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GSM Big Three, MTN, Globacom and Airtel, get regulatory clearance over alleged market dominance

GSM Big Three, MTN, Globacom and Airtel, get regulatory clearance over alleged market dominance
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By Bola Abbas

Mike Adenuga jr
Mike Adenuga Jr, Chairman of Globacom

Lagos. October 14, 2012: The Big Three GSM networks: MTN Nigeria, Globacom and Airtel Nigeria have been cleared of accusations of exploiting their dominant mobile telephony market share to lessen competition in the telecoms industry, the report of a 2010 probe released by the telecoms regulator has revealed.

The report of the five-month investigation by the Nigerian Communications Commission (NCC) has concluded noting that it has uncovered no evidence of detrimental dominance in the practices of the three of the major players in the telecoms industry.

According to the telecoms umpire, no anti-competitive practice exist either in the telecoms sector or by the sole supplier of data bandwidth from the International Internet Connectivity market by these players in the probe report recently made public by NCC that had sought to probe if the Big Three lessen competition to the detriment of their competitors, subscribers and in contravention of the law.

According to the outcome of the NCC probe, “no licensed telecoms operator “currently holds a position of market dominance in the mobile telephone services market, including the licensees with leading market shares, MTN, Airtel (Zain) and Glo mobile (Globacom).”

It adds that, no group of two or more licensees currently hold a position of joint or collective dominance in that market, while citing that NCC “has not found any conclusive evidence that any of the mobile licensees are engaging in conduct which has the purpose or effect of substantially lessening competition.”

The investigation report was compiled in March, 2010 but was only recently made public by the regulator which says it has examined accusations by subscribers, other operators and NCC’s suspicions of the exploitation of their dominant market share by the three network operators, as well as the virtual monopoly control of the International Internet Connectivity market by NITEL’s SAT-3 submarine cable.

In the International Internet Connectivity market, the NCC investigation concluded that though NITEL was then the sole supplier of bandwidth, its practices did not in any way reflect anti-competition dominance which inhibited competition in the market.

NCC “has not found conclusive evidence that NITEL is engaging in conduct which has the purpose or effect of substantially lessening competition. In fact, the available evidence indicates that the International Internet Connectivity market is highly competitive… and will become increasingly competitive on a prospective basis.”Sifiso Dabengwa, CEO, MTN Group

However, since the investigation a few years ago, Main One, Glo-1, WACS and ACE submarine cables, among others, have landed bandwidth on Nigeria’s shores for the market’s growing data consumption by Internet service providers and others.

The regulator explained that it investigated the GSM mobile operators because any question of dominance malpractices on their part would most significantly adversely affect other telecoms operators such as fixed or mobile wireless companies and consumers.

“The mobile telephone service market is a unique and relevant market for purposes of evaluating potential dominance among its licensed operators,” it gave as the rationale for investigating only the GSM operators with a large share of the market.

The investigations, including public hearings, followed complaints NCC received about problems with both the mobile telephone market and the international bandwidth connectivity provision to Internet service providers.

The complaints specifically suggested there were problems with market dominance and that there were market practices that either lessened competition or disadvantaged some competitors, the regulator said.

For instance, specifically, MTN, as the largest operator, had 41.2 per cent market share, higher than the commission’s established market dominance threshold of 40%. The GSM giant, therefore, had some control over the market to make unilateral pricing decisions or indulged in practices that lessened competition.

Secondly, joint or collective dominance could emerge with two or more operators colluding to limit competitive market forces.

Above all, MTN controlled a significant percentage of key network infrastructures in the sector and other operators complained they encountered difficulties to get adequate and timely interconnection with MTN or obtain shared access to needed facilities such as towers and backbone network transmissions.

According to the report, though mobile customers can switch operators easily, the absence of number portability inhibited it and made it a disincentive because dissatisfied customers must change their telephone numbers. Until number portability is implemented by the GSM operators, subscribers will continue to endure poor services the operators provided.

In its view, NCC said a most significant indicator of competition – and conversely, implicit anti-competitive activity – is pricing, which has neither been increasing nor artificially high.

“There is robust activity among competitors to introduce alternative pricing options, promotions, discounts and special arrangements, including differential off-net and on-net prices and experimental tariff deals.”

As such, all operators are actively seeking to win and retain customers partly through aggressive pricing strategies. “This activity is inconsistent with any finding of market dominance and especially abuse of dominance.”

Manager Web Manager, Technology Times http://technologytimes.ng

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