In a dynamic and rapidly evolving sector like telecommunications, regulatory interventions can significantly impact the competitive landscape. Striking the right balance between encouraging innovation, ensuring consumer interests, and preventing monopolistic tendencies is paramount.
The telecommunications landscape in Nigeria the largest economy in Africa is shared amongst four industry players – MTN, Airtel, Globacom and 9mobile. MTN takes the lead with the largest market share, distantly followed by Arab-owned Airtel. The indigenous-owned Globacom comes third and 9mobile with the least market share index.
Just recently, the National Association of Telecoms Subscribers (NATCOMS) has raised concerns over MTN’s potential acquisition of Emerging Markets Telecommunications Service Limited (9Mobile) and is urging the Nigerian Communications Commission (NCC) to intervene. The primary apprehension voiced by NATCOMS is the risk of creating an oligopoly in the Nigerian telecom market if the acquisition scales through.
Deolu Ogunbanjo, President of NATCOMS, emphasized that MTN already holds a substantial share, nearly 50%, of Nigeria’s telecom market. From NATCOMS’s perspective, allowing MTN to acquire 9Mobile could further consolidate its dominance, limiting healthy competition in the sector.
Notably, reports suggest that MTN Nigeria’s pursuit of acquiring 9Mobile is in the advanced stages, signaling a significant development in the telecom landscape. The question at the forefront is whether the telecom regulator, NCC, will heed NATCOMS’s call to halt the acquisition or allow the deal to progress.
To comprehend the context of 9Mobile’s decision to sell its spectrum, a glance back to 2017 is essential. The telecom company faced financial challenges following the departure of its primary technical partner and investor, Mubadala of the United Arab Emirates (UAE). This departure, coupled with economic downturn and currency valuation issues, led 9Mobile to explore the option of selling its spectrum.
The financial turmoil escalated as 9Mobile reportedly defaulted on a loan repayment scheme amounting to $1.2 billion. The company attributed its inability to meet the repayment obligations to adverse economic conditions and the devaluation of the Nigerian naira.
This isn’t the first time MTN has ventured into acquiring 9Mobile. In 2017, a similar attempt was made by MTN, marking a recurrent interest in the telecom company.
As the telecom industry and regulatory bodies navigate this potential acquisition, critical questions emerge about the future steps. Will the NCC accede to NATCOMS’s request, stalling the acquisition to address concerns of market concentration? Alternatively, will the acquisition proceed, possibly reshaping the telecom landscape in Nigeria?
The outcome remains uncertain, and stakeholders, including subscribers, industry experts, and investors, are keenly observing how events will unfold. The delicate balance between fostering healthy competition and allowing market players to grow and expand will likely influence the regulatory decision.
In conclusion, the telecom saga in the Nigerian telecom industry underscores the intricate nature of mergers and acquisitions particularly in emerging markets. The decision of whether the regulatory body will permit or halt MTN’s acquisition of 9Mobile will inevitably shape the future dynamics of Nigeria’s telecom industry in the country.
For now, the telecom community and the public await further developments, anticipating the decision of the NCC that will define the next chapter of telecommunication in Nigeria.