In a move that has taken telecommunications industry analysts by surprise, Scancom Plc , the company operating in Ghana under the brand name MTN Ghana has withdrawn its case hitherto being heard at the Supreme Court, brought against the industry regulator, the National Communications Authority. The case was challenging the process by which the NCA had arrived at its controversial decision to categorize MTN as a Significant Market Player (SMP) which consequently giver the regulator authority to impose steps to curb what it terms “predatory pricing”, aimed at securing undue advantage over its competitors.
However the move is widely suspected to have resulted from a combination of several factors. Primarily the company realizes that from a strictly legal point of view it is most unlikely to be able to win the case – an Accra High Court had earlier ruled in favour of NCA on the same case – because due process was actually followed by the NCA which also acted within its authority, despite genuine questions as to how and why this authority is being used in the manner applied by the regulator.
In an official statement the company claims that it has rather opted to engage the NCA in “a concerted effort to settle the procedural and administrative legal challenge concerning the NCA’s declaration of MTN Ghana as a Significant Market Power (SMP)”.
The official statement goes further to explain that “Given the progress made so far, in good faith, on settlement discussions with the NCA, and Ministry of Communications, the company has withdrawn its application filed at the Supreme Court on September 4, 2020. It is our expectation that this action will pave the way for further discussions and an amicable resolution, in the spirit of the renewed channels of engagement.”
Adds the statement: “MTN Ghana identifies that a collective goodwill and commitment is necessary to help the entire industry thrive and support Government’s agenda to enhance connectivity and the availability of communication services in the country. We are convinced that this decision is in the best interest of our cherished customers, shareholders and other stakeholders.”
Analysts suspect that MTN has realized that even an unlikely legal victory over the NCA in this particular case would generate bad blood between the two which ultimately would not be in the best interests of the telecom services provider. Consequently, the company has simply decided to abide by NCA ‘s directives and let the public judge them based on the resultant impacts.
Here, MTN is confident that it will win in the court of public opinion even though it has lost in the court of binding law. Ultimately, the NCA’s directives to MTN will lead to higher tariffs payable by customers on its network for intra-network activity, and since the company has an overwhelming market dominance this will adversely affect the majority of telecom service users in Ghana.
The NCA is well aware of this but claims it is looking at the longer term; MTN’s pricing policy is giving it an increasingly dominant market share which ultimately would eliminate significant competition by which time it could choose to set its user tariffs inordinately high because of lack of options by the public.
Increased tariffs by MTN on intra-network services will now happen sooner than later – even though the NCA had informed MTN of its planned directives right after declaring it a SMP, the regulator had refrained from enforcing them until the court issues had been resolved, even though MTN’s case brought against it did not call for an injunction against the enforcement of the directives. But with the case at the Supreme Court now withdrawn, NCA will go ahead and enforce its new directives aimed at MTN.