Cell Carriers Must Pay up for Bad Service, Nigeria Rules

A federal high court in Lagos ruled last week that mobile operators MTN Nigeria and Celtel Nigeria must compensate subscribers for poor quality of service.

The court ruled that the GSM (Global System for Mobile Communications) carriers must credit 175 Nairas (US$1.50) to each of their subscribers, in accordance with a directive from the Nigerian telecommunications regulator, the Nigerian Communications Commission (NCC).

The NCC said in September that it would issue directives to three GSM operators -- Glo Mobile, MTN and Celtel -- to reimburse subscribers for service that was below average quality.

In a letter sent to the operators in September, the NCC said it had been inundated with complaints from subscribers about poor and unacceptable levels of service.

MTN and Celtel filed a lawsuit to halt the directive.

Lagos Federal Court Judge D.D. Abutu stopped NCC from implementing the directive, initially slated to go into effect Oct. 6, pending the determination of the suit.

The NCC, led by Ernest Ndukwe, had said the two operators failed to achieve required Traffic Channel Congestion (TCH) levels, as measured by the commission's Key Performance Indicator (KPI). It also directed the operators to pay all of their active subscribers through airtime credit, and that no time limitation shall be placed by the operator on the utilization of the airtime credit.

"All the active subscribers are to be credited between March 1, 2008, and April 15, 2008," NCC spokesman Dave Imoko said.

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has argued that the compensation would amount to a huge sum for the operators, and because it's coming as free credit, GSM networks may witness congestion. Since the operators serve millions of subscribers, the amount of compensation could total billions of Nairas (tens of millions of dollars).

ALTON Chairman Gbenga Adebayo has indicated that the telecom group may back the affected operators if they seek an appeal.

Plaintiffs may appeal Federal High Court decisions to an appeals court within 30 days of a ruling.