SUBSCRIBERS MAY PAY MORE FOR TELECOMS SERVICES, MTN WARNS

Subscribers to the MTN network in Nigeria should be prepared to pay more for telecoms services if the Federal Government makes its licence conditions more stringent, Africa’s biggest phone operator has said.MTN’s Chief Financial Officer in the country, Mr. Andrew Bing, in an interview with Bloomberg, published yesterday, said the company, which with 57.18 million subscribers controls 45 per cent of the market share, according to data from the Nigerian Communications Commission (NCC), would be forced to pass on the cost to subscribers should the federal government do so.
“Tougher rules, tougher regulations, greater demands ultimately will impact price, the more you charge up front or the more you demand over a period of time, well somebody has to pay for it. Ultimately the subscribers are the people who will have to pay,” Bing added.
The Federal Government, according to Bloomberg news, will probably revalue the MTN phone spectrum and will push to have improving service and infrastructure written into the contracts as MTN’s licence expires in 2016.
Nigerian Communication Commission (NCC) the same month fined the three biggest mobile operators, including MTN, for the quality of their service and prohibited them from selling new SIM cards in March, the first time the punishment was imposed along with a financial penalty.
Nigeria has 167 million mobile phone subscriptions as of February 2013, according to the Nigerian Communications Commission (NCC). With many subscribers owning more than one phone, user numbers will probably grow to more than 200 million in 2017, Londonbased research company Informa Telecoms & Media estimates. The population is about 170 million.
At the same time the company has spent about $5 billion to $6 billion in expanding capacity in the past three years. “It’s bigger than the power sector combined, it’s bigger than the cement industry, but they get away with everything,” said Bing, 49, who will go on sabbatical leave from the company at the end of this month.
“Yet everybody wants a piece of us.” Prices have come down in the past three years in Nigeria, MTN Nigeria’s Chief Executive Officer Michael Ikpoki, also said in the interview. NCC has to allow phone companies to make “decent margins” or it will negatively affect investment, said Ikpoki.
“We are already operating under fairly stringent conditions,” Ikpoki said. “I don’t know what can be tougher than this.” MTN has fallen 1.9 per cent this year in Johannesburg and closed on Monday at 212.85 rand, giving it a market value of 398.7 billion rand ($37.9 billion). The company struggles with power supply and cut to its fiber-optic network, making it a challenge to meet the regulators standards.
Hundreds of cuts are made a week to MTN’s cables in the country due to negligence as roads are constructed or dug up, as well as malicious damage, said Bing. Last year MTN spent about N34 billion ($214 million) on diesel to power its base stations across the country due to a lack of regular electricity in Nigeria, said Ikpoki.
Source: New Telegraph