Why we withdrew Globacom’s license — Benin Republic

Globacom
Globacom office used to illustrate the story.

The government of Benin Republic on Wednesday said its rejection of Globacom-Benin’s bid to renew its operational license had nothing to do with sanctions against the company either for violation of its regulations or dispute over new conditions imposed for the license.

ARCEP-Benin, the Benin telecommunications industry regulatory authority for electronic communications and post, said in a response to PREMIUM TIMES’ enquiries on Wednesday that the decision was informed by a disagreement over the new price for the license.

“The non-renewal of the license does not result from a sanction, but from the lack of agreement between GLO MOBILE BENIN and the State of Benin on the price of the license,” ARCEP-BENIN said in its response by its Communication & Protocol Cell.

“The end of the GLO MOBILE BENIN GSM standard mobile phone network license does not fit into a sanction procedure, even less of any dispute over the new terms of the license, or between GLO MOBILE BENIN and ARCEP-BENIN, on the one hand, and between GLO MOBILE BENIN and the Government of Benin, on the other,” it added.

ARCEP-BENIN said the operating agreement between the Government of Benin and Glo Mobile Benin SA signed on August 20, 2007 expired on August 19.

In the contractual terms of that license, which has a 10 year validity period, ARCEP-BENIN said all parties, including Glo, had agreed that, on expiration, the renewal of the license could be subject to new conditions.

Consequently, ARCEP-BENIN said Glo Mobile Benin’s request for the renewal of the expired license was reviewed and given favourable recommendation for consideration by the government.

The agency said negotiations between the government of Benin Republic and Glo Mobile Benin were based on new conditions imposed as a result of current economic conditions of the electronic communications and post market as well as the country’s targeted sectoral strategy.

At the end of the negotiations, which was based on the price of the license, ARCEP-BENIN said both parties did not reach an agreement on new conditions for the renewal of the license.

Details of the new conditions were not disclosed by ARCEP-BENIN in its statement on Wednesday.

But, PREMIUM TIMES’ sources in Benin said the conditions by government were aimed at improving service quality to mobile telephone subscribers in the country.

The source said the Beninese telecoms industry authority had often criticized Glo-Benin over poor quality of services on its network, resulting in several operations review procedures opened against the company to demand more injection of investment capital.

Regardless, although ARCEP-BENIN said it was not a contracting party, it believed there was a glimmer of hope the license could still be renewed, if Glo Benin management agreed to the new conditions.

“Only the Government will be able to say if there will be a favourable change of renewal, in case GLO MOBILE BENIN accepts the new conditions proposed,” the statement said.

Globacom-Benin, a subsidiary of Globacom Nigeria Unlimited, with more than one million active subscribers on its network, is reputed to be the fourth largest operator in the country.

The network controls over 11.7 per cent market share of the Benin telecom industry since 2007, after MTN Group subsidiary (Spacetel Benin) with four million subscribers or 45.6 per cent.

ARCEP-Benin statistics showed the other operators to include Moov, former Etisalat Benin, Maroc Telecom Group), with 3.7 million subscribers, or 41.9 per cent market share.

In July 2017, in a bid to break the MTN and Etisalat dominance of the Beninese telecoms market, by competing favourably with Spacetel Benin and Moov, Globacom-Benin was said to have opened talks with ARCEP to increase its control of the market share to 25 per cent.

The Benin government’s response was said to be the new conditions of license introduced, which Globacom found objectionable.

Telecoms operators see royalties paid to acquire operational licenses in Benin as the most expensive in West Africa.

The parent company, Globacom Nigeria Unlimited did not respond to several mails seeking to know they were prepared to shift grounds to accommodate the new conditions for the renewal of the license of its Benin subsidiary.

Apart from several calls and text messages to its Senior Manager, Communications, Andrew Okeleke, official emails seeking the company’s reaction also were not responded to.


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