Competition policy and Determination of Dominance in Nigerian Telecommunications Market

1. Competition policy: Determination of
Dominance in Nigerian
Telecommunications Market
Mohammed Kyari

2. Synopsis
 Introduction
 Competition practice regulation
 Determination of Dominance
 Violation of Dominance Requirement
 Conclusion
 References

3. Introduction
 Competition Policy refers to:
 Competition policy aim to promote competition, make
markets work better, contribute toward efficiency and
technological innovation.
Governme
nt Policy
Competitio
n Law
Economic
Regulation

4.  The Nigerian Lower chamber the House of Representatives has
passed a Bill that seeks to, establish the Federal Competition and
Consumer Protection Commission on 20 Mach, 2017, to promote
healthy business competition and strengthen consumer rights the
bill now awaits the assent of the Senate and the President to
pass into law.
 Meanwhile the sector-specific approach to competition laws is in
practice. Namely, among others the Investments and Securities
Act 2007, the Nigerian Communications Act 2003 (“NCA”), the
Electric Power Sector Reform Act 2005.

5. Competition Practice Regulation
 For the Telecom Market the NCA and the Competition
Practice Regulation are the main laws for competition in
Nigeria.
 The provisions of section 91(1) of the NCA prohibits
Licensees from engaging in conduct which has the purpose or
effect of substantially lessening competition in any aspect of
the Nigerian communications market, section 91 (2) permits
the Commission to publish guidelines or regulations from time
to time which clarify the meaning of “substantial lessening of
competition” and section 92(4 ) permits the Commission to
direct any Licensee in a dominant position to cease conduct
which has or may have the effect of substantially lessening
competition in any communications market and to implement
appropriate remedies.

6. Nigeria is the fastest growing telecommunications market
in Africa, rising from a 75 million active telephone
subscribers in 2009 to over 150 million as at January
2017
74,518,264
95,886,714
127,606,629
151,017,244 154,660,446
2009 2011 2013 2015 Jan-17
Active TelePhone Subscribers
Active Telephone Subscribers Linear (Active Telephone Subscribers)

7. DETERMINATION OF DOMINANCE
With Over 150
Million Active
Subscribers
Nigerian Communications Commission (NCC) conducted a Study on
determination of dominance to ensure fair competition in all sectors of the
Nigerian communications industry and assess the level of competition.
In 2010, based on the available evidence and submissions of stakeholders, no
licensee held a position of market dominance in the Mobile Telephone Services
market and International Internet Connectivity (IIC) market. The Commission also
determined that no group of two or more licensees held a position of joint or
collective dominance in that market.
Four Major
Players

8.  In the study of 2012, it was observed that the mobile voice
market is not effectively competitive and is still highly
concentrated with an HHI of 3063. MTN Nigeria has a 44%
market share of subscribers within this market. There is also
a wide differential (of about 300%) between on‐net and
off‐net calls and this is indicative of the likely establishment
of a calling club for MTN subscribers.
 MTN and Glo jointly control about 62% of the public
terrestrial transmission infrastructure. There are concerns
that Operators playing in the wholesale and retail
sub‐segments of these markets have the leverage to
“squeeze” the margins of their competitors who are also
their customers.

10. MTN Nigeria was
designated a
dominant operator in
the voice segment of
the Market.
MTN Nigeria &
Globacom Nigeria
were designated as
joint dominant
Operators in the
Wholesale leased
lines and transmission
capacity sub‐segment
of this market

11. The Dominant Operator is required to adhere
to
a) Accounting Separation:
b) Collapse of On‐net and Off‐net Retail
Tariffs
c) Submission of Required Details:

12. Violation of Dominance Requirement
Cases of violation of dominance was
observed in the requirement
◦ to collapse on-net and off-net tariff.
◦ Separation of account

13. Conclusion
 The Federal Competition and Consumer Protection
Commission awaits the assent of the Senate and
President to pass into Law
 The NCA and the Competition Practice Regulation are
the main laws governing competition law in the telecom
market in Nigeria
 MTN Nigeria is the dominant operator in the voice
segment of the market.
 Globacom Nigeria and MTN Nigeria are the joint
dominant in the Wholesale leased lines and
transmission capacity sub‐segment of this market

14.  GSMA Competition Policy Handbook
 http://ncc.gov.ng
 NCA 2003
 https://www.gsmatraining.com/lessons/competition
-policy-digital-age-session-4/#temp_container
 https://i1.wp.com/technologytimes.ng/wp-
content/uploads/2014/05/Nigeria-Telecoms-
Market-Share.jpg
 https://tommakau.com/2016/04/23/will-safaricom-
be-declared-a-dominant-operator/

15. Thank you