…as group says move will reduce consumer welfare
The National Association of Telecoms Subscribers in Nigeria (NATCOMS) has opposed the plan by Nigeria’s largest telecoms company, MTN Nigeria to acquire the spectrum of 9Mobile, saying that such move, if approved by the regulatory authorities will lead to the creation of an oligopoly market, Technology Times reports.
According to Deolu Ogunbanjo, national president, NATCOMS, Nigerian Communications Commission (NCC) should intervene to halt the deal, for the benefit of Nigerians and the Nigerian economy. Technology Times had exclusively reported the desire of the management of MTN Nigeria to acquire 9Mobile, as they are convinced that the move will consolidate MTN Nigeria’s position in the nation’s telecoms market.
“I must say that it is a bit surprising that MTN is not trying to talk to, you know, another mobile operator, and in particular through the NCC, to acquire another spectrum belonging to another network operator. I mean, this should not be encouraged because of the fact that MTN is having close to 50% of Nigeria’s telecoms market subscription. Because by the time you get the spectrum, the next thing would be to acquire them, meaning that MTN will now be having between 50% and 60% of the total telecoms’ subscription in Nigeria. And that is a form of oligopoly,” Technology Times reported Ogunbanjo to have said.
As of August 2023, Nigeria had 220.715 million subscribers, comprising 220.361 million as mobile (GSM), 96,796 fixed wired/wireless, and 257,979 VoIP with a teledensity of 115.63 percent.
According to NCC, MTN Nigeria with 85 million subscribers as of August 2023, controlled 38.58 percent of the market share. It was followed by Globacom which controlled 27.86 percent translating to 61.39 million subscribers.
Airtel Nigeria controlled 27.30 percent of the market share, amounting to 60.17 million subscribers. 9Mobile in question controlled just 6.26 percent, which amounted to 13.71 million subscribers.
The NCC added that 60.32 percent of the nation’s telecoms subscribers operate within the 2G spectrum, while 3G has 10.78 percent; 28.07 percent for 4G just as those operating within the 5G constitute just 0.83 percent.
MTN Nigeria continues to consolidate its position in the Nigerian telecoms market. At the end of the third quarter ended September 30, 2023, the telecoms giant generated N1.8 trillion as revenue. From the total revenue, N834 billion was realised from voice services; N749.53 billion from data services; N64.69 billion from fintech; N24.72 billion from digital , and other services generated N89.93 billion for the company.
Earnings before interest, tax, depreciation and amortization (EBITDA) increased by 16.3 percent to N907.9 billion. Profit before tax fell by 42.0 percent to N232.5 billion while profit after tax stood at N147.36 billion.
An oligopoly market is a market characterised by few suppliers of a commodity, which could be competitive or not. This form of a market is present in many sectors of the economy globally, if not well regulated could lead to anti-competitive behaviour, emergence of a cartel, as well as merger which could ultimately affect consumer welfare.
