Nigeria: House of Representatives Accuses MTN, Econet of Fraud

16 July 2002 – The House of Representatives’ committee investigating the operations of Nigerian GSM providers has accused MTN and Econet of defrauding subscribers of N12 billion, according to a report by AllAfrica.com. The losses incurred by subscribers were due to characteristics of the billing system used by the GSM operators.

In its report to the House, the committee recommended that the Minister of Communications and the National Communications Commission (NCC) should ensure that the money is refunded to subscribers by the two operators. The committee, in conjunction with its technical consultants, has "computed the cost to Nigerians of the average time loss per user."

"The computation based on the pre-paid service of both MTN and Econet, being the more generally subscribed of their packages showed that subscribers lose a third of the call-time guaranteed by their respective refill cards due to the arbitrariness of the billing system.

"Consequently, for every refill card purchased, the subscribers lose on the average the sum of N500 in the case of MTN and N333 to Econet. When these base figures are applied to the declared profits by MTN recently, the company would be seen to have defrauded subscribers in Nigeria of about N6 billion.

"The House of Representatives urges the Minister of Communications and the NCC to ensure at the best possible mode for the refund by MTN and Econet to subscribers of the approximate sum of N12 billion fraudulently obtained through their deceptive billing system."

The Committee developed a number of other recommendations, including: