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Corporate May 14, 2012

Poor service: Nigeria fines Airtel, Etisalat, 2 others

Lagos, Nigeria: Regulators in Nigeria have fined four mobile phone carriers a total of $7.3 million over poor service in a nation that depends on cellular phones for communications, a spokesman said.

The Nigeria Communications Commission's penalties hit Bharti Airtel Ltd of India, Abu Dhabi-based Etisalat, local firm Globacom Ltd and South Africa-based MTN Group Ltd, some of the dominant carriers in Africa's most populous nation. Etisalat and MTN must pay $2.25 million apiece, while Airtel faces a penalty of $1.68 million and Globacom faces a $1.125 million fine, said Reuben Muoka, a commission spokesman, on Sunday.

he commission issued a statement Saturday saying that they decided to allow January and February to be a grace period for the companies to improve their services. Reuters

The fines come for poor service, dropped calls and bad line quality in March and April, Muoka said. The commission issued a statement Saturday saying that they decided to allow January and February to be a grace period for the companies to improve their services.

In October, the communications commission warned carriers it would begin fining them for poor service.

"The current penalties signal a new regime of quality of service management in the Nigerian telecommunications industry," the commission said.

The companies have until May 21 to pay the regulators or they will face further penalties.

MTN, long the dominant provider in Nigeria, has 41.1 million subscribers in the nation after 10 years of doing business there. MTN did not immediately respond to requests for comment.

Etisalat said in a statement it is committed to delivering quality service to more than 12 million subscribers in Nigeria, and expects to spend more than half a billion dollars on upgrading its network this year.

The CEO of Etisalat's Nigeria division, Steven Evans, blamed "the failure to hit some of the quality measures" in part on industrywide difficulties including a lack of reliable power, accidental damage to transmission lines and occasional sabotage.

"These factors are unique to the operating environment in Nigeria and pose a tough challenge for operators to deliver quality of service levels equal to that of other countries," Evans said. "What we would like to see is the declaration of the telecommunications industry as critical national infrastructure which would afford the industry and its facilities greater protection."

Emeka Oparah, a spokesman for Airtel in Nigeria, declined to comment. Officials with Globacom could not be reached Sunday.

Nigeria, long troubled by pothole-littered roads and little electricity, has relied on mobile phones since the government granted the public access to them about a decade ago. Landlines are almost nonexistent, as the state-run telephone company has collapsed and repeated efforts to sell it to a private company have failed. However, carrier service is often so poor that those who can afford it carry multiple phones with different providers to be able to make calls.

The ultimatum by the commission comes as Nigeria, home to 160 million people, continues its explosive growth, making it a lucrative market for mobile phone service providers. The arrival of Airtel sparked a price war in the market, with local phone calls now down to pennies a minute.

AP


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