MTN yesterday went on the defensive after calls from Nigeria that it reduce its prices in that market and for the government to introduce tariff caps on mobile operators.
Parts of a report by the Ad Hoc Committee on GSM leaked to the media included demands that the regulations be adjusted to oblige companies to lower their prices. The rates MTN and other mobile operators in Nigeria charge are far in excess of the tariffs paid by cellular users in SA, which has led to continued allegations of profiteering.
However, MTN says it is spending more money in Nigeria than it did in SA, and that a lack of infrastructure and the need for importing dollar-based equipment increases its costs. In the period between its August 2001 launch in Nigeria and March 2002 the company reported a $26.3 million loss. It has warned investors that profitability in the country could be as much as five years off.
MTN owns 77% of its operation in Nigeria. It has spent more than R3 billion on establishing a network covering 11 cities and has earmarked R4 billion more for capital projects in the current financial year.
The company yesterday expressed confidence that Nigerian regulators would not change the rules under which it operates.
"MTN entered the Nigerian market on the basis of government`s promise of a stable regulatory and policy environment," it said in a statement. "MTN has confidence in Nigeria`s regulatory process and policy, and will continue to consult with the appropriate authorities to find effective and lasting solutions for the consumer.
"In our interaction with various regulatory authorities in Nigeria, government has not signalled any changes to our original licence conditions."
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