Visafone’s spectrum not sold to MTN, says NCC

The Nigerian Communications Commission (NCC) has said it did not approve the sale of the spectrum of former code division multiple access (CDMA) carrier, Visafone, to MTN, adding that it was careful not to further promote the latter’s dominant operator-ship status in the country.

Its Executive Vice Chairman/CEO, Prof Garba Umar Dambatta who spoke during a world press conference at the Commission’s Headquarters in Abuja to mark the one year anniversary of the unveiling the Eight Point Agenda, said the NCC only approved 100 per cent shares acquisition of the distressed telco, adding that its spectrum sale will be brought to the attention of stakeholders when the time comes.

Dambatta said already, a study commissioned by the regulator had established that MTN was dominant  in voice and ‘upstream market’ segments of the industry.

According a document titled: Determination ofDominance in Selected Communications Market in Nigeria issued by the NCC about three years ago, the exponential growth of the industry has led to the increased maturity  and  sophistication of  individual networks and has also ushered in intense competition among the industry players. “While  the Commission recognises that effective competition in the various communications markets in  Nigeria will encourage sustainable investment, growth and innovation to the benefit of the entire  Industry  and  its  consumers,  it  also  acknowledges  that  existing  market  conditions  may  preclude  effective competition in certain market segments,” it explained.

The NCC in exercise of its regulatory function  to  “ensure  fair  competition  in  all  sectors  of  the  Nigerian  communications  industry”  (Nigerian  Communications Act 2003 (NCA 2003   S.1e)) embarked on a Study of the Assessment of the Level of  Competition in Nigerian Telecommunications Industry.

The study found out that the mobile voice market is not effectively competitive and is still highly concentrated. MTN had a 44 per cent market share of subscribers within the market. There was also a wide differential (of about 300 per cent) between on-net and off-net calls indicative of the likely establishment of a ‘calling club for MTN subscribers.’

In the upstream market, MTN  and  Glo were discovered to jointly  control  about  62 per cent  of  the  public  terrestrial transmission infrastructure  which is a bottleneck resource in the provision of voice and data services. “There are concerns that operators playing in the wholesale and retail sub segments of these markets have the leverage to “squeeze” the margins of their competitors who are also their customers,” the study noted.

The Commission then resolved that the Dominant Operator in the Mobile Voice market shall be required to separate account.

The Commission will enforce and implement  accounting separation on the dominant operator-collapse of on-net and off-net retail tariffs. The differential between the on–net and off-net retail tariffs will be immediately collapsed. The tariff for on-net and off -net will be the same, and subject to periodic review.

NCC said it may require the dominant operator to submit details on specific aspects of its operations from time to time as the need arises.

For the dominant operators in the Wholesale Leased Lines and Transmission capacity, NCC promised to come up with price cap for wholesale services and price floor for retail services subject to periodic review while accounting separation will also be implemented.

Efforts to get MTN to react to the development were not successful but a source familiar with the transaction confirmed that the letter given to the telco by the NCC indicated that the spectrum was also included in the transaction.