The Nigerian government plans a major shakedown of MTN Nigeria operations after a probe revealed that the South African mobile phone company’s control of 44 per cent of mobile voice telephony service undermines competition in the telecoms industry. MTN Nigeria has been declared dominant operator in the mobile voice telephony voice business by the Nigerian Communications Commission (NCC) and the company will be forced to review its call rates as part of the tougher scrutiny to be imposed on its operations as from May 1, this year by the telecoms regulator.
Eugene Juwah, executive vice chairman, Nigerian Communications Commission (NCC), who announced the “Determinations of Dominance in Selected Communications Markets in Nigeria” that comes into force from May 1, this year, says that it was the outcome of a study conducted to check abuse of dominant market power by operators and ensure that Nigerian consumers get a better deal. Juwah said that the implications of the declaration on MTN Nigeria will see its operations coming under stricter regulatory scrutiny to guard against abuse of its market position in the mobile voice telephony.
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The regulatory determination is part of a widespread shakeout in the telecoms market where the regulator says that anti-competitive acts by the big players have stifled open competition in the marketplace. Juwah pointed out that MTN Nigeria has 44 per cent market share of the mobile voice telephony market while there is also a wide differential of about 300 per cent between on-net and off-net calls “and this is indicative of the likely establishment of a calling club for MTN subscribers.” The implications of designating MTN Nigeria a “Dominant Operator” in the mobile voice segment of the Nigerian telecoms market is that NCC will now impose regulatory sanction.
This entails that the telecoms regulator will now enforce and implement Accounting separation of the South African mobile phone company, the regulator said. NCC said it will take steps to collapse the on-net and off-net retail tariffs for MTN Nigeria whereby the differences between the two rates will become and remain the same. MTN’s operations in Nigeria will also come under stricter regulatory scrutiny as the newly-designated dominant operator will be required by NCC, “to submit details on specific aspects of its operations from time to time as the need arises.” Following the ruling, NCC said that it will also undertake “a determination of pricing principles to address the rates charged for on-net and off-net voice calls for other operators.”
