Sunday, 27 July 2014

FG moves to end anti-competitive tendencies in business practice

By on 22:14
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Olusegun Aganga, Minister of Industry, Trade and Investment
Federal Government plan to formulate a policy to checkmate monopoly, anti-competitive behaviour especially among business practices has been considered by Nigerians as cheery news.
In its draft copy of the National Competitive and Consumer Protection Policy, the Federal Government saddled the Competitive and Consumer Protection Authority, an independent body, with the responsibility for the implementation of the provisions of the proposed competition and consumer protection legislation. Speaking at the occasion, Olusegun Aganga, Minister of Industry, Trade and Investment said the new policy will help address cartel-like organisations, anti-competitive tendencies, protect the investing public and consumers, and enable consumers to buy the goods and services they want at the best possible prices. “Nigeria”, the minister said, ‘is one of the very few countries that did not have a robust legal and regulatory framework to govern consumer protection and competition.”
Kehinde Yusuf, 53, is one of the many Nigerians who have hailed the move. He cited practices of a Pay TV operator as one which needs urgent attention in that area. “I’m a DStv subscriber, and I have severally complained about being cut off two, sometimes three days before expiration of my subscription date”, Yusuf said. “But whenever I make this complaint nothing is done, so if Government wants to introduce that policy I think it would do well to address some of these issues”.    
Obinna Nwokennaya is a multiple subscriber. Nwokennaya subscribes to both DStv and Star Times. And in his reaction on the Pay TVs service delivery, he said “where a customer fails to pay subscription fee on or before due date, it takes DStv hours, if not days, to come back to transmission, but for Star Times, it is immediate, even after two weeks off air”.
Following the liberalization of broadcasting in the Nigerian market in 1992, Multichoice, a South Africa based company and owners of DStv and GOtv since 2006, has dominated the industry, and engaged in monopolistic practices especially on the exclusive acquisition of the broadcast rights to premium programs.
And sport is known as one of the key drivers of Pay TV subscriptions around the world. In this regard, Multichoice, a South Africa based company and owners of DStv and GOtv has dominated the scene. Multichoice airing of the English Premier League, EPL rights exclusive to DStv, while refusing the rights to other competitors, increased its market share in Nigeria.
Nigeria’s Cable television market, according to statistics, is put at 2 million, out of 29.5 million TV households. The statistics states that, ‘the current total active market is less than 3.1 million subscribers across all players in the Pay TV market in a population of over 160 million inhabitants, 65 percent of whom are under the age of 25, and low penetration of households.’  
Put more succinctly, Naspers, owners of Multichoice stated to have added a record 1.3 million Pay TV subscribers year-on-year for period ending March 31, 2014. While presenting its annual results in June 2014, the Pay TV operator said its Pay TV service under DStv and GOtv brands subscriber base now stands at more than 8 million - roughly 5 million of those in South Africa and the remaining 3 million in Sub Saharan Africa. The report also stated that GOtv, which offers DTT pay television services in 11 countries on the African continent, ended March with 817,000 customers, up from 377,000 a year earlier.
Multichoice’s sports content is one of its dominant factors. “Multichoice essentially decides how African, and indeed Nigerians consume sports media,” said a communication expert who craves anonymity. “They control the times of broadcasting, what sports are shown and how the viewers will even view the event, because they have the control. And the absence of anti-competitive laws contributes to the dominance”.
Sport has not failed to escape the scrutiny of competition authorities. In the Western world, through regulatory bodies, competition is promoted, and interests of consumers are guarded in relation communication matters. In the United Kingdom, Office of Communications (OFCOM), an independent regulator and competition authority responsibility covers content and infrastructure in the country’s communication sector. Under the Communications Act, 2003, its statutory duties are ‘to further the interests of citizens in relation to communication matters, and to further the interests of consumers in relevant markets, where appropriate, by promoting competition’.
In the UK where the sale of the EPL broadcast rights is regulated to avoid exploitative activities by a single broadcaster, it would be recalled that in March 2010 OFCOM imposed a ‘wholesale must-offer’ obligation, under which Sky, one of the country’s foremost Direct to Home Cable Television Service Provider, was compelled to make its two main sports channels (Sky Sports 1 and 2) available to other Pay TV retailers at regulated prices. Not only did OFCOM require the pay broadcaster to whole the two channels to other operators, but also fixed prices.
Even in Asia same is obtainable. Telecom Regulatory Authourity of India (TRAI), India’s regulatory body, also prohibits monopoly and anti-competitive behaviour. TRAI is primarily involved with issues of carriage and pricing. The Central Government in pursuance of its Cable Television Network (Regulation Amendment) Bill made it obligatory for every cable operator to transmit or retransmit the programme or channels of any other pay channel, thus eliminating the need of multiple set top boxes by any subscriber.
Coasting home, Nigeria’s National Broadcasting Commission (NBC) should play the regulatory role here. But the power to wield the big stick, and to who, is absent in its Act. “Ordinarily,” said a credible source in NBC “we should play a significant role here as a regulator. But in the NBC Act and Code as amended, its major regulatory approaches contained in the Code are licensing, sanctioning, arbitrating, and monitoring. It lacks the inclusion of sector specific provisions empowering it with the authority to investigate, regulate, control and prosecute anti-competitive behaviour”. No doubt this has called for need of the commission to review its Code: “in areas of market definition, vertical integration and downstream foreclosure, access to and exclusivity over premium content, which is potential for anti-competitive behaviour,” the NBC source added.
Onyekachi Ubani, immediate past Chairman, Nigerian Bar Association (NBA) Lagos Chapter does not think the Pay TV has been fair to Nigerians despite the fact that the Pay TV has exported the country’s entertainment industry outside the shores of the land. “They are cheating Nollywood actors with little or nothing they pay in using their works, yet they defraud Nigerians with astronomical fees for subscription”, the human rights lawyer said. A Nollywood source, who craved anonymity didn’t mince words, “Multichoice buys a movie from us for N20,000, and they keep playing it years on end without giving us anything again”.
Festus Keyamo, human rights lawyer and DStv subscriber shares self experience. “They are exploitative in their service delivery”, said Keyamo, who told our correspondent that he is a subscriber in three major cities of the country. “That is why I continue to say they should adopt card technology, whereby I can remove my card when I’m not watching and use in another city, like paying for what I watch”. 
But the feasibility of that is not in sight. John Ugbe, Managing Director, Multichoice Nigeria Limited in a recent interview in commemoration of Multichoice’s 20 years celebration in the Nigerian market said, “You have to look at the industry. Not all industries can use card technology”, he said, giving an analogy. “It is like going into a restaurant and you say look, let me just starting eating. If I have to leave, whatever I eat is what I pay. It is in order to serve you, that they create the menu that you can buy a plate of food at certain amount. Content, unfortunately, is not paid for in minutes”.
Despite its bouquet of channels, Multichoice was forced to cut down its price with its introduction of GOtv. Entrant of Star Times, a Chinese owned pay DTT rivaled Multichoice as a major challenger in Nigeria.  
Star Times General Manager, Justin Zhang, in December 2013 stated that since it launched in July 2010, the company has recorded over 1.5 million customers. This statistics significantly proved the potential of low-cost Pay TV.

It is this desire for robust competitiveness that created a sigh of relief for consumers in the telecommunication sector. It would be recalled in years past that MTN charges per call was outrageous, until the introduction of Globacom, an indigenous telecommunication company came into the market and introduced per second billing before we understood the possibility of talking cheap. And it is expected that with the recent introduction of the Federal Government policy this will address and encourage competition in the domestic market as well as maximize consumer welfare.

Gbenga Dan Asabe

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