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Dominance in telecoms sector: MTN loses cases against NCA

BY: Emmanuel Ebo Hawkson
Mr Selorm Adadevoh — CEO of MTN Ghana
Mr Selorm Adadevoh — CEO of MTN Ghana

Mobile telecommunications giant, MTN, has lost its legal battle challenging a decision by the National Communications Authority (NCA) to classify it as a significant market player (SMP) in the telecommunications industry, a tag that means MTN is the dominant player in the industry.

In a ruling yesterday, the Commercial Division of the Accra High Court held that the NCA did not breach any law throughout the processes that had led to MTN being classified as a SMP.

The ruling by the court gives the green light to the NCA to take corrective measures against MTN in order to promote competition and protect other mobile network operators and consumers.

Apart from dismissing the case, the court presided over by Justice Samuel Asiedu, a Justice of the Court of Appeal with additional responsibility as a High Court judge, also awarded costs of GH¢10,000 against MTN.

Lawyers for MTN were Mr Anthony Forson Jnr, the President of the Ghana Bar Association (GBA), and Mr Samuel Cudjoe, while Mr Gary Nimako Marfo was the lawyer for the NCA.

MTN’s reaction

In a reaction, the Corporate Services Executive of MTN, Mr Sam Koranteng, told the Daily Graphic that his outfit was studying the ruling by the court and was looking at all options available to it.

He said that the decision of the court would expand the scope regulatory framework of the telecommunications sector and that MTN was amendable to dialogue with the NCA over the matter.

SMP classification

The SMP classification means the NCA has come to the conclusion that MTN controls more than 40 per cent of the telecommunications industry and, therefore, as mandated by law, the NCA can take remedial measures against MTN to curtail its market dominance in order to promote competition in the industry and also protect the interest of consumers.

Pursuant to Section 20 (10) of the Electronic Communications Act, 2008 (Act 775), on June 9, this year, the NCA classified MTN as a SMP, after the regulator had determined that the mobile network operator controlled more than 57 per cent of the voice market share, as well as more than 67 per cent of the data market share.

Act 775 allows the NCA to take “corrective measures” against a SMP in order to promote competition, protect other mobile network operators and consumers.

As part of the corrective measures, the NCA, among other things, decided to “review and approve all charges by MTN”, set caps on what MTN can charge for its services, ensure that MTN’s access to information did not disadvantage other operators and also impose a 30 per cent interconnect rate for two years in favour of other “disadvantaged operators”.

MTN’s case

Just two weeks after the decision by the NCA, MTN filed a judicial review application, urging the Accra High Court to quash the NCA’s decision to classify MTN as an SMP.

It further wanted an order of prohibition restraining the NCA from going ahead to implement the SMP classification and its ensuing corrective measures.

It was the case of the telecommunications giant that the NCA treated it unfairly because it failed to give it a hearing, in violation of the rules of natural justice and as stipulated by Article 23 of the 1992 Constitution and Section 25 of the National Communications Act, 2008 (Act 769).

NCA defence

Mr Marfo, however, refuted the claims by MTN and argued that the NCA adequately engaged MTN on the implementation of its new status as an SMP.

Counsel further contended that MTN was in court not because of the process leading to its classification as an SMP but rather to resist its new status.

“It is clear that the essence of the application is MTN’s resistance to being declared an SMP because of the economic effect on its operations, and not the process,” he submitted

MTN was given a hearing

In its ruling, the court upheld the case of the NCA and held that the evidence before the court, including what was presented by MTN, proved that the company was made aware and was fully involved throughout the whole process that led to the NCA classifying it as an SMP.

According to the court, as far back as 2014, the NCA informed MTN and all mobile network operators about its decision to engage a consultant to conduct a research to determine whether there was an SMP in the telecommunications space.

The court held that MTN was given an opportunity to partake in the process, and it duly wrote a letter on September 12, 2014 to make an input and contributions to the work of the consultant that led to MTN being classified as an SMP.

“A party who has been given an opportunity to participate in the exercise cannot turn around to complain that it has been denied hearing, leading to a breach of the rules of natural justice,” Justice Asiedu held.

Premature

He further ruled that MTN failed to adhere to the laid down processes, as stipulated by law, to seek redress against the NCA.

According to the court, it was premature for MTN to seek redress in court because per the combined effect of Section 20 (12) of Act 775 and Section 25 (2) and (4) of Act 769, MTN had the right to apply to the NCA to review its decision to classify it as an SMP.

It was the view of the court that there was no evidence showing that MTN took advantage of the redress procedure under acts 775 and 769 before heading to court

“Certiorari is a remedy of last resort and, therefore, where other alternative and effective remedies exist, an applicant for certiorari is certain to be asked to exhaust the available alternative remedies,” Justice Asiedu held.