MTN violated regulations with their ‘Data Zone Bundle’ product – NCA

The National Communications Authority (NCA) has revealed that MTN Ghana, a subsidiary of Scancom PLC, flouted industry regulations by introducing the Data Zone Bundle product for internet service.

Director-General of the NCA, Mr Joe Anokye, pointed out that the telecommunication company failed to adhere to guidelines, so the product had to be withdrawn to ensure strict compliance.

He explained that Significant Market Power (SMP) directives were imposed on MTN Ghana in June 2020, but the Mobile Network Operator (MNO) failed to comply.

In January 2023, the NCA took note of the MTN Data Zone Bundle product, a 24-hour data bundle which offered discounts of up to 35% for various data allocations.

The NCA said some market players also raised concerns about the “predatory nature of the package”.

Mr Anokye revealed on Wednesday, April 26, 2023, at a press briefing that: “It was found that for a number of price points, the MTN Data Zone Bundle was the lowest in the market in violation of the SMP directives”.

“Also, the required prior approval was not obtained before the product was rolled out”.

He continued: “Further, the licence obligation for all MNOs to publish their tariffs, including the terms and conditions, was not adhered to in respect of this product.

“MTN was therefore directed to discontinue the product until such time that all the violations have been remedied”.

Mr Anokye pointed out that the regulatory authority had to act to protect consumers and also ensure fairness in the industry.

“We want to assure consumers and the general public that the regulatory interventions resulting from the classification of MTN as SMP are intended to sustain choice for consumers and protect consumer interest regarding the provision of innovative services and competitive pricing. The protection of competition in the marketplace will protect the interest of consumers in the long term”.

NCA revealed that after a series of engagements, MTN Ghana discontinued the product on April 5, 2023.

Mr Anokye further disclosed that the telco has since submitted a revised Data Zone Bundle, which the NCA has approved for implementation.

“It is our expectation that the product will soon be available to customers,” he stated.

Significant Market Power (SMP)

Significant Market Power (SMP) is a concept in market competition relating to the dominance of an operator in a particular market.

In Ghana, the National Telecommunications Policy, 2005 (NTP’05) established that SMP will be deemed to exist for an organization providing telecommunications services that control at least 40% of a relevant market segment.

Additionally, section 20(10) of the Electronic Communications Act, 2008, Act 775, mandates that the authority may classify a network operator as dominant if that operator enjoys a position of economic strength that enables it to behave to an appreciable extent independently of competitors and users.

When a network operator is classified as SMP, regulatory intervention is needed to prevent the dominant operator from abusing its position in the market and to offer an opportunity to correct the imbalances in competition in the marketplace.

Consequently, the NCA commenced discussions in July 2014 on the regulation of market competition.

This led to the appointment of Analysys Mason in November 2015 as a consultant to undertake a study to determine whether any particular operator in Ghana had significant market power (SMP) in one or several of the relevant voice markets, including retail and upstream wholesale markets.

At the end of the study in 2016, MTN was identified as an SMP in the Retail Mobile Voice Market with a market share of 46%.
In October 2019, the NCA commenced a review of competition in the market, using monthly and quarterly data statistics from the industry.

The review established that MTN fits the definition of a Significant Market Power (SMP) in the retail mobile voice, data and SMS markets.

Hence, MTN was formally declared SMP in October 2020, and the NCA placed seven remedial measures.