Telcos go to war in Africa

etisalat nigeria
Etisalat Nigeria appoints three directors. (Image Credit: Darryl Linington)
etisalat nigeria
The battle commenced after Etisalat claimed that the NCC had allegedly given its competitor MTN Nigeria a market advantage over it. (Image Credit: Darryl Linington)

African telecommunication companies have hit the headlines hard this week as MTN Nigeria and the Nigerian Communications Commission (NCC) are set to face Etisalat in a Federal High Court battle in Lagos.

The battle commenced after Etisalat claimed that the NCC had allegedly given its competitor MTN Nigeria a market advantage over it.

MTN joins NCC in the suit as co-respondent. Etisalat is seeking a review of a decision by NCC to allow a 30 percent differential between MTN’s off-net and on-net retail mobile voice tariffs.

According to Etisalat, this differential enables MTN to create a ‘calling club’, an example of which is its ‘Family and Friends’ promotion, which offers a rate of NGN 0.11 per second to eight MTN subscribers and two non-MTN subscribers. Etisalat said this differential is a breach of NCC’s Determination of Dominance in Selected Communications Markets in Nigeria regulation.

According to a report via, Justice Mohammed Idris of the Federal High Court in Lagos has fixed August 3 for the hearing of a suit filed by Etisalat Nigeria Limited against the Nigerian Communications Commission (NCC).

Telkom VS. Labour Union Solidarity
Telkom, who is being opposed by labour union Solidarity, revealed the next steps in its latest turnaround strategy. According to Telkom, it respects the decision of the Labour Court handed down on 8 July 2015. In line with the judge’s order, Telkom immediately withdrew the Section 189 notices on the same day the order was issued, with regard to the technology and centre for learning divisions.

According to Telkom: “We have to take decisive action to curtail further business losses and have therefore decided to look at a number of cost containment options. Some of these measures will require engagement with organised labour, which will be initiated as and when required.”

The measures include but are not limited to:

– A wage freeze
– Investigating flexible working hours (flexi-time)
– New methodologies to improve productivity
– Upgrading employees’ skills
– Reduced working hours in the form of a shorter work week
– Potential outsourcing options
– Voluntary severance packages (VSPs) and voluntary early retirement packages (VERPs)

According to Telkom, packages on offer will be significantly more generous than those required by law and will be available to all non-unionised staff. Telkom will engage with organised labour and will be seeking the consent of the unions to extend the offer to union members as well.

Safaricom VS. Airtel
Safaricom and Airtel have also been at loggerheads recently. Safaricom had taken another swing at rival, Airtel in June 2015. Safaricom revealed that it felt resentment towards Airtel’s move to display the M-Pesa logo on its advertorial to market the Airtel Money Service. In July 2015, it looks as though both companies are now facing off once again.

Safaricom has taken a swing at Airtel for allegedly courting politicians to back proposed rules seeking to have the former declared a dominant player in the market. The mobile operator has also alleged a ploy to remove provisions allowing telco regulator – Communications Authority of Kenya (CA) – to test levels of dominance in a telco player.

Safaricom CEO, Bob Collymore stated that: “The new regulations will criminalise Safaricom if the dominance abuse test is removed, adding that it will be against internationally accepted best practices.”

Airtel CEO calls for the regulation of over-the-top operators
With Safaricom and Airtel battling it out, Christian De Faria, Chief Executive Officer, Airtel Africa has also stated that Over-the-top service (OTT) providers must be regulated as they utilise and profit from the infrastructure put in place by mobile network operators.

The Airtel Africa CEO spoke during the 2015 International Telecommunication Union Global Symposium for Regulators in Libreville, Gabon where he challenged regulators to take action in building a structure that creates an equal playing field for all providers.

De Faria told delegates that OTT players are using operator platforms from which to offer services that cannibalise mobile network revenues. “Certain OTT providers understand both the issue as well as the need to work together to achieve a mutually beneficial solution,” commented De Faria. “We need each other.”

De Faria’s comments sparked a debate amongst regulators from around the world, highlighting the breadth and critical importance of the issue of determining the role and approach of regulators to ensuring fairness in a rapidly changing industry. The Airtel Africa CEO’s remarks were echoed by fellow panelist and operator Mr Bocar Ba​, Chief Executive Officer, Samena Telecommunications Council.

MTN Sued for N200m Over Breach Of Contract, has revealed that Lagos Lawyer, Charles Dumber Mekwunye, has slammed a N200 million suit on telecommunications giant MTN Nigeria Communication Limited (MTNN), over an alleged breach of contract.

The report reveals that Mekwunye, in his witness statement filed before a Federal High Court in Lagos averred that sometime in 2008, he was invited by Lotus Capital Limited and Stanbic IBTC Assets Management Limited to invest in a fund purportedly established by Lotus Capital called ‘Telecoms Private Equity Fund,’ which was an investment into MTNN Linked Units.

He added that he bought 5,000 units of the MTNN Linked Units at a rate of US $24.56, per unit in 2008 and paid $122,800, which was the equivalent of N18,376,800 million.

According to the report, he said both Lotus Capital Limited and Stanbic IBTC Asset Management Company, represented to him that at the end of three years, the MTN Nigeria’s Linked Unit would be exchanged for MTN’s shares in a Special Purpose Vehicle, which would be listed in the Nigerian Stock Exchange or another globally recognised stock exchange. This, he said, was primarily considered before investing in the shares.

However, at the end of the three years, Stanbic IBTC Asset Management in breach of the agreement, failed to create the Exit Special Purpose Vehicle, SPV, as agreed in the private placement memorandum, on ground that MTN International was already quoted on Johannesburg Stock Exchange.

According to, he further stated that on April 4, 2013, Lotus Capital informed him of an upward review of “management fees” without his knowledge or consent. The said management fees was arbitrarily reviewed to one per cent of the value of his investment and consequently took $5,250 as management fees deducted from total value of his MTN units each year.

The report reveals that, consequent upon the alleged breach of contract, the plaintiff is asking the court to declare that Lotus Capital is in breach of the contract for the sale of MTN Linked Unit shares it entered into with him on May 21, 2008, as there exists a fiduciary relationship between them.

Darryl Linington