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Why NCC should prioritize dominant-operator regulation – Ogii

By on May 22, 2013

The Nigerian Communications Commission, NCC, penultimate week, opened the telecom industry up for another debate when it released the operators’ market status and declared two, MTN and Globacom, as dominant players in different categories.

Since that declaration which came almost immediately it flagged off the Mobile Number Portability, MNP, in the country, several opinions have been raised by subscribers who charged the regulator to prioritize the regulation or risk having the sector fall back to the NITEL days of monopoly.

However, this is not the first time the commission is making attempt at stabilizing competition in the telecom market. In 2010, it attempted such exercise but it produced no positive result. But in June 2012, the NCC embarked upon what it described as the “Study of the Assessment of the Level of Competition in the Nigerian telecommunications industry.”

The broad market segments considered in the survey included Voice (Mobile and Fixed), Data (Mobile and Fixed), Upstream and Downstream. According to the findings, there are no dominant operators yet in the fixed mobile, fixed data and downstream market segments.

For voice data, MTN, which had about 47.4 million subscribers (about 43.57 per cent market share), as at December last year, was declared the dominant operator. The network, which commenced operation at the launch of the GSM liberalisation in 2001, was also announced as joint dominant operator in the upstream segment. The other network so declared was Glo, which launched its services in 2003 and had about 24.1 million subscribers (about 22.15 per cent) as at December 2012.

Going by its findings, NCC declared that there are concerns in the two market segments. For mobile voice, it states that the segment is not “effectively competitive.” Fundamentally, NCC expressed worry about the “wide differential (of about 300 per cent) between on-net and off net calls.” It goes further to warn that “this is indicative of the likely establishment of a calling hub for MTN subscribers.”

The regulatory agency also stated that the dominant operator in the mobile voice market should, among others requirements, collapse on-net and off-net retail tariffs immediately.

This is where an Aba based telecoms lawyer, Chibuzor Ogii said the regulator should assert its authority if it were serious to balance the market. “NCC should be serious when it makes pronouncements. It is one thing to appear as to the public as if it is working and another to prove that it is genuinely protecting the interest of the market. For instance, the dominant operator in the voice segment is yet to comply with the NCC directive.

Its booster weekly prepaid charge, for instance, offers on net calls at 10 kobo per second, while subscribers are charged 150 per cent more – 25 kobo per second – for calls to other networks. At 30 kobo per second for calls from the second minute till the rest of the day, its Super Saver off-net call rates appears exploitative. There is a huge difference of 200 per cent as it charged 10 kobo per second for on-net calls” he said.

The lawyer who was in Lagos at the weekend enumerated to this reporter that “other operators like Globacom, pitches its Talk-Free pre-paid package, on-net calls cost at 15 kobo per second and 18 kobo per second for off-net calls. SMS charges are the same N4 irrespective of whether the message is sent to within or outside the network.

On Glo Hi-Flier and G-BAM Hi 5ive, subscribers enjoy same 18 kobo per second charge to any network within Nigeria. But Glo is also guilty of exploitation as it charged 10 kobo per second for on-line calls on Glo Gista but 30 kobo per second for off-net calls, while Glo 1derful rates for voice calls are 15 kobo per second for on-net calls and 25 kobo off-net.

“Airtel has 2good Classic and Airtel Club 10, among other packages. For the former, voice calls have a flat rate of 18 kobo per second for calls to all national destinations, irrespective of the network. Airtel Club 10 requires subscribers to register 10 Airtel lines of family, friends or associates which would then enable calls to be made at 8.34 kobo per second. Calls to other Airtel numbers on this package cost 20 kobo per second on-net and 30 kobo per second off-net.

“Etisalat has Easy starter, among its several packages. Calls to all networks cost 50 kobo per second, while Homezone calls are charged at 40 kobo per second whether on-net or off-net. On Easycliq, calls within the network at peak period cost 40 kobo per second and a minimal increase to 50 kobo per second for off-net calls”.

For him, “having commenced the Dominant Operator policy since May 1, the NCC is expected to have ensured compliance with the new regime, particularly in the area of pricing”.

Incidentally, in his recent announcement, NCC’s Director of Public Affairs, Mr Tony Ojobo assured that the regulatory agency would deploy all necessary procedures to ensure that both companies did not use their dominant positions in the industry to stifle competition.