Government may sanction four operators for alleged flouting of telecoms promotions, lottery ban

By Technology Times Staff Reporters

Lagos February 24, 2013: The Federal Government may slam fresh rounds of sanctions on telecoms companies over allegations that they flouted an existing regulatory ban imposed on seven major operators from undertaking all promotions and lotteries due to network congestions. 

Technology Times has learnt from people conversant with the situation that except there is a last-minute change of mind by the telecoms industry regulator, the Nigerian Communications Commission (NCC) may impose fresh rounds of varying sums in fines on four big telecoms companies (names withheld) as punishment for allegedly carrying out promotions of their network services, particularly data.

Officials of the agency as well as operators are keeping sealed lips over the matter that may see some of the companies to be affected in the impending sanction paying fines ranging from N10 million, N6 million and others yet to be ascertained as at press time, following a decision taken by the Abuja-based NCC.

What has been ascertained is that four big operators may be affected in the fresh regulatory sanctions over allegations that they have continued to carry out promotions on their data services in the wake of last year’s ban imposed on seven companies, according to credible sources.

Tony Ojobo Director, Public Affairs, NCC, who announced the ban last year said it was imposed because the regulator, “in recent times, has been inundated with several complaints from consumers, industry stakeholders against the various promotions offered by telecommunications operators.”

According to NCC, the companies affected include MTN Nigeria, the market leader by subscriber numbers owned by South Africa’s MTN Group; Globacom Limited, the Second National Operator (SNO) owned by Nigerian billionaire, Mike Adenuga Jnr; Etisalat Nigeria, owned by a mix of Mubadala and Etisalat of the UAE as well as Nigerian investors led by Hakeem Belo-Osagie and Airtel Nigeria, owned by Bharti Airtel of India.

Also affected by the regulatory ban are three other CDMA networks including Visafone Communications Limited, owned by Nigerian banker, Jim Ovia; Multi Links Telecoms Ltd (formerly Multi Links Telkom) and Intercellular Nigeria Plc, which has been acquired by SudaTel.     

The ban on promotions and lotteries imposed late last year caught the affected operators off guard coming amid the yuletide period when they roll out various trade promotion schemes largely to reward and lock in existing subscribers and attract new ones in the competitive market.

According to official statistics from NCC, the Nigerian grossed over 113, 195,951 active connections at the end of 2012 with mobile phone lines recording more than 95 per cent usage across the country. 

Subscribers continue to face varying degree of network issues including inability to make calls, recharge their phones or other issues often linked to congestions or other challenges from their services providers, says the industry watchdog.

Ojobo, who announced the sanction said that NCC, “has banned all promotions by Telecommunications Network Operators as well as lotteries being carried out on such networks. This ban covers all proposed and approved promotions and lotteries on which the Commission has given approval further to the Memorandum of Understanding (MOU) entered into with the National Lottery Regulatory Commission (NLRC).”

NCC justifies the ban on the problems faced by phone users noting that it, “has carefully evaluated the complaints received especially against the backdrop of sustaining the integrity of the networks, the general interest of the consumers, the socio-economic impact of these promotions on operators and other relevant stakeholders.”

According to the watchdog, the trade promotions “have increased the number of minutes available to subscribers for use within a limited period of time thereby creating congestion in the networks as subscribers try to use up the available minutes within the stipulated time.”

It also flayed the practice where, “on-net calls were now being offered by operators at tariffs well below the prevailing inter-connect rates thereby introducing anti-competitive practices and behaviour.” 

Ojobo notes further, “That termination of calls were becoming increasingly difficult from one network to another and overall consumer experience on the networks has become very poor thereby making it extremely difficult for subscribers to make calls successfully.”