A former Nigerian Communications Commission (NCC) insider has asked President Bola Tinubu to suspend the 50% telecoms tariff hike approved by the industry regulator, and address alleged hostile market takeover by MTN Nigeria, the dominant mobile network operator (MNO) said to be championing the imposition of the price increase to undermine competition.
Speaking in an exclusive interview with Technology Times on Monday, Mr. Ayoola Oke, a former special adviser at the Nigerian Communication Commission (NCC), says that the telecoms tariff increase announced by his former employer was allegedly “engineered” by MTN Nigeria, a company he says has used its dominant industry position, and market share exceeding 51%, to pull off “hostile takeover of the industry.”
Oke, a telecoms lawyer and Managing Partner, Ayoola Babatunde Oke & Co, who served as Special Adviser to Dr Ernest Ndukwe while the latter was Executive Vice Chairman/Chief Executive of NCC, states that President Bola Tinubu, and the Federal Government of Nigeria, should intervene, suspend the 50% telecoms tariff approved by the nation’s telecoms regulator, and address key allegations of anti-competitive practices by MTN Nigeria.
Mr Oke is calling for President Tinubu’s intervention because he alleges that the “present day” NCC has allowed MTN Nigeria, which he says is “engineering” the telecoms tariff increase campaign, to exercise regulatory powers in the nation’s telecoms industry.
The former NCC insider, who says that as much as he would have been the last person to call for government intervention in the activities of the independent telecoms regulator, today’s NCC which he alleges, has become a victim of regulatory capture, should have addressed key issues of competition before approving the tariff increase.
Mr Oke underscores the need for the intervention when he explains that, “now we have the situation that MTN has now reached a state of dominance where they can dictate to anybody in the industry. The latest figures shows that MTN now has, for the first time, over 51% market share, figures released by NCC at the end of last year. And I am saying that this is a result of an anti-competitive, hostile takeover of the industry by MTN.”
In the interview with Technology Times, Mr Oke outlines the issues involved in the transcript below:
NCC’s 50% telecoms tariff increase not justified
Well, to be honest with you, like most Nigerians, but particularly also an expert in the industry, knowing what is going on in the industry, I was a bit taken aback. And I was also quite disappointed, to be honest with you, because I do not think, and I do not support such an increase at this time. Economically, people are having less disposable income. So a 50% increase or even any increase at all, I am not sure it is justified. And I’m not sure it is something that should be done at this time with profound respect to NCC, being my former employer. I think there were things they ought to have looked into first before considering taking this step of giving approval to increase, particularly because that increase was demanded and championed, and I would even say engineered by MTN Communication Nigeria Limited.
MTN Nigeria has become ‘an albatross on the industry’
MTN Nigeria Communication Limited has become like an albatross on the industry. They have gotten to the stage that they have practically colonised the industry and they have unleashed a systematic attack on other operators. I will not mince words on this. You see, because this agitation for increase in price was kicked off by the entry of MTN either early last year, or the year before when we talked about it as a whole. In spite of declaring huge profits, MTN Nigeria wants an increase. And MTN Nigeria has gotten that increase. And I think that is bad news. Earlier on, about three years ago, there was a particular MTN staff, one Adeyemi Jimoh, who practically made a statement that whatever MTN wants, MTN will get. And that there was nothing anybody could do about it. I think he also caused quite an uproar in the industry.
You know, that NCC had allowed them to exercise regulatory power and to disconnect anybody they found guilty of call refiling. And to be honest with you, a lot of the industry was talking about it. Some people felt it was true, but they were not happy about it. Some people felt, no, it cannot be so. I was one of the people who felt it could not be so. In any case, it soon got into it. MTN soon suspended it. They actually suspended it. I don’t know why they suspended it. They can explain.
MTN Nigeria demands payment in dollar
But you would then notice that from the time he made that statement about three years ago, MTN again started demanding for dollar payments for international termination by the local companies that handle international traffic. They are known as the IDA: International Data Access operators. They insisted they have to repay the dollar. And NCC, I’m not exactly sure what they made a determination that appears that they acceded to that request. And payment in dollars to MTN by a Nigerian company is illegal. And MTN has insisted on this, and they have enforced it. And the situation has led to a lot of the local IDAs to close shops.
And payment in dollars to MTN by a Nigerian company is illegal. And MTN has insisted on this, and they have enforced it. And the situation has led to a lot of the local IDAs to close shops.
So MTN has virtually become a monopoly in that matter, almost like a monopoly. So that was the first signal that something was wrong. This was again followed up by MTN, because usually they would accuse smaller operators of some offence or the other, and they would disconnect them, even without permission from MTN. And this issue has not been drastically addressed. So they have been getting away with it. They keep disconnecting other operators. And then when the subscribers of those operators cannot make calls, cannot reach subscribers of MTN, eventually they would jettison those operators and move to MTN. So we also saw a situation, was it not last year, that MTN disconnected Glo ostensibly on a not properly-gotten approval from NCC. They disconnected Glo. It took the intervention, I think, of the government that, no, this can happen, and this is something that does not happen in any country. Two major operators, one disconnecting the other. You see.
MTN Nigeria has reached a state of dominance
Now we have the situation that MTN has now reached a state of dominance where they can dictate to anybody in the industry. The latest figures shows that MTN now has, for the first time, over 51% market share, according to figures released by NCC at the end of last year. And I am saying that this is a result of an anti-competitive, hostile takeover of the industry by MTN. So they are the ones demanding an increase, and now they’ve gotten the increase. I don’t think that should have been allowed to happen. MTN is becoming a monopoly. And what NCC, in my own humble opinion, ought to address is competition in the markets. MTN needs to be specifically regulated as a dominant operator. They ought to be unbundled. They are using their long-distance market to cream up the market, making everybody else unprofitable and making themselves practically the only profitable enterprise. They demanded the increase. They have gotten the increase. They now have 51% of the market share. I don’t think this is proper. So that’s what I think NCC ought to do first before approving an increase, and I would suggest they should suspend this increase immediately.
