Nigeria Content Online

Telecommunication services consumers 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, Sunil Bharti Mittal, flaunted his company’s
low-tariff strategy while unveiling the brand identity in Nigeria. He said that
it will give other network operators a good fight to have a good share of
Nigeria’s telecoms market.

Just days after Mr Mittal’s statement, 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
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.

Steve Evans, chief operating officer of Etisalat Nigeria, said
that the company was unperturbed by Airtel’s low- tariff strategy.

Mr Evans said that 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.

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

Price war is part of the
competition

Lanre Ajayi, President Nigerian Internet Group (NIG), said he
sees 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,” Mr Ajayi said.

He said price war is part of competition and “when you are going
to war, you use all tools at your disposal and price war just happens to be one
of the weapons in competition.”

“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.

“I believe other operators will reduce their prices if they want
to remain in business, otherwise, who will want to pay higher tariffs when
there is an alternative of a lower one.

“Others will be forced to drop their tariffs and that’s what
competition does,” the NIG boss said.