Big telcos suffocating local ones, says telecom lawyer, Ayoola Oke

By Adeleye Kunle

Mr Ayoola Oke, a telecom lawyer, has warned that over 90% of domestic telecoms operators may go bankrupt within the next five years.

According to the ICT Legal and Regulatory Expert, who was also Special Assistant to the Former EVC of the Nigerian Communications Commission, NCC Engr. Ernest Ndukwe, the larger telecom operators are suffocating the local small ones.

According to Oke, the industry, which was previously divided into three tiers, is now essentially operating as a one-tier industry in which the big swallows the small.

He expressed regret that almost all of the tier 2 and 3 operators who were active and vibrant 14 years ago are now dead or struggling, leaving the tier 1 operators with little or no competition that will lead to improvements.

He claims that none of the local Tier 3 operators have been able to grow to become Tier 2 operators because they are dying, and that if the homegrown operators die out, the country will be left with a Tier 1 oligopoly.

He cited one of the evils killing the industry as larger operators asking smaller operators to pay termination rates in dollars rather than the country’s legal tender, the naira.

“It is not a prophecy; if certain regulatory steps are not taken and things are not done properly, more than 90% of homegrown local telecoms operators will most likely die in the next 5 years, which will be disastrous for the country,” he said.

“The way the industry is currently structured, the larger operators are suffocating the smaller ones.”

“There are three tiers in the industry.” Tier 1 is occupied by large network operators such as MTN, Glo, Airtel, and 9Mobile. Tier 2 includes operators such as Starcomms, Multilinks, Visafone, and others, while Tier 3 includes small operators such as Internet service providers, data access service providers, Swift telephone networks, rainbow net, and others.

“Tier 2 is already extinct, and none of the Tier 3 have been able to grow to become Tier 2 because they are also dying.”

“When they all die, we will be left with an oligopoly in which a few large operators, mostly originally foreign owned and controlled, will dominate the market to the detriment of the country.”

“For example, in December of last year, NCC determined the International Termination Rate. The larger operators are suddenly interpreting the Determination to mean that the smaller operators must pay them in dollars for even the downstream portion of international traffic.

“Meanwhile, such conduct is illegal and in violation of Sections 15 and 20 of the Central Bank of Nigeria Act.” Demand is expressly criminalized in Section 20 of the CBN Act.

“As a result, small operators are being disconnected by large operators for flimsy reasons without the NCC’s knowledge.” He stated.

He urged the Ministry of Communications and Digital Economy and the National Communications Commission to implement policy restrictions and regulatory measures, respectively.

Oke proposed asymmetric regulations in which the Commission exerts greater control over the large operators so that their weight does not crush smaller operators.

Ayoola, who praised the Commission for its dominance and significant market power, suggested that they be more proactive in conducting timely investigations on big operators whenever they disconnect smaller operators.

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