Moves by MTN to acquire the license and frequencies of Nigeria’s remaining Code Division Multiple Access (CDMA) operator, Visafone, has been put on hold by the Nigerian Communication Commission (NCC). This was confirmed in a call by Nairametrics to NCC’s public affairs department.
The regulator hinged the order on the need to conduct a public enquiry to enable it obtain robust views.
Recall that MTN Group had in 2016 announced that it completed the acquisition of Visafone, after supposedly meeting all the regulatory requirements. The NCC, however, later clarified that the transfer of Visafone’s shareholdings to MTN Group did not automatically mean the transfer of the licence and frequency to the mobile operator.
In other words, regulatory approvals were still required for the transfer of frequencies spectrum and other licences. Consequently, while the acquisition availed MTN Group access to the robust voice and data platforms of Visafone, it lacked access to its license and most importantly, frequencies.
More on the reason behind NCC’s action
NCC had stated that its resolve to halt the acquisition is to involve all stakeholders towards the determination of Visafone’s future. This is important, seeing as other players in the industry have continued to protest the transaction arrangement, even as worries rise about MTN’s positioning towards becoming a monopoly in the industry.
As we reported, the Nigerian Communications Commission last week announced that it would be organising a public forum in Abuja.
According to a press release by the NCC, the public inquiry finally held in Abuja on June 25th, with industry players comprised of Airtel Nigeria Limited, Glo Mobile Nigeria, 9mobile Nigeria Limited and MTN Nigeria Limited in attendance.
During the meeting, the NCC boss stated that the deliberations became imperative towards the facilitation of “informed decision on the issue”.
“this Public Inquiry is a deliberation that would lead to an informed decision consistent with the Commission’s mandate to create an enabling environment for effective competition in the industry as well as to ensure the provision of qualitative and efficient telecommunications services throughout the country.
“The Commission seeks your active participation in the deliberations that would lead to an informed decision consistent with our mandate to create an enabling environment for effective competition in the industry as well as to ensure the provision of qualitative and efficient telecommunications services throughout the country.” – Danbatta
The elephant in the room
MTN Group does play a dominant role in the Nigerian communication space. The company is the largest operator with over 60 million subscribers.
The company’s bid to acquire Visafone is part of its effort to enhance the quality of its “fat” services. It should be noted that profit margins on voice services have continued to shrink as customers move their spending to data.
MTN is also a dominant player in terms of data subscribers. Information from the NCC shows it has a large proportion of data subscribers.