Some people wonder why talks about co-location of infrastructure, base station sharing and other issues that will ensure pooling resources or strength among telecom operators have not been felt in the industry, especially in the quest to develop infrastructure.
The Nigerian Communications Commission had in past forums sought a lead as to what operators feel should be or not regarding competition and anti-competition regulation; what the regulator needs to put right or was doing wrong, and ways of an amendment. Operators have been speaking out.
One of the key points is the Unified Access Service license. The problem with operators with Unified Access Service (UAS) license is that it might have turned out to be unfair licensing as they have been granted permission to encroach and crowd some other markets where the operators have not anticipated that a non-licensed operator will play on their turf. Now, National Long Distant (NLD) Operators have to complain that they only envisaged that competition will be between the licensed 9 operators, not also with the 16 firms with UAS license. This means that 25 firms (plus the two national carriers, Ntel and Globacom) started to compete on the provision of transmission services which NLD operators thought was their exclusive right.
Today, some operators have called for a review of licenses and release of complimentary licenses to enable smaller operators to delve into the marketplace and provide smaller services.
So what is the regulator doing wrong here? Obviously, there needs to be a proper streamlining of licensing and what it allows each category of licensees do. Competition is not only among GSM operators. Now, the issue of having a dominant operator in the Broadband sub-sector is being tackled.
According to the Managing Director of Interconnect Clearinghouse Limited, Engr. Oladele Ayambade jp: “Our challenge is (anti) competition, everybody is sitting in his own compartment, and doesn’t want to share what he has with the other person. This is what is really impeding the growth and spread we want.”
Although the NCC has tried to streamline the operations of various operators under it, it still has a lot of work to do as some of the operators may have found ways of engaging in operations that transcend their licences but can’t be directly attributed to them. For instance, where a telecom (GSM) operator is not allowed to engage in mobile money operation but liaises with a bank to push such an operation, pretending to only provide a platform that allows customers to use its SIM provision as a vehicle, seems to be out of place.
A dominant operator status sometimes is developed out of the share profitability of a competing company. This means that the company is able to expand and cloud over other operators using the resources at its disposal. But a regulator armed with this knowledge will invariably put rules on the ground to curb this. Such rules as mandatory infrastructure sharing, passive and active network sharing, structured legitimate distribution of incentives, among others.
Also, the allegation of non-payment of interconnect debts by some CDMA operators and non-compliance of the Interconnect Agreement, also of NCC’s neglect of such contravention, seem to be in line with anti-competition trends that needed to be addressed. Now that the CDMA operators are almost extinct, there is less heard about breach of interconnect agreement.
This is also why the last mile factor is still plaguing the country’s deployment of broadband services – who will invest there? The USPF is yet to address this issue, hence the call by operators for a re-visitation of the provisions of the fund.
The quest to ensure parity in the system had led the NCC to restructure the USPF and institute the anti-competition guidebook that ensures that operator dominance in the telecommunication sphere is ruled out.
It will be difficult however to determine to what extent an operator’s right should stretch when it has to do with infrastructure leasing or sharing. The problem is that aside NCC’s look into the development of the country’s services via elimination of the dominance threat, there is the underlying aspect of ‘private sector business’. Some operators believe that they have spent a large chunk of their money in setting up infrastructure, and dominance in that area (for as long as it will take their competitor to measure up) will not hurt.
Operators, however, believe that there might not be a need for further enactment of rules, laws or regulations as existing 2003 Act empowers NCC sufficiently to act against anti-competitive and undue dominance threat among operators.
But the challenge will be identifying these threats, determining if they are here and tactfully addressing them without stepping on the rights or license provisions of an operator. It is needful to further review and publish rules guiding infrastructure sharing, colocation, and certain other inter-operator ‘fellowship’ that needs to be regulated.
Some of the things the operators were in agreement on included the fact that the Commission’s subsisting power should be used where there is an identified contravention of rules in competition, that dominance cannot be proven until there is a proper delineation of the market so as to know who plays where and what their licences allow them to do, that there should be punitive measures ranging from suspension of operating licence to payment of fines against defaulting/compensation to aggrieved operators in anti-competitive cases. Some even recommended a special tribunal to investigate and prosecute offending operators.
One of the recommendations or observations of the NCC partner in a research in 2012, KPMG, is the provision and access to Transmission Cable and Backbone Infrastructure Services to stimulate competition in the Nigerian Internet/ Data Market. Good observation! But the NCC will have to find out who should provide the infrastructure, and if the operators provide these infrastructure (against the provisions) what incentive will be accruing to them, bearing in mind that whatever the operators spend (despite their shouts and cries) they eventually pass down to the hapless consumers, both in terms of quality and cost of services.
The bottom-line is that anti-competitive activities by operators should stop, to make room for growth which will cut across all the strata of the ICT industry.
Consequences of Anti-Competition Practices
- Increased costs of providing services culminating in the high price to end user
- Low level of broadband penetration in a case of dominance
- Duplicate Infrastructures where operators refuse to share or increase the cost of leasing
- The barrier to market entry and enhances the quick exit of smaller/ new operators
- Discourages investment
- Little or no return on investments to some operators
- Impacts Quality of service negatively
- Creates a dominant operator
- Brings chaos and disharmony in the market