An Analysis Of The Competition Regime In The Nigerian Telecommunications Industry

Competition is an essential element in the efficient working of markets. Its importance in an emerging economy such as Nigeria is central to the operation of the markets, fosters innovation, productivity and growth. In particular, competition brings important benefits to consumers by encouraging wider choice, thus enabling consumers purchase goods and services at prices which truly reflect the interplay of demand and supply. Accordingly, a government’s competition policy should seek, amongst other objectives, to encourage and improve the competitive process and ensure consumers derive the resultant benefits.

Legal and Regulatory Regime for Competition in Nigeria

Historically, one of the earliest recorded attempts at general regulation of competition can be traced to the common law doctrine of restraint of trade, which remains relevant in Nigerian legal jurisprudence. In general terms, this doctrine renders provisions which impose restrictions on a person's freedom to engage in trade or employment illegal, and therefore unenforceable at common law, unless they are demonstrated to be reasonable, both in the interests of the parties and in the interest of the public. This doctrine thus provided the foundation for an attempt by courts to reconcile the well-established principle of freedom to contract with freedom to trade, with the resultant effect of encouraging competition.

Whilst most other common law jurisdictions, where the doctrine of restraint of trade applies, have proceeded to enact specific laws dealing with competition (e.g. the 1998 Competition Act of the United Kingdom), there is yet to be a specific competition or anti-trust law in force in Nigeria. This is despite the several competition bills that have been forwarded to the National Assembly for consideration, till date. Accordingly, what operates in Nigeria is a sector-based approach to competition whereby the laws regulating certain industries or subject matter contain provisions regulating competition as far as it relates to the subject matter of such laws. Specifically, the Investments and Securities Act 2007, the Nigerian Communications Act 2003 (“NCA”), the Electric Power Sector Reform Act 2005, among other laws, contain provisions dealing with competition as it relates to matters within the purview of such laws.

Competition Regulation in the Nigerian Telecommunications Industry

Competition in the Nigerian telecommunications industry is governed essentially by the NCA and the Competition Practices Regulations (“Competition Regulations”) issued by the Nigerian Communications Commission (“NCC”) in 2007.

By section 4(d) of the NCA, the NCC has responsibility for promoting fair competition in the communications industry and protecting communications services and facilities providers from misuse of market power or anti-competitive and unfair practices by other service or facilities providers or equipment suppliers. Similarly, by section 90 of the NCA, the NCC has the exclusive competence to determine, pronounce upon, administer, monitor and enforce compliance of all persons with competition laws and regulations, whether of a general or specific nature, as it relates to the industry. Specifically with respect to ensuring that competition continues to exist in the industry, section 91(1) of the NCA prohibits a licensee from engaging in any conduct which has the purpose or effect of substantially