The Laws Governing Dominance, Mergers and Acquisitions in the Nigerian Telelcommunications Sector

Introduction

The NCC, in exercise of its regulatory function, is empowered to  “ensure fair competition in all sectors of the  Nigerian communications industry”.[1] Thus, while possession of dominance alone does not damage market competition and is not a violation of anti-trust laws,[2] a service or facilities provider in a ‘dominant position’ in a market abuses its dominance where it engages in anti-competitive business practices or acts that have the effect of causing harm to consumer interests, such as influencing market dynamics by setting prices above competitive levels. Dominance itself indicates possession of a substantial degree of durable market power, typically defined as power to price above competitive levels, power to exclude, and ability to act independently of competitors and consumers.[3] In Canada, for instance, dominance has been defined by the Competition Tribunal and the Federal Court of Appeal in Toronto Real Estate Board (TREB) as “the ability to control both price and non-price dimensions of competition for a significant period of time.”

THE LEGAL REGIME OF DOMINANCE

The specific definition of ‘dominance’ is not contained in either the NCA 2003, the NCC’s Competition and Practices Regulations (CPR) 2007 or in any judicial pronouncement in Nigeria, refuge can be sought in the definition provided by the classic case of United Brands Company and United Brands Continentaal BV v Commission of the European Communities,[4] where the court pronounced that ‘dominant position’ refers to:

“a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers.”

The NCA 2003 sets the tone for the concept of dominance by providing that the NCC is empowered to determine that a service or facilities provider is in a dominant position in any aspect of the telecommunications market.[5] It goes further to provide that the NCC is empowered to publish guidelines and regulations to clarify how to apply the test of ‘dominant position’ to service or facilities providers[6], and such guidelines and regulations are to specify the matters which the NCC is to take into account in arriving at the conclusion that a service or facilities provider is in a dominant position, such as:[7]

(a) the relevant economic market;

(b) global technology and commercial trends affecting market power;

(c) the market share of the service or facilities provider;

(d) the licensee’s power to make independent rate-setting decisions;

(e) the degree of product or service differentiation and sales promotion in

the market; and

(f) any other matters which the NCC is satisfied are relevant.[8]

Indices for Determining Dominant Position

According to the CPR 2007, since an abuse of market dominance is an anti-competitive practice, even though dominance itself is legal, the NCC does have to wait for an abuse to occur before it can make a determination on dominance. Hence, it provides the germ for the meaning of ‘dominant position’ as follows:

“Subject to any other determination of the NCC under this Part, or to any demonstration by a (service or facilities provider) in the specific circumstances that the presumption should not apply, the NCC will presume that any (service or facilities provider) whose gross revenues in a specific communications market exceed forty per cent (40%) of the total gross revenues of all (service or facilities providers) in that market, is in a dominant position in that market.”[9]

 The tenor of the above provision is to give the NCC the power of presumption of dominance on the part of a service or facilities provider whose gross revenues exceed forty percent in a specific telecommunications market. However, such presumption of dominant position is rebuttable and contingent upon any other determination made by the NCC or where a service or facilities provider demonstrates to the NCC that the presumption should not be applicable.[10]

The CPR 2007 also establishes further guidance in terms of the standards and processes to be used by the NCC in concluding that a service or facilities provider has acquired a dominant position in one or more telecommunications markets.[11] In its determination of dominance, the NCC is required to identify service or facilities providers that have “a position of economic strength in one or more specifically defined telecommunications markets, such that they have the ability to unilaterally restrict output, raise prices, reduce quality or otherwise, act independently of competitors or consumers.”[12] Thus, when making a determination on dominance, the NCC is required to consider a range of market circumstances or criteria as well as any one or more of the following indices:[13]

(a) the market share of the service or facilities provider, determined by reference to its revenues, numbers of subscribers or volumes of sales;

(b) the overall size of the service or facilities provider in comparison to competing service or facilities providers,particularly any resulting economies of scale or scope that permit the larger service or facilities provider to produce products or services at lower costs ;

