directive affects all subscribers whose NINs have not been linked to SIMs, except embassies and diplomatic missions. The restriction is outgoing circuit switch voice only. This cohort has access to all other services including data.

Consequently, we restricted outgoing voice services for approximately 19 million subscribers in line with the directive on 4th April.

If I turn to the pro forma impact on subscribers and financials, or more accurately exposures, we consistently disclose our progress in terms of NIN submission and linkages, and you have seen from the announcement this week that we have provided an update on this. We noted that 47 million subscribers had submitted their NINs by 31st March and there were quite a few who submitted consequently between then and 4th April. This represents about 67% of MTN Nigeria's subscriber base and 76% of service revenue. We also noted that based on the NCC directive, the outgoing voice revenue exposure of the affected subscribers is approximately 9% on an annualised basis.

Let me continue onto the fifth point which is an insight into the trends we have seen since implementing the NCC directive since the night of Monday 4th April. Of course, there are very short-term trends, but if we look firstly at subscriber trends, as mentioned we restricted approximately 19 million SIMs while 51 million had submitted their NINs before the directive came into effect on 4th April. We are supporting the NIMC with equipment for specifically distributed

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

MTN Group Ltd. published this content on 28 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2022 05:43:22 UTC.