Telecommunications giant MTN Nigeria is embroiled in a ₦945 million dispute with Osun State over unpaid right-of-way (RoW) fees. This ongoing conflict highlights the complex relationship between telecom operators and state governments regarding infrastructure development, regulatory enforcement, and the financial implications of RoW fees.
The dispute dates back to MTN’s agreement with O’odua Infraco Resources Limited, which MTN authorised to lay fibre optics across the region.
However, Osun State claims this agreement bypassed the state’s legal requirements for RoW payments. According to Osun State officials, MTN paid only ₦76.2 million, significantly lower than the amount mandated by the state government.
The state government insists that MTN owes an additional ₦945 million, which includes a ₦100 million penalty for non-compliance. Osun State’s position is that O’odua Infraco was unauthorised to collect these fees, and therefore, the payments made by MTN to the company do not absolve the telecom giant from its obligations to the state.
Read also: South African telcos urge Netflix to pay MTN, Vodacom, and others
The role of the Nigerian Communications Commission (NCC)
In response to the dispute, the Nigerian Communications Commission (NCC), the regulatory body overseeing telecommunications in Nigeria, has stepped in to mediate. The NCC’s involvement underscores the importance of consistent regulatory oversight in ensuring that state governments and telecom operators adhere to established agreements and legal frameworks.
The commission is tasked with resolving conflicts such as this one, which can have far-reaching implications for the telecom sector, particularly regarding infrastructure development and the expansion of digital services across Nigeria.
Right-of-way fees are a critical issue in Nigeria’s telecommunications landscape. State governments charge telecom operators for using public land to lay fibre optic cables and other infrastructure. The goal is to expand network coverage, improve service quality, and drive nationwide digital transformation.
However, disputes over these fees can hinder progress, as seen in the MTN-Osun State conflict. The state’s decision to cancel RoW fees in March 2023 was aimed at encouraging telecom companies to invest in infrastructure development. However, the ongoing dispute with MTN suggests that challenges still need to be addressed in enforcing and regulating these fees, which could slow down the much-needed expansion of digital services.
Read also: MTN finally liquidates Visafone after 9 years of long-drawn battle
Broader implications for the Telecom industry
The outcome of this dispute will likely set a precedent for how similar conflicts are resolved. It raises questions about the legal frameworks governing right-of-way fees, the role of third-party contractors like O’odua Infraco, and the responsibilities of telecom operators in adhering to state regulations.
Moreover, the conflict underscores the need for more precise guidelines and transparent processes in the telecom sector. As Nigeria continues to push for greater digital inclusion, resolving such disputes swiftly and somewhat is crucial to maintaining momentum in the country’s technological advancement.
The ₦945 million right-of-way dispute between MTN and Osun State is a complex issue with significant implications for Nigeria’s telecommunications industry. As the NCC works to mediate the conflict, the outcome will affect MTN and Osun State and set a standard for how similar disputes are handled in the future. Resolving such conflicts and establishing clear, enforceable regulations is essential for Nigeria’s digital future to thrive.