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Nigerian Regulator Says MTN Must Raise Tariffs to Cut Dominance

MTN Nigerian Communication Ltd., the country’s biggest phone company, has become “dominant” and must raise internal mobile tariffs to boost competition, Nigeria’s telecommunications regulator said yesterday.

An industry review showed phone calls between MTN customers cost three times lower than calls to other networks, the Nigerian Communications Commission said in a statement on its website. “This is indicative of the likely establishment of a calling club for MTN subscribers,” the regulator said.

MTN, which has about 44 percent 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 said.

Nigeria, Africa’s most populous nation with more than 160 million people, had about 113 million mobile phone subscribers at the end of 2012, according to the NCC. MTN Nigeria, the local unit of Johannesburg-based MTN Group Ltd. (MTN), is the market leader with 47 million lines.

Nigeria’s Globacom Ltd. had 24 million users, Mumbai-based Bharti Airtel had 23 million customers and Abu Dhabi-based Emirates Telecommunications Corp. (ETISALAT), known as Etisalat, had 14 million, according to data on the NCC’s website. In an industry with 25 different operators, the top four have about two-thirds of the market.

Jointly Control

MTN and Globacom were found to “jointly control about 62 percent of the public terrestrial transmission infrastructure,” raising concerns they may “squeeze the margins of their competitors who are also their customers,” the NCC said. Prices for transmission will now have caps and floors that can’t be exceeded, the regulator said.

No operator was found to be dominant in the provision of fixed voice and mobile data, according to the statement.

The NCC said on April 22 mobile-phone users would be able to change service providers and retain their numbers, increasing competition among the telecommunications companies. Rates for calls between different phone companies were set 40 percent lower from April 1.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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