Help! Big Telcos Killing Small Ones

Some large telecommunications companies in Nigeria are actually abusing the market power they have amassed in recent years and are emasculating smaller operators, though the Nigeria Communications Commission (NCC) thinks otherwise, Nigeria CommunicationsWeek can now reveal.
The operators hide under the absence of anti-trust law and lack of machinery to regulate monopolistic and anticompetitive practices by powerful companies.
The telecom industry is currently subsisting under the anti-trust provision enshrined in the NCC’s Act.
That provision has been found to be defective because it does not protect other sectors of the economy. Experts said that the way forward is the institution of anti-trust law.
Anti-trust law seeks to make businesses compete fairly. Premised on the belief that free trade benefits the economy, businesses, and consumers alike, the law forbids several types of restraint of trade and monopolization.
Nigeria CommunicationsWeek gathered that it falls into four main areas: agreements between competitors, contractual arrangements between sellers and buyers, the pursuit or maintenance of monopoly power, and mergers.
Adewale Jones, managing partner, Ashfield and Bowman, said the absence of anti-trust law has negative and far reaching effects on the economy.
According to him, anti-trust law can only help bolster the economy, adding that free and open competition benefits consumers by ensuring lower prices, and new and better products.
Nodding in agreement, Bayo Banjo, managing director, Disc Communications, warned against the emergence of private monopolies.
Banjo who spoke at the annual general meeting of Association of Telecommunications Companies of Nigeria (Atcon) in Lagos at the weekend, said that already smaller operators are being pushed out of the market by large operators with huge financial war chest.
Nigeria CommunicationsWeek gathered that there are occasions where entrenched operators deliberately limit the size of interconnection between it and other operators in order to attract even more customers to their own networks.
There are also cases where large operators have arm-twisted smaller players and taken their ideas and business proposals.
Jones and Banjo also agreed that there is need for smaller businesses to exist and that the only way to guarantee that is the early establishment of anti-trust law.
Nigeria CommunicationsWeek gathered that anti-trust laws protect competition. In a freely competitive market, each competing business (large or small) generally will try to attract consumers by cutting its prices and increasing the quality of its product or services. Competition and the profit opportunities it brings also stimulate businesses to find new, innovative and more efficient methods of production.
Consumers benefit from competition through lower prices, better products and services. Inefficient firms or companies that fail to understand or react to consumer needs may soon find themselves losing out in the competitive battle.
But the NCC recently said that major telecom operators either alone or collectively does not pose any major threat to the telecoms market.
Deriving from its regulatory inquest, the apex regulator said that it “has not found any conclusive evidence that any of the mobile licensees are engaging in conduct which has the purpose or effect of substantially lessening competition.”