Editor’s Note: This opinion piece was written by Williams Rola, a systems analyst based in Lagos, Nigeria.
The negative effects of the recent confusion and controversy created by the nation’s telecom sector regulator, the Nigerian Communications Commission (NCC) may live with the telecoms industry for a long time to come.
Operators and the general public comprising subscribers and employees alike will be left with dire consequences.
Since the introduction of GSM communication in 2001, the nation has seen the rise of four major telecom companies, with several other smaller players trying to make a name or secure their entrance into the biggest economy in Africa.
The recent approval by NCC to sell Visafone Nigeria, with its 800MHz spectrum to MTN is causing ripples within the telecoms sector because spectrum is the lifeblood of the telecoms sector as it determines the type and quality of service an operator can offer. It also largely determines the cost of rolling out services.
The implication of that decision, which has now become unpopular among industry experts, is that MTN, will be able to provide 4G LTE services using Visafone’s 800MHz spectrum with little or no competition since its main competitors do not have the spectrum required to offer 4G services. Other GSM companies only have spectrum which can be used to offer outdated 2G and 3G services.
MTN had been declared a dominant operator in the mobile voice category of the telecom sector following a 2013 research conducted by NCC. The research also found that MTN was exploiting its size to harm its competitors.
According to sources, there is a growing concern among the operators about possible job losses as a result of MTN’s recent acquisition of Visafone’s 800MHz spectrum.
“MTN is now set to be a dominant player in the mobile data services market; operators are complaining that competition will be stifled but it is important to point that in addition to that, there will be widespread socio-economic implications as well,” observed Abubakar Tahir, a manager with a CDMA company in Lagos.
According to data provided by The National Bureau of Statistics (NBS) the nation’s unemployment rate rose in the second quarter of 2015 to 8.2 per cent from the 7.5 per cent which was recorded in the preceding quarter. Tahir said that the government should consider the plight of those employees who lost their jobs as a result of the Visafone acquisition.
MTN’s access to the 700MHz and 800MHz spectrum is still a threat to people like us who work with the small players. No CDMA operator can compete with MTN; even those that are currently providing 4G LTE are not immune to the problems that this acquisition brings.
As it is we are not in a position to compete effectively with MTN but if there were more operators involved, then there market can be better controlled; there will be a limit to what the dominant operator can do to oppress smaller operators.
MTN can easily wipe out other operators from the market because operators with similar spectrum (700MHz and 800MHz) don’t have the capacity to compete with MTN and the GSM operators that could match them have been shut out of from accessing the spectrum.
We know what MTN has done with its market power in the past; charging excessive tariffs and giving very little back. The effect will not be felt in just high data charges, there will be many job losses as competitors fold up because they cannot compete fairly.
Besides, there are no restrictions on MTN to ensure that it does not engage in anti-competitive practices. There is an imbalance in the market now; NCC should really have thought this through.
It is about time the NCC realises that the role of the regulator is to cater for all stakeholder interests. Tahir further stressed that the NCC needs to swallow its pride and reverse its approval for MTN Nigeria to acquire Visafone.