(c) the control of network facilities or other infrastructure which competing service or facilities providers require access to and which cannot, for commercial or technical reasons, be duplicated by those competing service or facilities providers;

(d) the absence of buying power or negotiating position by customers or consumers, including substantial barriers to the switching of service or facilities providers ;

(e) the ease of market entry, and the extent to which actual or potential market entry protects against the exercise of market power, such as the raising of prices;

(f) the rate of technological or other change in the market, and related effects for market entry or the continuation of a dominant position.[14]

In order to evaluate the dominant position of a service or facilities provider, the NCC is required, as a first vital step, to define the relevant telecommunications markets.[15] In evaluating and defining the relevant telecommunications markets, the NCC must consider the following criteria:[16]

(a) analysis by the NCC of the products or services that make up a specific market as well as the geographic scope of that market;

(b) assessment by the NCC of demand-side substitutability[17] in order to measure the extent to which consumers are prepared or able to substitute other products or services for the products or services supplied by the Licensee in question; and

(c) assessment by the NCC of supply-side substitutability to determine the extent to which suppliers other than the Licensee in question are able to supply products or services that provide a competitive alternative to consumers.[18]

The CPR 2007 further gives the NCC the power to also determine that two or more service or facilities providers, acting jointly or collectively, have assumed the position of dominance even where such service or facilities providers have no common ownership or where they are not parties to any formal agreement or where they operate in different markets.[19] The NCC is required to follow the procedures contained in the Regulations when making a determination on dominance.[20]

According to the court in the above-referenced case, a dominant position derives from a combination of several factors which, considered selectively and not cohesively, are not necessarily determinative. The court ruled:

“The fact that an undertaking forbids its duly appointed distributors to resell the product in question in certain circumstances is an abuse of the dominant position since it limits markets to the prejudice of consumers and affects trade between member states, in particular by partitioning national markets…An undertaking in a dominant position for the puspose of marketing a product- which cashes in on the reputation of a brand name known to and valued by the consumers- cannot stop supplying a long-standing customer who abides by regular commercial practice, if the orders placed by that customer are in no way out of the ordinary, such conduct is inconsistent with the objectives laid down in Article 3(f) of the Treaty, since the refusal to sell would limit markets to the prejudice of consumers and would amount to discrimination which might in the end eliminate a trading party from the relevant market…If the occupier of a dominant position, established in the common market, aims at eliminating a competitor who is also established in the common market, it is immaterial whether the behaviour relates to trade between member states once it has been shown that such elimination will have repercussions on the patterns of competition in the common market…Charging a price which is excessive because it has no reasonable relations to the economic  value of the product supplied may be an abuse of a dominant position; this excess could, inter alia, be determined objectively if it were possible for it to be calculated by making a comparison between the selling price of the product in question and its cost of production, which would disclose the amount of the profit margin.”[21]

Back in 2013, and following a market survey conducted by KPMG Professional Services, MTN Nigeria and Globacom were declared to be in a dominant position. While MTN was pronounced to be dominant operator in the mobile voice market, wholesale leased lines and transmission capacity, Globacom’s dominance was said to be in the wholesale leased lines and transmission capacity market.[22] Both MTN and Globacom were discovered to jointly  control  about  62 per cent  of  the  public terrestrial transmission infrastructure in the upstream market. The NCC then resolved that the Dominant Operator in the Mobile Voice market would be required to separate account. NCC further maintained that it might require the dominant operator to submit details on specific aspects of its operations from time to time. For the dominant operators in the Wholesale Leased Lines and Transmission capacity, NCC promised to fashion out price cap for wholesale services and price floor for retail services subject to periodic review while accounting separation would also be implemented.[23]

