How NCC’s $3.2 billion fine forced MTN to slash sponsorships, entertainment budget

As MTN Nigeria struggles to pay $3.2b fine imposed on it by the Nigerian Communications Commission, the company is being forced to rethink its sponsorship initiatives.

Last week, game show, Who Wants To Be A Millionaire, announced that it was going on an indefinite break as its sole backer, MTN was ending its sponsorship of the programme.

As fans wondered why the popular show was being scrapped, its long-term host Frank Edoho put it in the simplest terms: ‘Sponsor say they no do again’.

Insiders at MTN say the move is directly connected to the drastic reduction of marketing budgets occasioned by the NCC fine.

According to a highly placed source who spoke to us under the condition of anonymity, it has simply become impossible for MTN to carry the burden of the heavy sponsorship it currently undertakes.

‘The marketing budget has been shrunk. It is a result of the NCC fine. The implication of paying that fine is will be felt across all marketing initiatives.

‘The truth of the matter is these things have implications and the implication for the fine is that the company has to prioritize its spending’.

MTN has had a rough ride in recent months – it declared a $200m loss in 2016. As a result, it relieved itself of 11 celebrity brand ambassadors that cost about one billion naira each year.

Davido, Don Jazzy, Tiwa Savage, Dr. Sid, Sound Sultan, Banky W, KCee, Harrysong, Patience Ozokwor, Timaya and Sean Tizzle were all dropped as MTN ambassadors.

As expected, it is a source of worry for several entertainment industry practitioners who fear that this will have an adverse effect on their earnings as they all depend on advertising revenue from company such as MTN.

One of such fears is for Project Fame. There are rumours that the same issue that befell Who Wants To Be A Millionaire is hovering over the talent show that has discovered many Nigerian talents. Incidentally, it is also produced by Ultima Limited which produces WWTBAM.

However our source says Project Fame would run, at least this year.

‘You know it is the tenth season so the company will do whatever it can to make sure it runs this year, although I’m not sure that it will return next year.

‘But MTN has really tried by supporting these initiatives. Even other companies who are not paying fines are finding it hard in this economy to sustain some engagements.’

The Nigerian Communications Commission fined MTN in October 2015 for failing to disconnect 5.2 million unregistered lines on their network. The NCC ordered the company to pay a fine of $1,000 per sim card, totally $5.2 billion but lowered it to $3.2 billion.

The first installment of the fine ($254 million) was paid in December 2016 and the company has two more to go.