Nigeria and Africa’s leading telecommunication network, MTN has been in the eye of the storm in Nigeria for about a year now. The fine for the failure to adhere to sim card registration requirements was the major issue they had and has now dovetailed into an accusation of illegally repatriating about $14 billion from Nigeria.
One major problem MTN has however had from when it launched in Nigeria in 2001 was it’s market dominance and often perceived anti-competitive pricing of its products. This has led to several moves by both the competition and the regulator to reduce this dominance in the hope that it will force down prices and improve customer service. There has been a bit of progress in this regard but it appears regulators believe it is not enough.
Just recently, it was reported that the NCC had remarked that the acquisition of Visafone by MTN will not include the spectrum license of the former. Their reason is no other than to discourage market dominance even when other competitors can’t raise enough funding to acquire licenses and equipment that can improve competition.
The NCC did not just stop there. They have now laid out a grand plan to stifle MTN’s market dominance.
Executive Vice Chairman/CEO, Prof Garba Umar Dambatta revealed this plan at a world press conference at the Commission’s Headquarters in Abuja to mark the one year anniversary of the unveiling the Eight Point Agenda. Here is how he described it as reported by the Nation;
MTN had a 44 per cent market share of subscribers within the market. There was also a wide differential (of about 300 per cent) between on-net and off-net calls indicative of the likely establishment of a ‘calling club for MTN subscribers.’
In the upstream market, MTN and Glo were discovered to jointly control about 62 per cent of the public terrestrial transmission infrastructure which is a bottleneck resource in the provision of voice and data services. “There are concerns that operators playing in the wholesale and retail sub segments of these markets have the leverage to “squeeze” the margins of their competitors who are also their customers,” the study noted.
The Commission then resolved that the Dominant Operator in the Mobile Voice market shall be required to separate account.
The Commission will enforce and implement accounting separation on the dominant operator-collapse of on-net and off-net retail tariffs. The differential between the on–net and off-net retail tariffs will be immediately collapsed. The tariff for on-net and off -net will be the same, and subject to periodic review.
NCC said it may require the dominant operator to submit details on specific aspects of its operations from time to time as the need arises.
For the dominant operators in the Wholesale Leased Lines and Transmission capacity, NCC promised to come up with price cap for wholesale services and price floor for retail services subject to periodic review while accounting separation will also be implemented.
Parts of the article was sourced from the Nation’s article: Visafone’s spectrum not sold to MTN, says NCC
