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Saturday, July 25, 2015

Telecom Regulation In whose interest?




There is an unsavoury battle in the Nigerian telecommunications sector that is being made to look like the ‘big’ player against the rest of the field. And the moderator appears to have taken side to give advantage to the already privileged. Sadly, if the situation is not redressed, the Nigerian telecommunications consumer stands the risk of losing out ultimately.

In other to ensure a level playing field for all the telecommunications operators, the Nigerian Communications Commission (NCC) embarked on a survey in 2012. The primary objective of that study was to determine the level of competition in the industry. The result was the conferment of the status on MTN Nigeria as the “Dominant Operator in the Retail Mobile Voice Market” segment of the telecommunication industry in 2013. Arising from that, MTN was directed to immediately collapse the differential between the on-net and off-net retail voice tariffs. Two years later, however, NCC has taken a shocking decision to reverse the situation to the detriment of the other telecommunications operators.

Three months ago, NCC approved a decision allowing a 30 per cent differential between the on-net and off-net retail voice tariff for MTN Nigeria. That clearly was in contravention of the obligation imposed on MTN Nigeria under the Determination of Dominance Regulation to collapse its retail voice on-net and off-net tariffs and ensure both tariffs are at par.

In approbating and reprobating in the same breath, NCC breached the rule of engagement with the operators as provided in the National Communications Act 2003 No 19 and the Consumer Code of Practice Regulations 2007. It acted without consultation with the industry stakeholders and had little or no consideration for the investment of the operators as well as the interest of the consumers.

Fundamentally, the NCC was required to undertake a public review of the market in consultation with the industry stakeholders. Indeed, the 2012-13 exercise by the same NCC, which revealed that MTN Nigeria had undue advantage over its competitors, witnessed series of consultations with the operators and stakeholder engagements. It is therefore curious that NCC failed to go the same route required by its status this time.

Whose interest is the NCC and its leadership serving? Clearly not that of the consumer who will be denied the option of choices if the other players are frustrated out of the market. Without a breathing space for all the players in the industry, Nigeria may be unwittingly making a slow but steady return to the days of a monopoly, represented by the humongous Nigerian Telecommunications Limited (NITEL), that delivered epileptic service to the consumer.

The failure of the NCC to follow due process to curtail a looming monopoly raises concerns as the regulatory agency is obligated to promote fair competition and prevent the misuse of market power or anti-competitive practices by any licensee. Investors craving strict adherence to regulations to guide their investment decisions are bound to be disturbed where the industry regulator undertakes far reaching decisions without transparently engaging with the stakeholders who will be affected by its actions.

One wonders why the NCC made a complete turn-around even when its own survey had confirmed that one of the operators has an undue advantage. Is the NCC playing its statutory role as the industry regulator or is it acting out a prepared script to favour a particular section of the Nigerian telecommunications industry and put the Nigerian consumer at the risk of a monopoly?

For an economy to thrive, it must encourage a level playing field. MTN has already assumed the status of a monolith running Nigeria’s ICT backbone. The financial and allied sectors are at it behest for its crucial operation. The action of NCC will only empower the company the more and stifle competition in the telecommunications sector. When a single company is directly or indirectly propped up to dominate the market, when we shut out competition, which often results in high prices and inferior products, we are putting the end user in dire straight.

The failure of the NCC to follow due process has raised concerns among industry stakeholders as the commission has an obligation to promote fair competition and prevent the misuse of market power or anti-competitive practices by any licensee. Investors craving regulatory certainty to guide their decisions will certainly be disturbed where the industry regulator undertakes far reaching actions without transparently engaging with industry stakeholders that may be affected by its policy. 

NCC ought to ensure a level playing field.  It should refrain from demonstrating bias towards any operator.

By Sokari John, a consumer rights activist, writes from Port Harcourt
 

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