Namibia: MTC Drops Case On Cell Call Costs

Telecoms

The dominant player in Namibia's cellphone communication industry, MTC, last week abandoned an attempt to get an urgent court interdict to stall a Namibian Communications Commission decision that would force it to lower the price of some of its services.

For the second time in five days, MTC conceded that an urgent application that it had lodged against the Namibian Communications Commission (NCC), Telecom Namibia and Powercom, which owns MTC's main competitor, Leo, should be removed from the court roll in the High Court in Windhoek.

In the urgent application, which was first removed from the court roll on Friday last week, MTC was asking the court to issue an urgent interdict that would have prevented the NCC from implementing a decision that should result in cellphone users paying less for calls made to cellphones on other cellphone networks and to land line phones.

The NCC's board decided on February 9 that Namibia's cellphone network operators have to stop charging higher prices for calls that their subscribers make to other operators' networks and to fixed line telephones than the tariffs they charge for calls made on their own networks only.

With the urgent component of its case against the NCC, Telecom Namibia and Powercom now abandoned, MTC is however continuing with the review application that it has filed with the High Court, the company's legal counsel, Sakeus Akweenda, told Acting Judge Harald Geier last week.

In the review application MTC is asking the court to set aside and declare as unconstitutional and null and void the NCC board's decision to implement a price cap on the tariffs that cellphone operators charge for calls made from their networks to other cellphone operators' networks and to fixed-line phones.

The NCC directed that these price changes had to be implemented by March 1. MTC spokesperson Tim Ekandjo said on enquiry yesterday that MTC will abide by the NCC's decision in the meantime. "The fact that we had differences of opinion with the NCC on their direction does not mean that we will not respect their decision, after all they are the regulatory authority of the telecommunications industry," he remarked.

MTC is claiming that the NCC did not give it a proper hearing before the decision on implementing a price cap was taken. In an affidavit filed with the court MTC Managing Director Miguel Geraldes accuses the NCC of acting "unfairly and unreasonably" towards MTC. He also claims the NCC took its decision arbitrarily and without first having conducted an independent and comprehensive study on cell phone services tariffs and fees.

MTC is further claiming that a study that has been done showed that its rates were price competitive in Namibia and when compared with prices in the Southern African Development Community as a whole.

According to the NCC, though, MTC has known for the last nine months that the NCC was considering the issues that resulted in the price cap decision. The company has since May last year also been given ample opportunities to make presentations to the NCC on these issues, the regulatory authority has responded.

MTC is also charging that the measures taken by the NCC are "anti-competitive, and have the effect of price fixing". In its response filed with the High Court, Telecom Namibia is throwing MTC's allegation of anti-competitive behaviour back at the company.

Accusing MTC of itself being responsible for anti-competitive conduct, Telecom Namibia's General Manager: Strategy, Theo Klein, is arguing that MTC cannot ask the court to grant it an interdict to protect the revenue it earns as a result of anti-competitive conduct.

MTC is claiming that the price cap would affect its earnings negatively, and could ultimately result in the company closing down. Whether this gloomy scenario would ever come to pass is being disputed by Telecom Namibia and leo, though.

They note that according to MTC's latest annual report, the company had a turnover of N$1,389 billion in the year to the end of September 2009. MTC ended that financial year with a very healthy after-tax profit of N$387 million.