NCC orders cellco to refund customers

24 Sep 2007

The Nigerian Communications Commission (NCC) has told cellcos MTN Nigeria, Glo Mobile and Celtel Nigeria of its intent to make them refund NGN50 (USD0.41) to every subscriber as compensation for the massive network difficulties encountered in the last few months. The NCC has given the operators until 27 September to make any representations, after which it is likely that the refund will be immediately enforced. The regulator has said that refunds must be made in airtime with no time limit.

According to TeleGeography’s GlobalComms database, there were well over 32 million mobile subscribers by the end of 2006, with MTN, Glo and Celtel taking a 99% share. Network congestion is a commonly-reported problem, leading to dropped calls and difficulty in completing connections. The NCC has been making warning noises at the cellcos for some time now regarding their performance, apparently to no avail, and has defined certain ‘key performance indicators’ (KPIs) which must now be met by cellcos. One such KPI is Traffic Channel Congestion, measured monthly by the NCC; if it exceeds 2% but less than 5% the operator must pay NGN50 compensation to all subscribers on its network that month. Congestion exceeding 5% but less than 10% will trigger a payment of NGN100 compensation, while a measurement in excess of 10% will result in NGN175 compensation for each and every subscriber on the network.

Meanwhile M-Tel, the ailing cellular arm of incumbent NITEL, and the only cellco currently spared the NCC’s ire, has announced plans to raise its subscriber base to about 3.3 million by mid-2008. From a peak of 1.2 million customers at the end of 2005, at its nadir M-Tel’s subscriber base fell as low as 100,000 in the first quarter of this year. However, new management has apparently made a difference; at least 40,000 new subscribers have been signed up in Kaduna with a further 16,000 in Abuja, while network quality reportedly is much better than that of the big three cellcos. CEO Ladi Williams said, ‘We are soon going to take our fair share of the Nigerian market…we will be hitting 750,000 lines by December 2007 and 3.3 million lines by mid next year.’