Tuesday, April 30, 2013

NCC orders MTN to Collapse Its tariffs

MTN has been overcharging subscribers for calling other networks in Nigeria it seems. Hence the Nigerian Communications Commission has ordered the company to collapse tariffs...

NCC orders MTN to collapse rates

TELECOMMUNICATIONS regulator, the Nigerian Communications Commission, has ordered MTN Nigeria to collapse the rates for its on-net and off-net voice services, which it said has a 300 per cent differential with effect from tomorrow, May 1.

The NCC, in a report titled, ‘Determination of dominance in selected communications markets in Nigeria,” signed by Mr. Eugene Juwah, Executive Vice Chairman, NCC, said it plans to make a determination of pricing principle to address the rates charged for on-net and off-net voice calls for all other operators, to manage dominance in the market.

The NCC also disclosed that competition in the Nigerian mobile voice market is not highly competitive, and using what it called the HHI, said MTN with 44 percent of the market share has emerged the dominant operator in the mobile voice segment.

According to Juwah, an industry review showed phone calls between MTN customers cost three times lower than calls to other networks, indicative of the likely establishment of a calling club for MTN subscribers.

Juwah said, “As a result of the determination outlined above, the Commission has resolved to immediately enforce and implement accounting separation on the dominant operator; ensure that the differential between the on-net and off-net retail tariffs will immediately collapsed, while the tariff for on-net and off-net will be the same and subject to periodic review.

“The Commission may require the dominant operator to submit details on specific aspects of its operations from time as the need arises.”

Continuing, in the wholesale Leased Lines and Transmission Capacity market, which are in the upstream segment of the telecoms market, the NCC said the dominant operators, MTN and Glo jointly control 62 per cent of the market, and they shall be required to adhere to the following obligations as the Commission will come up with a price cap for wholesale services and price floor for retail services, and subject to periodic review.

“The Commission will immediately enforce and implement account separation on the joint dominant operators.

“The commission may require any of the joint dominant operators to submit details on specific aspects of its operations from time to time as the need arises.

“The determination shall take effect from 1st May 2013 and remain valid and binding on Licenses for the services specified in relevant market segments of the section, until further reviewed by the Commission.”
NCC said there are about 113 million mobile phone subscribers at the end of 2012, with MTN Nigeria leading with 47 million lines.

Globacom followed with 24 million users, Bharti Airtel had 23 million customers while Etisalat, had 14 million.

Source: Vanguard


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