A report from an investigation by the Namibia Competition Commission has lifted a lid on potential abuse of dominance by NamPower, MTC and Telecom Namibia.
The entities were found to have engaged in prohibitive conduct in contravention of the country’s competition laws.
However, the Namibia Competition Commission (NaCC) stipulated it has not yet reached a final decision in the matter.
As such, it has invoked a legal process, providing the affected parties an opportunity to make written submissions or oral representations to the commission.
The affected parties are dominant in the domestic telecommunications sector in that they control more than 80% of it.
NamPower is said to have a dominant position in national data transmission.
In a statement issued yesterday, the NaCC granted the concerned parties 30 days within which to make any written submissions, or indicate if they need an opportunity to make oral representations in terms of Sections 36 and 37 of the Competition Act, respectively.
Upon consideration of any written and oral representations by the concerned parties, the commission may institute proceedings in the High Court against the parties in terms of Namibia’s competition law.
The NaCC’s investigation determined that MTC, NamPower and Telecom entered into an alleged exclusive tripartite agreement at the beginning of June 2012.
That agreement stipulated the lease and use of NamPower’s dark optic fibre by Telecom and MTC as the “joint operators”.
Responding to a New Era query, Telecom Namibia CEO Stanley Shanapinda stated that “as the matter is still ongoing and is at various legal stages, we are not able to comment at this stage”.
Meanwhile, the commission found that the three entities entered into the agreement and abused their dominance in contravention of Namibia’s competition laws.
The investigation into alleged illegal practices commenced when the NaCC received information in April 2022, alleging an exclusive tripartite agreement entered by the three respondents.
On 10 February 2023, the commission initiated the investigation against the respondents.
The NaCC stated: “The agreement allegedly provides that Telecom and MTC shall have exclusive use of their proportional share of the dark optic fibre for a duration of 10 years from the date of commencement of the agreement, subject to automatic renewal for a period of one year, if the joint operators do not give three months’ prior written notice that they do not wish to continue beyond the initial lease period of 10 years”.
The commission further alleges that NamPower has since 2019 offered some of the competitors of the joint operators access to its dark optic fibre. However, such access is granted on different terms and conditions, in comparison to those that are offered to the joint operators.
The commission also alleges that the terms and conditions of the tripartite agreement are more favourable in comparison to those offered to the other market competitors.
Thus, the joint operators enjoy an unfair competitive advantage.
The NaCC further determined that the affected parties failed to adhere to regulations issued by the Communications Regulatory Authority of Namibia (CRAN).
This regulator instructed the sharing of infrastructure to ensure fair competition in the telecommunications’ sector.
Despite the CRAN directive, the parties continued with the tripartite agreement in its original form.
This was even after CRAN already pronounced itself in 2017 that the tripartite agreement contravenes Namibia’s Communications Act.
The NaCC investigation established that NamPower is in a vertical relationship with MTC and Telecom, respectively, as the supplier or grantor of access to its dark fibre, customers as well as MTC and Telecom as contemplated by Namibia’s competition law.
“The vertical agreement so entered by the parties limits and controls market access in the relevant market by virtue of the fact that NamPower only offers access to its optic fibre on a dark fibre basis to Telecom and MTC exclusively. Other carriers are offered access via the Grid Online service offering,” the NaCC stated.
-ebrandt@nepc.com.na