Controversy brews over landing rights, undersea cable licences in Nigeria, South Africa

By Adeyemi Adepetun   |   22 December 2009   |   10:00 pm  

To buttress this claim, two incidents came up recently in the telecoms sector of the two economies, which sort of stirred up trouble water and renewed hostilities between the two countries.

 

The main thrust of the issue is the alleged refusal by the South African authorities to grant MainOne Cable Company of Nigeria rights to land its submarine cable in the country, while South Africa’s sponsored West African Cable System (WACS) was granted rights to land its cable in Nigeria.

It would also be recalled that Nigeria has opened her doors to investments from South Africa, a typical example was the buy over of Multi-Links, a CDMA operator in Nigeria by South Africa’s Telkom in 2008. Also, MTN Nigeria, owned by MTN Group of South Africa has in the last eight years enjoyed stable profit from the Nigerian market, dictating market pace in the market. There are also other investments with South Africa’s interest cutting across the length and breadth of Nigeria.

This recent development raised more questions in the investment relationship between Nigeria and South Africa and the much-campaigned intra Africa trade policy advocated by the African Union.

This alleged hostility from South Africa has led to Nigerian investors calling on the government to put in place a reciprocal business policy as a means of protecting Nigerians in the continent.

MainOne Cable company is a wholly owned Nigerian company aiming to be a major telecommunications player on the continent through the implementation of a submarine cable project linking Europe with West Coast of Africa in its first phase and later South Africa in the second phase.

With the cable, MainOne is expected to considerably minimise the difficulties of switching traffic between African countries and eliminate the inconveniences and added cost of first routing traffic to Europe.

According to a source from the company who preferred anonymity, said since the commencement of the project, MainOne has achieved all set milestones on schedule, including the shore end laying of state-of-the -art fibre optic cable in Accra, Ghana and Lagos, Nigeria with every indication pointing to commercial launch of service in June 2010, paving the way for the second phase of the project which is to take the cable down to South Africa.

However, a major headache the company seems to be contending with now is the repeated rejection of its application for a landing licence in South Africa by the authorities there.

The MainOne Cable company source revealed that the country (South Africa) is citing a policy that requires that company yield at least 51 per cent of its shares to South Africans who might be interested, before it can be issued a permit to land its cable on South African shores.

According to MainOne Cable, several entreaties have been made to the South African authorities to have a change of heart but all to no avail, stressing that it had equally written a number of authorities in Nigeria seeking their intervention to prevent the second phase of the project from suffering a stillbirth.

Furthermore, the source stated that the company believes the South African authorities could have a change of heart on the issue, especially if Nigerian authorities intervened.

It would also be recalled that Nigeria’s Vice President, Goodluck Jonathan, publicly complained in Abuja that South Africa was creating barriers for Nigerians who want to do business in their country.

Jonathan, while declaring open the 10th Nigeria-South Africa Bi-National Commission (BNC) in Abuja said: “Bilateral relations have yielded enormous benefits for South African entrepreneurs with investments in Nigeria, while there are little or no opportunities for Nigerians to do real business in South Africa.”

The MainOne Cable source hinted that already the company had sought the assistance of the Minister of Information and Communications, Dora Akunyili, while a letter has also been written to the Federal Ministry of Foreign Affairs intimating it with the full details of the company’s predicament.

However, reacting to the issue, the Nigerian Communications Commission (NCC) in a statement signed by the Head, Media & Public Relations, Reuben Muoka, made available to journalists titled: “RE: Purported Refusal of South African Government to Grant Submarine Cable Landing Rights To Nigerian Companies” stated that:

“The attention of the Commission has been drawn to the claim from some quarters that Nigerian companies are being denied cable landing rights by South African government, while a local company with South African interest was recently given a similar licence by the Commission.

“The Commission hereby confirms that a landing right was offered to MTN Nigeria Communications Limited, a company duly registered by the Corporate Affairs Commission of Nigeria and operating as a local Nigerian company, after it had fulfilled all the rigorous processing requirements of the Commission which lasted for over a period of not less than six months and approved by the Board of the Commission.

“The Nigerian Communications Commission acted within existing laws of the Federal Government of Nigeria including Nigerian Communications Act 2003 which requires the Commission to protect competition and not specific competitors.

“The Commission has however taken liberty to investigate the veracity of the claims and can confirm as follows:

“Globacom never applied to the South African Government for any cable landing right licence and hence the newspaper report that the company was denied the licence is not true.

“The Chief Executive Officer of MainOne Cable Company informed the Commission that the firm applied for cable landing right licence in response to a Request For Proposal (RFP) published by the South African Government. MainOne Cable applied as a foreign company registered under the laws of Mauritius. The company also did not apply as a joint venture with any South African company or as a South African registered company.

“Therefore evidence does not seem to exist of any company that actually registered a local company in South African, applied for licence and was subsequently denied a cable landing licence,” the NCC said.



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