MTN targets data market, Multilinks backbone network

Ben Uzor Jr

Fresh information has emerged that Nigeria’s dominant telecommunications operator, MTN is bidding for beleaguered CDMA operator, Multilinks’ backbone transmission network. Analyst told Business Day yesterday that MTN was keen on maintaining market leadership in the data segment of the country’s highly competitive telecoms market. As at March this year, official subscriber statistics from the Nigerian Communications Commission (NCC) showed that MTN had 40.2 million subscribers, while Globacom had 19.9 million; Airtel had 16.1 million and Etisalat had 7.2 million, in the voice segment.

A senior executive at MTN told Business Day that the company ‘was unable to comment at this time’. Industry players are all agreed however, that market focus is shifting from voice to internet and data services, which are of high value for business, education, social and entertainment purposes. Industry watchers also maintain that MTN’s purported bid for Multilink’s fibre transmission backbone is particularly an ardent struggle for the data and internet services market, as well as for the bulk (carriers-carrier) market. Business Day had earlier reported that Helios Towers Nigeria plans to sell the mobile phone business it legitimately inherited as part of an acquisition of Multilinks.

Helios Nigeria which builds, buys and rents towers used by telecoms operators acquired Multilinks assets from Telkom after the South African mobile operator attempted to offload its shareholdings in the loss-making venture to a third party earlier. Informed sources however told Business Day yesterday that Stanbic Bank was managing the process of the sale. According to our source, Multilink’s ‘crown jewel’ is its robust terrestrial fibre optic network connecting 21 of Nigeria’s 36 states, including the Federal Capital Territory, Abuja with an estimated construction cost of over $150 million.

On the other hand, MTN owns the largest transmission network in Nigeria and there are concerns amongst stakeholders that the acquisition of Multilinks backbone, will mean that the company will own substantially more than 50 percent of long distance transmission networks in Nigeria. Industry watchers say the limited availability and exorbitant price of long distance national transmission capacity needed to move available bandwidth capacity emanating from the underwater cables on the country’s coastline is the fundamental drawback to access to efficient and reasonably priced broadband internet services.

It has been discovered that the price of moving internet capacity from Lagos to Abuja is much higher than the cost of moving capacity from Lagos to London, due to the dearth of transmission backbone network. According to analysts, the development of the broadband market in Nigeria and the availability of internet access to as wide a population as possible, at a lower cost was largely dependent on the reduction of transmission costs. There is concern among telecoms officials about a concentration of market power and the negative impact this might have on competition and pricing.