Information & Communication Technology Arena

CONSUMERS of telecommunications services in the country may enjoy lower call rates from 2011 going by the tariff war that started among operators in 2010.

The crash in call rates started barely two weeks after Bharti Airtel acquired former Zain and started re-branding the company.

Bharti Airtel, which took over mobile telephone operations in 15 African countries in a deal that has made it the world's fifth-biggest mobile company with 180 million customers in 18 countries, has never hidden its plan to reduce tariffs in Nigeria
Its chairman, Mr Sunil Bharti Mittal, flaunted his company's low-tariff strategy while unveiling the brand identity in Nigeria, stressing that it would give other network operators a good fight to have a good share of Nigeria's telecoms market.

Just days after Mittal threw the gauntlet; Airtel crashed its call rates to as low as N9 per minute from the industry average rates of N35 to N42 per minute.

This price reduction strategy jolted the industry and elicited swift responses from other network operators.

Other operators have now initiated a number of value added propositions and tariff packages to sustain revenue and retain subscribers.

Etisalat had earlier slashed its call rates by 50 per cent from a peak of 50k per second to 25k in its Easylife offer which has a daily access charge of N20.

Mr Steve Evans, Chief Operating Officer of Etisalat Nigeria, said the company was unperturbed by Airtel's low- tariff strategy.

Evans said his network was one of the best in Nigeria and its tariffs were competitive.

MTN Nigeria has also introduced new tariff packages: MTN Funlink, Smartlink, Prolink, Bizlink and Happilink that allow customers to enjoy more air time at highly reduced costs to customers across its market segments.

Mrs Funmi Omogbenigun, General Manager (Corporate Communications) in MTN Nigeria, said the telecommunications industry in Nigeria was one of the most competitive in the world.

She said the drive to provide value to the customer was an important consideration for players in the industry.

According to Omogbenigun, reducing tariffs by any operator is not something that is new in the telecoms market.

Globacom had similarly inaugurated a package in Port Harcourt that enables telecoms subscribers to pay 25k per second for all calls to any network in the country without any rental or access fee.

Mr Lanre Ajayi, President of Nigerian Internet Group (NIG), said he saw no link between tariff reduction and halting investment, adding that Airtel's action would stimulate expansion of networks rather than diminish investments in the sector.

"On the other hand, it will call for further investment because when you reduce tariffs, you are asking more people to make more calls and when that happens, traffic increases.

"When traffic increases, it requires expanded network. It's just logical that when an operator is planning to attract more traffic to its network, it's planning to expand its network," Ajayi said.

According to him, price war is part of competition and "when you are going to war, you use all tools at your disposals and price war just happens to be one of the weapons in competition".

Ajayi said that the ensuing price war in the sector was not unexpected.

"It is not unexpected. Let's face it, with the population of Nigeria, the size of our market; we should have price advantage over smaller countries based on economy of scale.

"I think we should be paying less than what countries like Benin Republic and Ghana are paying because this is a large market. It should not be too surprising. The tariffs we are seeing now, I am not sure we have seen the last. I believe it will soon go down further."