When it rains, it pours. Major news outlets are reporting that Etisalat Nigeria is squaring off in court against its bigger, yellow counterpart. The problem? MTN’s acquisition of Visafone, a CDMA wireless operator.
As far as we know, the acquisition is a done deal. The Nigerian Communications Commission reportedly okayed the deal a few weeks ago. Which is interesting because MTN and the NCC are also in court over how much in fines the telco has to pay for failing to disconnect the users of unregistered SIM cards since late 2015.
According to reports, Etisalat believes the Visafone deal will grant MTN an unfair market advantage. The most obvious strategic motive for acquiring Visafone was for its 800Mhz spectrum license, which can be used to deploy internet speeds than are faster than current network averages, it would seem.
Etisalat is also said to be unhappy that the Visafone acquisition “bid” was not made open for other players to participate in.
I’m not quite sure why the sale of a private company must be a public auction, but then again, when companies cite unfair competitive practices, the whole point is to drag these transactions into the open for public scrutiny, to ensure that it does not lead to a market situation in which one corporate interest is so dominant that it can screw the end consumer with impunity.
The MTN/Visafone deal has been in the offine since early 2015, so Etisalat had a long time to complain about this. The fact that this lawsuit is only coming now is probably because it couldn’t find another way to stop the deal from happening.
MTN is the largest telco in Nigeria, with almost 50 percent marketshare. Etisalat Nigeria, the smallest of the big four, owns about 20 percent, but is trying hard to do an end run around the preceding competition by positioning itself as a compelling mobile internet service provider. Dwindling voice revenues brought on by the onset of widespread mobile internet adoption have forced telcos across the continent to look to data-driven (internet data, not the other kind of data) business models.