Top 3 Reasons Interconnection Dispute Between Glo And MTN Turned Vicious

As Nigeria’s two biggest mobile network operators (MNOs), MTN and Globacom intensify talks to permanently resolve their interconnection disputes, more information has emerged to suggest that the issue may be deeper than earlier believed.

For about a week, subscribers of Globacom went through difficulties while trying to initiate calls to MTN subscribers following partial disconnection of Globacom by MTN as a result of interconnection disputes.

Obtaining formal responses from the two sides have been difficult but unofficial sources at MTN alleged that Globacom owes MTN up to N10 billion naira in unpaid interconnection fees. This was reported by a national publication, Businessday.

A report in Punch however quoted the Nigerian Communications Commission as saying the amount in dispute between Globacom and Mtn was about N4 billion out of which Globacom was said to have paid N500 million while discussions were still ongoing to agree on the final figures.

Globacom’s Communications Department refused to comment on the issue when contacted, saying there were ongoing discussions between the two companies towards a resolution.

A source in the communications industry on Wednesday alleged that MTN might have pushed the N10 billion narrative as a desperate attempt to garner public sympathy, since NCC had stated that the figure in dispute was about four billion naira while Globacom was believed to have argued that the amount was less than N4 billion.

The source said the sum of N500 million Globacom paid to Mtn ahead of the conclusion of the reconcilliation process was in good faith and wondered why MTN went ahead to implement a partial disconnection.

Telecom analysts hint at a long-standing undercurrent of rivalry dating back many years that have just been brought to the fore by the interconnection impasse.

Since its entry into the market, Globacom, has remained the disruptor in the country’s telecom market, running its own race independent of earlier operators’ unspoken agreement, especially where the operator believed running with other operators would mean giving subscribers less value for money.

For instance, when MTN and the other major operator at the time, Econet, insisted that the market was not mature for the introduction of Per Second Billing of calls, Globacom refused to play along and introduced per second billing to the delight of telecom users and chagrin of fellow operators.
Since then, Globacom has consistently played disruptive roles aimed at delivering more value to the consumers at the expense of the operators.

“There is also the angle of what I would call ‘competitive strategy’. You can’t rule that out. Globacom is recording steady growth as evidenced in the monthly report of the Nigerian Communications Commission in the last one year. MTN’s move might have been to strategically slow down the rate of growth of the aggressive competitor,” said the analyst.

He noted that this is not far-fetched when one considers how other South African brands have successfully weakened competition in other sectors and emerged the dominant figures. “In the pay TV sector today, DSTV is a near monopoly,” the analyst said.

Another analyst also cited the recent troubles MTN has had, especially in the area of xenophobic attacks, pointing out that these might also have accounted for its decision to come down hard on Globacom out of frustration as a distraction strategy.

Feelers from the two companies last night suggested that they are coming near a permanent settlement. Whatever the issues, it is hoped that the two will permanently resolve their issues for the benefit of their customers.

Enraged Nigerian subscribers have already sounded notes of warning to MTN, warning the company not to kill a Nigerian telco.