Several years down the line, MTN’s subscriber share of the market has shot up to around 50% or less and its revenue share is estimated to be at least 65 per cent of the telecom market profits, while other MNOs share the remaining 35 per cent.[24] However, MTN was not done yet as it continued to acquire many of its competitors: MTN bought Visafone was in 2013. It acquired and bought Intercellular in 2017 while it also took over Natcom’s spectrum in 2023 which rendered both Intercellular and Natcom comatose. Also, MTN’s acquisition of Visafone made flaks to fly when Etisalat sued MTN over its acquisition of Visafone. Eitsalat was aggrieved over the MTN’s acquisition of Visafone’s 800MHz Spectrum, arguing that the deal would give the dominant operator, MTN, more power to further dominate other MNOs and stifle competition. According to a statement issued by the local arm of Abu Dhabi-listed telecoms firm Etisalat, “the use of the 800 MHz spectrum to deploy broadband services ahead of its competitors … will further entrench MTN’s dominance in the Nigerian telecommunications sector.”[25] The suit was, however, struck out for lack of jurisdiction.[26] Additionally, the entry of Elon Musk’s Starlink into Nigeria’s Internet Service Providers (ISPs) market had witnessed its hue and cries. Stakeholders in the industry expressed grave concern over the possible dominance of Starlink in Nigeria’s Internet Service Providers (ISPs) market. According to them, the introduction of Elon Musk’s satellite internet service would widen competition and disrupt the internet market, which could pose a threat to the local ISPs.[27] It is not to be wondered at, therefore, that NCC had to move against the decision of Starlink to unilaterally review its subscription plans upwards without the seeking and obtaining the approval of the regulatory authority in blatant contravention of Sections 108 and 111 of the NCA 2003 as well as Starlink’s Licence Conditions on tariffs.[28]

In 2020, MTN Ghana took the National Communications Authority (NCA)[29] to court over the latter’s decision to declare it (MTN) as a Dominant/Significant Market Power (SMP), which means that special regulatory restrictions would be enforced to potentially limit the growth of MTN Ghana in terms of its performance, innovativeness and its competitiveness in the Ghanian telecoms market. The NCA further set caps on what MTN can charge for its services and imposed a 30 per cent interconnect rate for two years in favour of other disadvantaged competing operators. The NCA had taken its position pursuant to Section 20(10) of the Electronic Communications Act, 2008 (Act 775) and classified MTN as an SMP after the regulator determined that the mobile network operator controlled more than 57 per cent of the voice market share as well as more than 67 per cent of the data market share.[30] The Accra High Court dismissed the suit brought by MTN seeking to quash the decision of the NCA and also awarded cost of GH¢10,000 against the telecoms giant.[31]

The NCC’s Determination of Dominance in Selected Telecoms Markets

As earlier noted, the NCC is empowered to determine and apply compliance with competition laws in the Nigerian telecommunications market, including identifying dominant service or facilities provider and taking corrective actions to ensure fair competition. Thus, as is its responsibility under the NCA 2003 and the CPR 2007 to determine whether telecommunications service or facilities providers are in a dominant position and whether they are abusing that position by acting in a manner that substantially lessens competition, the NCC embarked on a Determination of Dominance in Selected Telecoms Markets in 2010.[32] The 2010 Determination of Dominance aimed at determining whether certain telecommunications licensees hold a position of market dominance in two important telecommunications markets: the mobile telephony market and the international internet connectivity market. The NCC concluded its findings with the result that all available evidence at its disposal showed a determination that no service or facilities provider currently held a position of market dominance in the mobile telephone market, including the licensees with leading market shares, MTN, Celtel (now Airtel) and Glo mobile (Globacom). The NCC’s determination also proved that no group of two or more service or facilities providers held a position of joint or collective dominance in that market. The NCC further established that there was no conclusive evidence that any of the mobile operators was engaging in conduct which has the purpose or effect of substantially lessening competition.[33]

