NCC endorses Visafone share transfer to MTN, not licence

ITRealms:

The Nigerian Communications Commission (NCSS) has endorsed the transfer of 100 per cent shareholding in Visafone Communications Limited to MTN Communications Nigeria Limited, exclusive of “licence,” reports ITRealms.

NCC also said that decision on the possibility of Visafone license transfer to MTN is yet to be taken.  “What has been approved in the transaction is 100% shareholding not licence,” according the Director, Public Affairs at NCC, Mr. Tony Ojobo.

He said this decision was taken by virtue of Section 38 of the Nigerian Communications Act (NCA) 2003, explaining that Section 38 of the Act states inter alia “the grant of a licence shall be personal to the licencee and the licence shall not be operated by assigned, sub-licenced or transferred to any other party unless the prior written approval of the Commission has been granted.”

He said this is contrary to the speculation in a section of the media that the Nigerian Communications Commission (NCC) the regulatory agency for telecommunication had foreclosed the release of the spectrum held by Visafone to MTN.

Pointing out that this clarification has become necessary in order to allay the fears in some quarters that the frequency had been withheld by the Commission.

“The Commission is yet to meet to take a decision on the application by Visafone to transfer its licence to MTN.  The NCC has only approved the shareholding structure by 100% and not transfer of licence,” Ojobo declared.

He further explained that Visafone Communications Limited with a Universal Access Service Licence (UASL) – deploying Code Division Multiple Access (CDMA) technology applied to the NCC for an approval to effect a change in its shareholding structure by transferring 100% of its shares to MTN Nigeria.

According to him, having met all the preliminary requirements for grant of approval for change in shareholding structure, the NCC in line with its established procedure granted an Approval-In-Principle to Visafone Communications Limited, subject to fulfilment of conditions to transfer 100 per cent of its shares to MTN Nigeria.

“Having fulfilled the conditions stipulated in the “Approval-In-Principle”, the NCC, in line with its procedure granted a “Final-Approval” to Visafone for the change in its shareholding structure,” he said.

Pointing out that although Visafone applied for approval to transfer its licence to MTN, the Commission has written to Visafone, clearly stating that a decision was yet to be taken on the transfer of Visafone licence to MTN.

Chuks Egbune/GEE
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Emerging monopoly in Nigeria’s telecom industry

Opinion@ITRealms:

While nobody is against fair competition in the market place, there is a need to be concerned when an entity by virtue of its ambitious expansion plans ostensibly develops into a monopoly. That appears to be the implication of the recent development in the telecommunications sector, which has been celebrated for its competitiveness since the deregulation policy of the early 2000s.

MTN’s recent acquisition of Visafone Nigeria gives it access to valuable 800 MHz spectrum band which will enable it provide 4G LTE services. The 800MHz spectrum band is currently characterised by the presence of numerous sub-scale players who have been unable to utilise the spectrum efficiently. This acquisition places MTN in the enviable position of being the only GSM operator with access to this spectrum and thereby growing into a behemoth.

From a dominant player to a full blown monopoly, the Nigerian telecommunications consumer will be the ultimate loser. If a single operator owns all the variables in the market in which it plays, the consumer is left with little choices with the absence of real competition engendering high tariffs and possible poor quality of service.

The Nigerian telecommunications scene, specifically the GSM/CDMA telephony sub-sector, is dominated by four GSM service providers namely, MTN, Airtel, Glo and Etisalat, alongside CDMA operators which have mostly been forced out of business by alleged non-competitive regulations which favour the GSM service providers.  

 According to industry analysts, issues such as interconnect fees and limited coverage areas pushed the CDMA operators to the back seat despite offering cheaper call rates. Interconnect fees favour the networks with larger huge subscriber base. In this regard, MTN Nigeria and Airtel (then known as Econet) are better placed having enjoyed first mover advantage as pioneer GSM service providers in Nigeria.

