So yesterday I read about all NCC had to say on the issue of introducing a price floor. And I have some comments to make.
“The regulatory commission said that it feared that the price war could eventually lead to a monopoly in the telecom industry that would force small operators to shut down.
It said that monopoly in the telecom sector could also push the country back to the days of NITEL to the detriment of small operators in the sector. The Executive Vice Chairman of NCC, Professor Umar Dambatta stated this when he appeared before the Senate Committee on Communications.”
Well, Professor Dambatta kept mentioning NITEL in his statement, which I believe is a wrong example to make reference to because “in the days of NITEL” there was just one telecommunications company which is NITEL, no competitors, no rivals, no other company offering telecommunications services, and NITEL was owned by the Nigerian Government.
But right now we have so many private telecommunications companies, and out of these many, we have four(4) major companies not one. Therefore I do not see how this might lead to monopoly, I don’t think the four major telecommunications companies we have would allow one pass the other, which is not equal to monopoly. Unless Professor Dambatta has a different definition of monopoly that is not – (economics) a market in which there are many buyers but only one seller.
Then on the aspect of forcing smaller telecommunications companies to close or shut down. First I would start with what one of my friend said. He believes in the statement – “if you can’t beat them, join them”. He believes that if smaller or new entry telecommunications companies can’t find a way to survive in the market, then they should merge with the bigger companies to provide better services.
I once met Audu Maikori in an event and he made emphasis of the need for partnership and collaboration. He said everybody wants to be the head and alone, when if we collaborate, we could achieve greater things. What if we don’t need eight telecommunications companies, what if we just need working four? If these companies could merge they could give us that! Better services, less worries.
I on the other hand thinks that if any company should shut down, it is completely their fault and not the fault of major telecommunications companies. This is not the first time we have seen companies shut down due to pressure from the Market, but to blame a bigger company is wrong. A company can only shut down due to its own mistakes or wrong tactics/market strategy, that is if it had one. For a startup company, the board/team/management are suppose to have a break through plan, enough capital and focus to become as big as any other company in the market.
I believe non of these startup telecommunications in Nigeria have one and are now seeking the help of the government to survive? This scenario is like asking a teacher to intentionally fail a student so you who did not read can be on the same level with the brilliant student. Of course it is possible that these companies might have tried their best to gain market share, but Etisalat Nigeria tried to do the same thing in 2008, they slashed all the prices each telecommunications was offering at that time and sold out sim card almost free, even existing telecommunications giants could not keep up, it was a decision, strategy and sacrifice they had to make that got them to where they are today.
Ironically Etisalat Nigeria now offers the most expensive service amongst the four telecommunications, but has already built their brand well enough to have a deserving part of the market. Which of these startup companies are able to do this? NON! So I believe they should go back and re-strategize instead of depending on the government introduce a price floor limiting the major operators.
I am still not in support in introducing a price floor. If NCC fills there is still a need for it, the best they can do is stop these big companies from taking their prices below what they offer right now. I wonder if NCC is supposed protect these small companies or we the consumers? Because their actions of protecting these companies is at our own expense.
I look at all NCC reasons as excuse including the one they stated that consumers asked for the price floor to be introduced, when clearly there is a petition which five thousand people have signed against it. It makes me feel there are hidden stories, agenda and personal gains to all of this. Price flooring is suppose to be in the advatage of the consumer, Plus the idea of price floor has not had a good reputation in countries that it was implemented. “A price floor hurts society more than it helps.
It may help farmers or the few workers that get to work for minimum wage, but it only helps those people by hurting everyone else” according to Fundamental Finance . In this case it helps a few CEO’s and hurts the general public. This cannot be acceptable.
That is all I have to say to NCC.
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