While Nigerian and other Africans’ businesses in South Africa
are being threatened by xenophobic attacks, South Africa is
lording it over other business interests in Nigeria. A good
example is MTN Nigeria, officially the dominant player in the
Nigerian telecommunications industry.
MTN Nigeria is about to increase its behemoth status by the
acquisition of a major CDMA operator, Visafone Nigeria,
which runs a 800 MHz spectrum band that provides 4G LTE
services. If pulled through, as it is very likely given that
Visafone Nigeria owner, Jim Ovia, has reportedly decided to
quit the telecommunications business in view of the impending
change of government in Nigeria, the acquisition will place
MTN Nigeria in the enviable position of being the only GSM
operator with access to this spectrum band and thereby
increasing its monopoly not only on the industry, but also the
Nigerian economy. With its tentacles spread across diverse
aspects, MTN prides itself as the ICT backbone of Nigeria,
having impact in virtually every aspect of the Nigerian socio-
economic life.
Last year, the Nigerian Communications Commission, NCC,
declared MTN Nigeria as the dominant operator in the mobile
voice segment of the market following a survey. But the
company is not content with that and is pushing further to
extend its lead into data services, which will allow it to remain
the dominant player in Nigeria for many years to come. And if
the price is a few tens of billions of Naira to take out Visafone,
then it is eager to do that.
The Nigerian government is reportedly totally against the
transaction and the potential full-blown monopoly and has told
MTN that it can’t approve such a deal that sees MTN Nigeria
digesting a million customers belonging to another Mobile
Network Operator. This move, if completed, will deepen MTN’s
dominant position and bring it deeper into monopolistic
situation whereas the government would like to encourage
better competitive conditions in the market with equality and
promotion of the smaller players, especially indigenous ones. It
will have dire consequences on the survival of other GSM
operators and also various other smaller telecom players. In the
end, the consumer will have little choices and may pay a heavy
price as a result.
MTN has close to 50 per cent of the subscriber market in
Nigeria. But its dominance is way deeper than that.
Investigations revealed that MTN has more than 80 per cent of
the revenues of all telecommunications companies in Nigeria.
It recently reported worldwide profit of $6 billion in 18
countries of operation of which roughly half of it comes from
its Nigerian operation.
The Nigerian government has been very sensitive about anti-
competitive trends in the market. It is understood that the
Central Bank of Nigeria, for example, has refused to grant MTN
a mobile money license so that it does not become the
dominant player in yet another strategic aspect of the country’s
development. This has allowed locally grown companies, such
as Paga, to flourish.
The telecom consumer is hopeful that the incoming leadership
of General Muhammadu Buhari will not allow or encourage
such acts of aggression in a market where other operators
struggle to keep up.
Nigerians haven’t yet forgotten the years of a single
telecommunications operator and their harrowing experience.
With the absence of competition under the public-owned
Nigerian Telecommunications Limited, NITEL the Nigerian
consumer paid huge prices for services that were either
epileptic or not available more often than not. It was therefore a
huge relief when GSM service was introduced in 2001 and the
revolution that has taken place since then makes for a must-
read case study in prestigious business schools.
Every thriving economy or community encourages open
market competition. However, the consumer stands to lose his/
her ability to select from a bouquet when a monopoly is in
place. By nature, the monopolist bullies the consumer into
submission, while the consumer is unable to contend because
of lack of choices. Sometimes the monopoly may not be all
encompassing; it may be limited in the sense that a single
player dominates the market to the detriment of other
competitors.
When MTN Nigeria was declared a dominant player in mobile
voice segment, specific obligations were imposed on the
company to ensure it desisted from anti-competitive behaviour
and also to ensure the sustenance of long term competition in
the telecommunications industry. But these obligations have
been observed largely in the breach.
Over the years, MTN has spread its tentacles across the
Nigerian market, moving from offering just telephony services
to being a one-stop telecommunications service entity. The
quest to increase its market share has thrown up an unhealthy
trend which, if unchecked by the industry regulator, will lead to
a monopoly and total market dominance. The effect is that the
Nigerian subscriber will lose the opportunity of having viable
options that is the hallmark of an open market economy.
This advantage poses an emerging and real threat to the
competitiveness of Nigeria’s telecommunication industry as it
potentially leaves it with a single dominant player in both the
retail voice and data markets. In the long term, the Nigerian
subscriber will pay for this in the form of higher tariffs, poor
quality of service levels, little or no incentive for innovation
and a bully service provider due to the lack of competition in
the market.
The Nigerian consumer’s ability to choose and the
opportunities to expand the Nigerian economy via the survival
of multiple businesses is no doubt under threat. The regulator
cannot afford to stand by and watch as other operators wriggle
in pains. NCC ought to carry out urgent review of the
acquisition to ensure that it hasn’t given MTN an unfair
advantage. Any other step may be detrimental to the growth of
a viable and healthy telecommunications industry in Nigeria.
Jare Oladunmoye is an Abuja-based concerned
telecommunications consumer. http://blogs.premiumtimesng.com/?p=167353

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