A fresh controversy is trailing the telecom industry over MTN Nigeria’s acquisition of the last surviving Code Division Multiple Access (CDMA) operator, Visafone. Etisalat Nigeria has sued MTN Nigeria and Visafone Ltd., challenging MTN’s use of the 800megahertz (MHZ) spectrum following the acquisition of Visafone.
According to Etisalat, it considered the action necessary to prevent the use of the spectrum by MTN at this time, as it will entrench the dominance of MTN in the retail data services market as against other players.
Etisalat is aggrieved about the transaction, claiming the bid was not made open for other players to participate, and that the South African firm, which has been a dominant player in Nigeria, is enjoying too much favoritism, stating that the deal would further give MTN more powers to dominate other players in the industry.
MTN Nigeria was declared dominant by the Nigerian Communications Commission (NCC), in 2013 and remains dominant in the wholesale leased line and retail voice markets.
Etisalat’s Public Relations Regulatory and Corporate Affairs Division Officer, Chinesie Amanfo, confirmed that the firm has filed a suit against MTN over the acquisition.
Amanfo said Etisalat had, in addition to the legal action and in line with Section 86 of the Nigerian Communications Act, 2003, engaged the NCC to understand the basis of its decision to approve the acquisition.
“As you are aware, the matter is already in court as such, we are restrained from commenting further on the matter,” he added.
MTN Corporate Services and Human Resources Executive, Amina Oyagbola, had said the acquisition of Visafone would help to leverage resources for service enhancement and would deepen the growth and roll out of broadband services across the country in support of the National Broadband Plan, across the country, adding that the acquisition of Visafone was in line with a continued commitment by MTN to improve the quality of broadband services for its subscribers.
Visafone had in 2007, after procuring a Unified Access Service Licence, acquired Cellcom, Bourdex Telecom and ITN to launch its commercial operations. Today, out of over 12 CDMA operators, Visafone is the only active operator.
Before the acquisition of Visafone by MTN Nigeria last month, the GSM operators controlled about 98 per cent of the Nigerian market, while the CDMA controlled 1.58 per cent market share, according to statistics from the NCC.
CDMA operators were already going under, leaving Visafone as one of the two surviving CDMA operators, before MTN bought them over.