A Nigeria’s Telecommunications Provider, Etisalat has blamed and faulted the endorsement made by the Nigerian Communications Commission (NCC) for the approval for acquisition of Visafone by MTN, a Code Division Multiple Access (CDMA) operator, and MTN Nigeria, a Global System for Mobile Communications (GSM) operator.
According to Etisalat, the acquisition of Visafone by MTN, would give MTN undue dominance over other GSM operators, especially in MTN’s use of the 800 MHz spectrum in rolling out its broadband services, which initially belonged to Visafone, prior to the acquisition.
On the basis of this argument, Etisalat Nigeria has brought a legal action against MTN Nigeria and Visafone Ltd., challenging MTN’s use of the 800 MHz spectrum following the acquisition of Visafone.
Etisalat wants the NCC to reverse the sale, insisting that NCC gave approval to MTN for the acquisition of Visafone in error.
The action was considered necessary to prevent the use of the spectrum by MTN at this time, as it would entrench the dominance of MTN in the retail data services market.
This is because MTN Nigeria was declared dominant by the NCC in 2013 and remains dominant in the wholesale leased line and retail voice markets, Etisalat said in a statement.
According to the statement, “the use of the 800 MHz spectrum to deploy broadband services ahead of its competitors, particularly those who prior to MTN’s purchase of Visafone, held similar spectrum bands as MTN, will further entrench MTN’s dominance in the Nigerian telecommunications sector.
“We have in addition and in line with Section 86 of the Nigerian Communications Act, 2003 engaged the NCC to understand the basis of its decision to approve the acquisition, the statement further said.
Although the Public Affairs Officer of NCC, Mr. Tony Ojobo, could not be reached at press time, a insider from NCC, who preferred to remain anonymous, said NCC saw the acquisition of Visafone by MTN Nigeria as a pure business deal that would impact positively on CDMA operations in the country, especially at a time when the CDMA sectors were facing serous market challenge; hence it quickly endorsed it without regret.
According to the source, the endorsement from NCC was legitimate and it came at a time when industry players were calling for bailout for CDMA operators in the country.
The source added that NCC did it in good fate, just the way it endorsed the acquisition of three CDMA operators by Visafone, shortly after Visafone was licensed in 2007.
The source named the acquired CDMA operators by Visafone to include Cellcom in 2007, Bourdex Telecom in 2008 and later ITN, another CDMA operator in the lucrative Lagos market, by the same Visafone that has just been acquired by MTN Nigeria.
Before the acquisition of Visafone by MTN Nigeria last month, the GSM operators controlled about 98 per cent of the Nigerian market, while the CDMA controlled 1.58 per cent market share, according to statistics from the NCC.
CDMA operators were already going under, leaving Visafone as one of the two surviving CDMA operators, before MTN came to the rescue, the NCC source said.
MTN Corporate Services and Human Resources Executive, Amina Oyagbola, had said the acquisition of Visafone would help to leverage resources for service enhancement and would deepen the growth and rollout of broadband services across the country in support of the National Broadband Plan for the benefit of Nigerians.
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