The 800 MHz spectrum band is characterised by the presence of sub-optimal licensees who have largely been inactive over the last eight years. For the few who have remained active, their performance has been sub-optimal and most lack the financial capacity to deploy services and thus compete effectively with a behemoth like MTN. Re-farming the 800MHz spectrum to make it available for operators who have demonstrated the ability to deploy telecommunication services appeared to be a challenge for the Nigerian Communications Commission (NCC), the industry regulator, as the current licence holders in the spectrum band have been unable to meet their roll-out obligations.

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, may lead to a complete monopoly and a throwback to the pre-GSM era when the government corporation, NITEL dispensed service at its whim and caprices. This situation, industry watchers say, will not offer the Nigerian subscriber the viable options that an open market economy throws up.

In 2006, MTN Nigeria acquired VGC Telecoms, a CDMA entity with a growing subscriber base in the Lekki/Victoria Island/Ajah axis of Lagos State. MTN Nigeria purchased VGC Communications Limited (VGCCL) for $70 million (N9.3 billion). VGC has since been subsumed into MTN Nigeria, giving the company the advantage of providing both CDMA and GSM services, unlike other GSM operators.

Visafone only obtained approval for the additional spectrum this year, and two months later it sold the asset. MTN’s access to sub 1GHz spectrum to the exclusion of other leading operators provides it with an unfair competitive advantage in the data market where it can easily deploy its size and profitability to further entrench its dominance in the market and stifle other players’ ability to compete. Given that it has already been declared dominant in the transmission market, MTN’s ability to control both spectrum and access at prices it dictate to industry and consumers makes this an unhealthy development, for which the consumer will be the ultimate loser.

This advantage poses a real threat to the viability 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.

There is an urgent need for close regulatory scrutiny by the NCC in line with what obtains for any dominant operator in any market. The NCC must carry out an urgent review of the acquisition to ensure that such purchase does not give MTN an unfair advantage in the industry, which may be detrimental to the growth of a viable and healthy telecommunications industry in Nigeria.

Moses Kwambe is a consumer rights advocate based in Lagos

 

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Visafone mast collapses in Surulere

ITRealms:

A mast belonging to Visafone Communications on Sunday morning collapsed in a Lagos suburb of Surulere, reports ITRealms.

This, according to ITRealms investigations as affirmed by officials of the company was attributed to the heavy wind and downpour in Lagos over the night of Sunday.

ITRealms gathered that although no life was lost, there was absence of network and service in Surulere and environs on Visafone network until late afternoon, when the services were reportedly restored partially.

ITRealms recall that Visafone Communications Ltd emerged as a result of strategic acquisition of three (3) Code Division Multiple Access (CDMA) mobile network operators that had operations for up to 8 years with 30,000 subscribers and coverage in different parts of Nigeria, was incorporated on June 20, 2007 after its acquisition of Cellcom and received a Unified Access Service Licence as a telecom operator from the Nigerian Communications Commission (NCC) on August 1, 2007 positioned it to offer mobile, fixed and any other telecommunications service to its subscribers.

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Team Jim unveils Visafone Blackberry on CDMA

The team of Information and Communication Technologies (ICT) investors led by business mogul and chairman of Visafone Communications, Mr. Jim Ovia, on Wednesday in Lagos unveiled BlackBerry smartphone on Code Division Multiple Access (CDMA).

This was facilitated by a partnership deal struck between Visafone Communications and Research-In-Motion (RIM), the owners of BlackBerry brand.

According to the chief executive officer of Visafone, Mr. K.V. Srinivasa, said the telecom company and all its outlets nationwide as well as accredited retail shops would offer on sale the Blackberry series as from October 29th, 2012.3

Regional director at RIM for East, Central and West Africa, Mr. Waldi Wepener expressed excitement on the development and promised to support Visafone in achieving the objective in offering Blackberry on CDMA.

Some of the smartphones penciled for the deal and on offer includes BlackBerry Bold 9930, Curve 9310 and Curve 9370.

Ovia told ITRealms that he is satisfied with the partnership, hence he as an investor backed the deal 100 per cent.

 

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