MTN Group Ltd. (MTN), Africa’s biggest mobile-phone company, said a report that criticized its market leadership and pricing policy in Nigeria isn’t clear and that it will seek talks with the industry regulator.
MTN Nigeria Communications Ltd., a unit of Johannesburg- based MTN, has become “dominant” in Nigeria with a 44 percent market share of the mobile voice market, the Nigerian Communications Commission said in a review on its website dated April 25. The commission said phone calls between MTN customers cost a third of the price of calls to other networks and amounted to “a calling club” for MTN users.
MTN must reform its mobile tariff policy and will face further scrutiny to ensure the competitive landscape is fair for all Nigeria’s operators, the NCC said. The regulator is in the process of an industry shake-up in order to cut mobile phone costs for Africa’s biggest population.
“At no time have we dropped prices to below the market, we’ve always followed the market,” MTN Nigeria Chief Executive Officer Brett Goschen said in a May 2 interview in his offices in Lagos, the commercial capital. “There’s a lot of competition and that’s what we need to discuss: how they’ve arrived at” the conclusion the market isn’t competitive.
The NCC isn’t specific on whether MTN needs to raise or cut its tariffs and hasn’t said the company has abused its market position, Goschen said. Prices across Nigeria’s mobile-phone operators have dropped 50 percent over the past year, showing that the market is competitive, he said.
Nigeria, with a population of more than 160 million, had about 109 million mobile phone subscribers at the end of 2012, according to the NCC. MTN Nigeria was the market leader with 47.4 million customers, Nigeria’s Globacom Ltd. had 24.1 million, Mumbai-based Bharti Airtel (BHARTI) had 23.1 million, and Abu Dhabi-based Emirates Telecommunications Corp. (ETISALAT), known as Etisalat, had 14.9 million, according to data on the NCC’s website.
Goschen expects a meeting to take place between MTN and senior NCC officials during the week starting May 13.
“We are engaging with them,” he said. “We’ll have a meeting and clarify some of these issues.”
MTN Nigeria is “confident” it will hit its target of adding 7 million subscribers by the year end and “there may be some upside” after 3.9 million new customers joined the network in the first quarter of this year, Goschen said.
MTN Nigeria’s data subscriptions, which reached 22.8 million in the first quarter, are continuing to grow because of increased use of smartphones in Africa’s biggest oil producer, Goschen said.
The company’s revenue from data in Nigeria increased by about 64 percent in the first quarter year-on-year in local currency terms, the company said on April 25.
“The key for us is to get smart phones in our subscribers’ hands so we’ve done a number of initiatives in that regard,” said Goschen. “We’ve partnered with the independent resellers of devices” and “our outlets we’ve converted to be much more device-orientated.”
MTN doesn’t expect many customers to take advantage of a new rule approved by the NCC that allows mobile-phone users to change service providers and retain their numbers because many Nigerians have multiple phone numbers with different operators already, Goschen said.
Subscribers use multiple numbers to take advantage of promotions and to get stronger phone signals in different areas, he said.
To contact the reporter on this story: Chris Kay in Lagos at firstname.lastname@example.org
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