Etisalat sues MTN over anti-competitive practices

By Kokumo Goodie, Lagos, Nigeria

Etisalat has instituted legal action against Nigeria’s dominant operator, MTN, over practices it says threaten its business.

In the main suit, Etisalat is seeking a review of a decision allegedly taken by sector regulator, the Nigeria Communications Commission (NCC), allowing 30 per cent differential between MTN’s off-net and on-net retail mobile voice tariffs.

According to Etisalat, with this differential between its off-net and on-net retail mobile voice tariffs, MTN had been able to create what is called a “calling club,” an example of which is its ‘Family and Friends’ promo.

The telco is contending that MTN’s Family and Friends promo, which offers a call rate of 11 kobo per second to eight MTN subscribers and two non-MTN subscribers, is posing a threat to its business survival.

It explained that the Family and Friends promo, which it claimed was launched in violation of NCC’s regulation, had aided MTN to leverage on its size to restrict outgoing traffic to smaller operators by pricing on-net tariffs lower so as to make off-net calls unattractive.

Etisalat also claimed that this 30 per cent differential in on-net and off-net retail mobile voice tariffs, granted MTN by NCC, was a breach of NCC’s regulation tagged the Determination of  Dominance in Selected Communications Markets in Nigeria.

A study conducted about two years ago by the NCC had shown that MTN and Glo were dominant operators in voice segment.  In the report, NCC declared that there were concerns in the two market segments. For mobile voice, it stated that the segment is not “effectively competitive.” Fundamentally, NCC expressed worry about the “wide differential (of about 300 per cent) between on-net and off net calls.” It goes further to warn that “this is indicative of the likely establishment of a calling cub for MTN subscribers.”

Although the regulatory agency stated that the dominant operator in the mobile voice market should, among others requirements, collapse on-net and off-net retail tariffs immediately, is clear till date, in a regulatory environment adjudged weak. The dominant operator had been accused of riding rough-shod on the small players.

 President, Nigeria Internet Group (NIG), Engr. Bayo Banjo blamed the situation on absence of anti-trust law to protect the weak from the strong.

 

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