First and foremost, they should suspend the increase because right now, NCC does not even have a board to properly take such decisions. According to the Act, you need to have a proper board in place. You can check the requisite sections of the law. So they should suspend these decisions. They should revert to status quo, and they should address the issue of competition in the market. They should allow more players to come in. They should allow more people to get network services licence. NCC should, in fact, go on a drive to encourage foreign investors to come in, grant more universal access services licence. That is what I would call on the chief executive of NCC to do first. Grant more universal access service licence. I understand some applications are pending. Those applications should be treated with despatch and granted.
Even NCC should encourage, go on a road show, and bring in more operators so that there’s sufficient competition because a lot of network operators have died out, and I will finger MTN. MTN is always disconnecting one person or the other, interfering with their business, and then they now come, and they begin to demand increases. So you’re turning yourself into a monopoly so that you can jack up the price and drive everybody away from the market. I think this is what government should look into, and this shouldn’t be taken lying low. It is also a security challenge. When you have one operator controlling everything, it should not be allowed, and this increase should not stand. I actually stand with Nigerian Labour Congress. I stand with NATCOMS, that this increase is not the correct time, and there are other things that ought to have been done.
First and foremost, they should suspend the increase because right now, NCC does not even have a board to properly take such decisions. According to the Act, you need to have a proper board in place. You can check the requisite sections of the law. So they should suspend these decisions. They should revert to status quo, and they should address the issue of competition in the market.
MTN Nigeria is cross-subsiding its business units
And like I said, MTN obviously is cleverly carrying out cross-subsidies between MTN Long Distance and their Long Distance Network and their Access Service Network. NCC needs to look into it, carry out an inquiry, and in fact, as far as I’m concerned, those two should be unbundled. They’ve become like a bull in the China shop, and I’m calling on the National Assembly, I’m calling on the Federal Government, President Tinubu, that this will not augur well for the country to allow the state of affairs to continue or to allow it to stand. So, that is my honest and clear opinion. It is my patriotic duty to say what I’ve said, and that is why I am saying it.
Need for an independent NCC
Well, it’s already obvious from what I’ve said. My suggestion, first and foremost, ordinarily NCC should be an independent body, and Federal Government is not supposed to interfere with their professional and regulatory duties. That is clear from the Act. The Act says, in fact, the Minister must guarantee and ensure the independence of NCC. But the problem now is that NCC is not properly-constituted. The Commission is not, because the board isn’t there. The Act says the board must have at least six commissioners, including three executive commissioners, so that they can take proper professional decisions. So the President should, in fact, immediately constitute the board of NCC, because right now, NCC is not properly constituted as a commission. That’s number one.
Number two, what the President can do, the way the President can do things, because NCC is supposed to implement the agenda of the Federal Government, and the key agenda is to make telecom services more available, more qualitative, widespread, and, like I said again, more affordable. Prices shouldn’t be going up.
So, the President can, through the Minister, that is what the Act provides, make his observations known to NCC that I don’t like the fact that prices are going up, and call on NCC to address that issue, because that is the central policy of government on telecoms services: affordability and ubiquity.
NCC doesn’t go to look at whether you’re such a good operator. You want a licence, take the licence, but these days, NCC is practically trying to tell people they must demonstrate they have the ability. No. That should not be because NCC is not an operator, NCC is a regulator. So all this looking into technical expertise and the rest of it, we should go back to the time of Ndukwe, when Ndukwe would say, “NCC is not an operator. We don’t know how the operators do it. Our own is, we will give you a licence, get the job done. If you can’t get the job done, we will collect the licence from you. And if you fail, that’s your problem.”
So constitute the board, make the policy opinion of government known to NCC, and insist that it has to regulate in a way to carry it out, and give an opinion to NCC to look into, which is that it should suspend the approval it has given, it should address the issue of competition, and it should grant more licences. There has been a shift in the days of the past. NCC does not take a long time to issue licences. NCC doesn’t go to look at whether you’re such a good operator. You want a licence, take the licence, but these days, NCC is practically trying to tell people they must demonstrate they have the ability. No. That should not be because NCC is not an operator, NCC is a regulator. So all this looking into technical expertise and the rest of it, we should go back to the time of Ndukwe, when Ndukwe would say, “NCC is not an operator. We don’t know how the operators do it. Our own is, we will give you a licence, get the job done. If you can’t get the job done, we will collect the licence from you. And if you fail, that’s your problem.”
I mean, you came into the business, you want to do it, why should I be the one checking whether you can do it or not? If you say you can do it, you can grant the licence, let there be more operators. Let there be competition in the market. That is what will bring down prices. Abi? Is it not competition that brings down prices? If there wasn’t competition, we would still be under Nitel, paying one million Naira for a line.
So we should go back to the beginning of the telecoms revolution and apply those principles, licence people, facilitate market entry, encourage people to come into the industry to provide services, and that is what will lead to optimum pricing of telecommunications. Then let us see at that point in time.
So I think the House should also hold an inquiry on this issue, that is the Senate Committee on Communications and the House Committee, they should hold an inquiry, and insist that, and pass a resolution, that this should not stand until they have held an inquiry to look into all these issues, and to give the policy position of the Federal Government to NCC for implementation. That’s what I think.
The opinions are purely professional, there’s no sentiment. I might have hit hard at some aspects of the industry, but it is not personal. It is purely my own professional opinion, and everything I have said, I can stand by it, and I can back it.
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