Economics + WealthStrategy

MTN in court battle with South African rival… but stays alert in Nigeria

The battle for market share and relevance spreads. 

MTN in court battle

The rivalry in the telecom market is spreading across the continent.  Africa’s biggest wireless carrier MTN Group Ltd. has mounted a legal challenge against Telkom SA SOC in bid to prevent further delays in South Africa’s long-awaited release of additional broadband spectrum.

MTN filed court papers on Friday January 7 seeking to oppose Telkom’s attempt to halt the Independent Communications Authority of South Africa from auctioning spectrum in March, it said in a statement. The auction is seen by the government as a critical structural economic reform needed to revive the country’s coronavirus-battered economy by unlocking investments in broadband and lowering data costs.

“A successful spectrum auction has the capacity to not only release much-needed funds into the national fiscus, but it will have an immediate impact on consumers,” said MTN, adding that no additional spectrum has been added to the industry for 14 years.

MTN and South African market leader Vodacom Group Ltd. have long called for more spectrum to expand their data services and boost revenue.

While the plan was approved in October, Telkom this week filed an urgent court application to prevent regulator ICASA from holding a spectrum auction in March, calling the auction process unlawful and illegal.

The move by Telkom, which won a court order last year forcing the regulator to review its auction process and delay it to March this year, could potentially delay the country’s roll out of 5G and expansion of 4G capacity seen as critical for access to digital services and cheaper data costs.

In a statement, MTN said, “while the current ITA (Invitation to Apply) is not perfect, we believe the regulator has tried to strike a delicate balance for all players.”

MTN, Airtel and GLO rivalry in Nigeria.

MTN in court battle

Meanwhile in Nigeria, the telco sector has long promised to emerge as the country’s new oil. The sector contributed almost 18% to Nigeria’s GDP last year. How soon that dream materializes would be largely dependent on the speed of technology adoption, improvement in service and overcoming the security and infrastructure challenges.

The Federal Government had earlier announced that the Five Generation (5G) network will be rolled out in Nigeria in January 2022, but how soon this will become a reality remains to be seen.

From a brand and marketing perspective, Nigeria now has almost 200 million voice subscribers making it one of the most dynamic markets in the world. It is also fiercely competitive, but the biggest battle is the second position where Airtel and GLO have been slugging it out for years.[1]

Airtel currently has a slight edge with 53.7 million subscribers with GLO following closely with 52.7 million. 9mobile is in 4th place with 12.6 million subscribers, while MTN has the lion share and stands on top of the of the market with over 80.3 million subscribers.[2]

Will the latest legal battle in South Africa affect Nigeria’s MTN and its battle with its top two rivals, Airtel and GLO? It could be a distraction at best, but it is not likely to have a significant impact. The Nigerian market is extremely lucrative. With Airtel and GLO nibbling at its wings, MTN would not want to blink or take its eyes off the ball for too long.

Article Sources

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1 Bloomberg
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