Economic Challenges, Anti-Competition Shrinking Number of Telcos in Nigeria

• NCC moves to address industry challenges

Emma Okonji

The economic challenges and anti-competition practices plaguing the telecoms industry have forced 19 companies to close shop, telecoms operators have revealed.

There were 35 operators about 15 years ago, but the number has shrunk to 16 as a result of the challenges.

To address the situation, Nigeria Communication Commission (NCC) at a stakeholders forum on the study of the level of competition in the telecoms industry, yesterday commissioned a study that will address the situation.

President of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said it was disturbing and painful that the number of telecoms operators continued to shrink.

Adebayo who decried the last few years of the liberalisation of the sector, said: “W were 35 active members, but as I am speaking with you, we are only left with 16 members. We have supposedly lost the rest to economic challenges, anti-competition, multiple taxation, vandalism and theft, among others.”

Adebayo called on governments at all levels to see telecoms as infrastructure of infrastructure, which “if allowed to collapse, every other sectors of the economy would be impacted greatly and negatively.”

Earlier at the meeting, NCC Director of Commission and Economic Analysis, Josephine Amuwa, noted that the Commission would ensure that the sector is well protected against economic challenges capable of stunting the sector’s growth.

On the theme of the meeting, Amuwa said the overall objective of the study was to provide current insight into the level of competition in the telecommunications market and articulate strategies/ recommendations to enhance opportunities in the market and to ensure the deepening of competition resulting in the provision of innovative services to consumers.

According to her, it is an established fact that competitive markets are the cornerstone of a vibrant telecommunications industry as it encourages innovations and fosters efficiency.

“In recognition of this fact, the commission periodically conducts studies to assess the level of competition in the industry in line with its mandate of creating an enabling environment for competition amongst operators in the industry as well as ensuring the provision of qualitative and efficient telecommunications services throughout the country,” she stated.

She recalled that the commission in the exercise of its regulatory functions as provided for under the Nigerian Communication Act (NCA), 2003, engaged the consulting firm KPMG Professional Services to conduct a study on the assessment of the level of competition in the Nigerian telecommunications industry in 2013.

Amuwa said the outcome of that assessment resulted in the definition of relevant market segments and a determination of dominance in some of those market segments.

According to her, following the success of the 2013 determination and activities in the telecoms industry and since then, it became necessary to conduct another assessment of the competition in the market.

“NCC has engaged the services of Messer’s CT Worx. Limited to conduct a study on the ‘Level of Competition in the Nigerian Telecommunications Industry,’ using the 2013 as baseline year,” she stated.

Amuwa said CT Worx has five months to deliver on the work, and that the study would enable the commission to evaluate the current level of competition within the various market segments of the Nigerian telecommunications industry; identify the factors determining the degree of competition in telecommunications industry in Nigeria, with a focus on the degree of rivalry in the sector; evaluate the Commission’s interventions towards deepening Competition and identify areas that require improvements and benchmark these practices against international standards and good practices.

Others are to identify indicators for evaluating the level of competition in the various telecommunications market segments identified; identify any existing/plausible agreements, arrangements and practices among different licensees which constitute anti-competitive conduct, anti-competitive patterns and propose effective measure to address them; and determine dominance if any and propose obligations to be imposed on dominant operators in any market segment where such is determined to exist.

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