The Gorilla In A Developing Country (2)

Section 101 of the Electronic Communications Act 2008, (Act 775) (EC Act), for instance, defines significant market power to mean a situation where a network operator or service provider either individually or jointly with other operators or providers has a position that allows it to behave in a way that is appreciably independent of its competitors and customers. Therefore, any operator with 40% or more market share in voice, data, SMS and value-added services like Mobile Money is considered a Significant Market Power (SMP) under the National Telecommunications Policy (NTP) and attendant corrective measures should be implemented to facilitate more market competition than is currently available.

MTN clearly possesses this significant market power which has been declared by National Communications Authority (NCA). From a free market think tank perspective, the above is not competitive enough as MTN seeks to benefit entirely leaving out the other telecommunication networks. To correct this imbalance, the NCA shall apply the following measures:

  1. 30% asymmetrical interconnect rates in favour of the disadvantaged operators in accordance with the law.
  2. Setting of floor/ceiling pricing on all minutes, data, SMS, Mobile Money, etc.
  3. Review and approve all pricing by the SMP as required by law.
  4. Require SMP not to have differential prices for on-net and off-net transactions.
  5. Ensure various operator vendors are not subject to exclusionary pricing or behaviour.
  6. Ensure that SMP’s access to information does not disadvantage any value-added service of non-SMP operators.
  7. Require operators to present implementation plans on national roaming services within the next 30 days for execution on or before the next 90 days. 

In relation to SMPs, MTN is in control of 80% of the top-ups for the period of January-March of 2020, and more than 90% of Mobile Money transactions for same period. This is not a healthy long-term position for the nation to tolerate this monopoly, especially when MTN has not fully cooperated with GRA and NCA in recent times. In Tanzania, MTN was required to not have differential prices for on-net and off-net calls under a multilateral agreement among all the four MNOs and the two leading banks in 2013. Even in its own original jurisdiction/home territory, South Africa, the asymmetric interconnect rates were imposed by the minister in 2014. We can also take a look at Bangladesh regulator’s SMP designation of Grameen Phone (GP) where GP was declared as holding SMP in two categories (subscribers and revenue). The operator accounted for 46.33% of the country’s active customer base in 2018 while its revenue share has been more than 50% for many years. All these came with the necessary SMP restrictions. Norway regulator’s SMP designation of Telenor has been upheld by Norway’s Telecoms Regulator (Nkom) to have special obligations imposed upon it as of June 1, 2020.This is to facilitate the continued rollout of a third nationwide mobile network by ice and involves controls over colocation and data pricing, and Telenor is also required to give access to its network for MVNOs with controlled prices. UK regulator’s designation of BT as SMP and investigation also examine whether there are reasonable grounds to believe that BT has failed to comply with its obligations under a number of specific SMP conditions, Telegeography 19 July 2019. Finally, Luxemburg regulator has published a series of decisions regarding the country’s wholesale broadband markets for operators designated as having SMP, Telegeography April 1, 2019.

The National Telecommunications Policy Section 4.3–Competition shows the establishment of a fair, transparent and non-discriminatory telecommunications market environment. This section describes the general framework for the functions and responsibilities of the NCA and of licensed operators in achieving effective competition. Based on this policy framework, the NCA has the authority to define specific procedures, rules, regulations and administrative structure to ensure that competition policy is effective. This runs through with interconnection as well. Companies licensed to operate public telecommunications networks and to provide public telecommunication services are obligated to provide interconnection subject to negotiated commercial agreements. The NCA shall establish and administer an interconnection regime which will be non-discriminatory and transparent, and will promote fair and effective competition for all operators, including cost-oriented charges for interconnection services. Operators may be free to negotiate interconnection agreements among themselves on such terms and conditions as they may choose so long as such terms are non-discriminatory to other market participants and consistent with the principles of this policy. The NCA shall facilitate such negotiations and encourage operators to achieve agreement in a timely manner.

Again, a look at equal access shows that for the greatest extent possible, customers shall be offered equal access to all competing service providers in the market, meaning that any customers should have the opportunity to choose among the services of all competing providers without cost penalties or unduly burdensome technical barriers. Operators of the dominant or bottleneck networks will be required to facilitate such equal access by any technical modifications that may be necessary. The costs of providing equal access will be shared on a non-discriminatory basis by all competitors.

Finally, Electronic Communications Act, 2008 Act 775 (Section 25) -Tariffs propose the following:

  • Tariffs for electronic communications services except those which are regulated by the Authority under this section shall be determined by service providers in accordance with the principles of supply and demand.
  • The Authority may establish price regulation regimes, which may include the setting, review and approval of prices by regulation where;

(a) there is only one network operator or service provider or one network operator or service provider that has significant market power,

(b) a sole network operator or service provider or a network operator or service provider with significant market power and cross-subsidises another electronic communications network or service, and

(c) the Authority detects anti-competitive pricing or acts of unfair competition.

  • A service provider shall provide rates that are fair and reasonable and shall not discriminate among similarly situated persons, including the service provider and anybody corporate with which it is affiliated except as otherwise provided in this Act.
  • The Authority may prescribe a method to regulate the cost of the service for any public electronic communications service in which a service provider is dominant by establishing a ceiling on the cost, or by other methods that it considers appropriate.

(5) A service provider shall publish the prices, terms and conditions for its public electronic communications services at the times and in the manner that the Authority shall specify and the prices, terms and conditions shall, be the lawful prices, terms and conditions for the services subject to this Act and the conditions of the licence.

In conclusion, NCA has exercised its mandate under Section 20(13)of the Electronic Communications Act, 2008 (Act 775) by declaring its intention to classify MTN as a dominant/significant market power, thereby implementing specific policies mentioned afore to ensure a level-playing field for all network operators within the telecommunications industry. MTN should be able to consider this Regulatory Act in light of the common good of the country and the investment opportunities it comes with.

By Palgrave Boakye-Danquah

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