NCC Orders MTN To Increase Call Tariffs

In a bid to create a level playing field for telecoms  operators, the Nigerian Communications Commission (NCC) has directed MTN Nigeria Communication Limited to raise internal mobile tariffs.

NCC in its recent industry review, phone calls between MTN customers cost three times lower than calls to other networks. The report stressed: “This is indicative of the likely establishment of a calling club for MTN subscribers.”

MTN, which has about 44 per cent of the market, must cut the difference in price and face further scrutiny to ensure the competitive landscape is even for all operators, the NCC insisted.

Nigeria, Africa’s fastest growing telecoms market with a population of 167 million people has a subscriber base that is slightly above 113 million at the end of 2012, according to the NCC. MTN Nigeria is the market leader with 47 million lines.

Globacom had 24 million subscribers, Airtel-23 million customers while Etisalat had 14 million, according to data on the NCC’s website.

The report also showed that MTN and Globacom were found to “jointly control about 62 per cent of the public terrestrial transmission infrastructure,” raising concerns they may “squeeze the margins of their competitors who are also their customers.”

“As a result of the determination outlined above, the Commission has resolved that the Dominant Operator in the mobile voice market shall be required to adhere to the following obligations:

“Accounting Separation: The Commission will immediately 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 offnet will be the same, and subject to periodic review.

“ Submission of Required Details: The Commission may require the dominant operator to submit details on specific aspects of its operations from time to time as the need may arise.” The regulator added that the Commission shall make a determination of pricing principle to address the rate charges for on-net and off-net calls for all other operators

On the dominat operators in the Wholesale Leased Lines and Transmission jointly dominated by MTN and Globacom, NCC said it will impose price cap/price floor for wholesale services and price floor for retail services which shall be subject to periodic review. It also plans to “immediately enforce and implement accounting separation on the joint dominant operator.”

The regulator added that it may require any of the joint dominant operators to submit details on specific aspects of the operations from time to time as the need arises.

“The determination shall take effect from 1st May 2013 and remain valid and binding on licensees for the services specified in relevant market segment of this sector until further reviewed by the commission,” the NCC said.