26 July 2015

Nigeria: Etisalat, MTN On War Path Over Promo

Lagos — An interesting legal warfare has been activated at the Federal High Court in Lagos between two telecommunication firms - Etisalat Nigeria Limited and MTN Nigeria Limited.

The suit, which came up for the first time on Tuesday before Justice Mohammed Idris, has Etisalat as the plaintiff, while the Nigerian Communications Commission (NCC) and MTN are the first and second respondents respectively.

In the suit, Etisalat is accusing NCC of giving its competitor, MTN, a market advantage over it.

Etisalat's lawyer, Aanu Ogunro, had appeared before Justice Idris with an application seeking the leave of the court for the suit to be heard during the court's ongoing annual vacation.

Ogunro, while urging the vacation judge to hear the suit, said it was urgent, claiming that if the decision of the NCC in favour of MTN was not reversed it posed a threat to the business survival of Etisalat.

"My Lord, we have a motion ex parte for leave to ask for the judicial review of the decision of the first respondent. "The urgency in this matter, My Lord, is that the first respondent has made certain decisions that, if not urgently addressed, will affect the business of the applicant and it is capable of eroding the capital and the business of the applicant within a very short time," Ogunro said.

After hearing the lawyer, the judge granted the application to hear the suit during vacation and thereafter adjourned till August 3, 2015 to take the substantive application.

Etisalat, in the main suit, is seeking a review of a decision said to be recently taken by NCC allowing 30 per cent differential between MTN's off-net and on-net retail mobile voice tariffs.

According to Etisalat, with the said 30 per cent differential between its off-net and on-net retail mobile voice tariffs, MTN had been able to create what is called a "calling club", an example of which is its "Family and Friends" promo.

Etisalat is contending that MTN's "Family and Friends" promo, which offers a call rate of 11 kobo per second to eight MTN subscribers and two non-MTN subscribers, is posing a threat to its business survival.

It explained that the "Family and Friends" promo, which it claimed was launched in violation of NCC's regulation, had aided MTN to "leverage on its size to restrict outgoing traffic to smaller operators by pricing on-net tariffs lower so as to make off-net calls unattractive."

Etisalat, however, claimed that this 30 per cent differential in on-net and off-net retail mobile voice tariffs granted MTN by NCC was a breach of NCC's regulation tagged the 'Determination of Dominance in Selected Communications Markets in Nigeria.'

The DDSCMN, Etisalat said, was issued by NCC on April 25, 2013, following a study it conducted in 2012. According to Etisalat, NCC had following its 2012 study discovered that MTN was the dominant operator in the retail mobile voice market segment of the telecommunication industry in Nigeria, and that it maintained a wide differential of up to 300 per cent between its on-net and off-net retail voice tariff, which was not favourable to its competitors.

Following this discovery, the plaintiff said NCC directed that MTN should not operate with any differential between its on-net and off-net tariffs because such would substantially reduce the competitive capacity of other telecommunication service providers in the country.


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