Etisalat Challenges NCC Over MTN’s Tariff Differentials: A Battle for Fair Market Competition

A report by Ventures Africa indicates that the Nigerian Communications Commission (NCC) has come under intense scrutiny, with accusations of procedural oversight from one of Nigeria’s largest telecom service providers, Etisalat – ranked fourth in terms of mobile subscribers across the country. This issue presents a pivotal moment in Nigeria’s telecommunication industry, a sector that has over 135 million registered lines and is valued at over $25 billion.

Etisalat challenges the NCC’s approval of a controversial 30% tariff differential favoring MTN – the nation’s largest network operator by subscriber count. Etisalat alleges that this approval violated procedural norms, hence it’s seeking a judicial review by a Federal High Court.

In 2012, an NCC-mandated study found MTN to be the dominant operator in Nigeria’s voice market. The study further revealed that MTN had maintained a 300% differential between its on-net (calls made within the MTN network) and off-net (calls made outside the MTN network) voice tariffs. Consequently, the NCC issued a directive prohibiting MTN from issuing any such differential tariffs.

However, in a surprising twist, contrary to its earlier directive, the NCC has reportedly permitted MTN to operate a new 30% differential between their on-net and off-net calls. As per Etisalat, this move dramatically strengthens MTN’s already substantial control over the Nigerian telecom market.

Etisalat’s concerns go beyond simple market competition. It underlines that this differential in call rates may truncate the freedom of subscribers, compelling them to restrict their calls to MTN’s network to avoid exorbitant charges. MTN has cunningly awarded this differential a “Calling Club” moniker to make it palatable to the general users, luring them into a trap where they pay significantly more for calls outside their network while non-MTN subscribers are charged exorbitantly for calls to MTN’s subscriber base.

Etisalat’s battle is not just for its own foothold in the market but for the Nigerian subscribers and fair market practices. At the core, it’s a fight for competition. If unchecked, a single entity like MTN could unfairly dominate the market, spelling trouble for both competitors and consumers.

It is a critical juncture for the NCC, particularly for its newly-appointed head, Prof. Umaru Danbatta, who is expected to ensure fairness in Nigeria’s competitive telecom sector. The NCC’s recent plans to increase fines for non-compliant telecom operators regarding SIM card registration hints towards a push for increased regulation, but it remains to be seen if this energy will be directed towards the MTN-Etisalat conflict.

The Nigerian telecommunications market, a multi-billion industry serving millions, awaits the resolution and hopefully cleaner, fairer market practices in the future.