Regarding the international internet connectivity market which the NCC determined to have been dominated by NITEL, being the only supplier of international submarine telecommunications cable services to Nigeria, the NCC nonetheless determined that NITEL was not in a dominant position in view of the no fewer than four new submarine cables scheduled to commence service in Nigeria between 2010 and 2012, with stupendously larger capacity which and would utilize newer technology than the SAT-3 cable used by NITEL. The NCC also found no conclusive evidence that NITEL engaged in conduct having the effect of substantially lessening competition. On the contrary, the NCC submsitted that the available evidence at its disposal clearly indicated that the international internet connectivity market was becoming highly competitive, with new operators actively pursuing customers with the implication that the market would become increasingly competitive on a prospective basis. As a result, the NCC determined that NITEL was not in a dominant position in the international internet connectivity market.[34]

The provisions of the CPR 2007 were further tested when the NCC conducted its final determination and issued the the Determination of Dominance in Selected Communications Market on April 25, 2013. The NCC defined six market segments for intervention, employing a theoretical model while adopting the Structure-Conduct-Performance (SCP) Model and the HHI Index in its assesment  of the competition in the telecoms market. In accordance with its findings, NCC determined that the mobile voice market in Nigeria was not effectively competitive with MTN Nigeria in control  as a ‘dominant operator’ having 44 per cent market share of subscribers within the market. The NCC determined that MTN Nigeria held dominant positions in two key segments: mobile voice and upstream, including Spectrum, Tower Sites, Network Equipment, Wholesale Broadband/Internet Access and Wholesale Leased Lines and Transmission Capacity.[35] The NCC, after pronouncing MTN Nigeria as a ‘Dominant Operator’  further determined that MTN Nigeria had an enormously wide differential of up to 300% between on‐net and off‐net calls[36] with the effect of a likely establishment of a ‘calling club’, which could prevent its subscribers from calling other MNOs/networks.  

Silhouetted against the backdrop of this determination, the NCC resolved that the differential between MTN Nigeria’s on–net and off-net retail tariffs be immediately collapsed to achieve the same tariff for MTN Nigeria’s on‐net calls and for off-net calls. This also made NCC impose other special obligations on MTN Nigeria such as the urgent need for the giant mobile company to implement accounting separation and submision of all required details of specific aspects of its operations to the NCC. Also, the NCC further determined that both MTN Nigeria and Globacom were jointly in a dominant position in the wholesale leased lines and transmission capacity sub-segment of the telecommunications market and, therefore,  imposed special obligations on both mobile network operators to bring them in compliance within the NCC’s price regime for wholesale services and retail services while both mobile network providers were also mandated to implement accounting separation and submit dteials of specific aspects of their operations. The NCC further resolved that the determination was to become effective as from May 1, 2013 and remain in force and binding on MTN Nigeria until reviewed by the NCC.

Abuse of Dominant Position

As noted earlier, in order to identify whether a service or facilities provider or providers enjoy a dominant position in the telecommunications markets, there is a need to understand the level of competition in each relevant market. The question then bears asking as to when can a service or facilities provider in a dominant position be said to have abused its dominance and what are the business practices that constitute an abuse of dominance?

Abuse of dominance occurs where a dominant service or facilities provider uses its market power to engage in anti-competitive practices such as predatory pricing, exclusive dealing, excessive pricing etc all of which ultimately result in harm to consumers and susbtantially lessening competition. Specifically, an abuse of dominance occurs where the NCC determines that the conduct or business practice of a service or facilities provider has or may have the effect of substantially lessening competition.[37] Upon such determination,  the NCC may direct such service or facilities provider in a dominant position in the telecommunications market to cease such conduct constituting an abuse of dominant position in that market and further implement appropriate remedies.[38]

Under the Regulations,[39] the business practices constituting an abuse of dominance are as follows:

– failure to supply interconnection or other essential facilities to a competing service or facilities provider.

– discriminating in the provision of interconnection or other telecommunications services or facilities to competing service or facilities provider.

– bundling of telecommunications services.

– offering a competing service or facilities provider more favourable terms or conditions that are not justified by cost differences, if it acquires another service that it does not require.

– pre-emptive acquisition of scarce facilities or resources required by another service or facilities provider for the operation of its business, with the effect of denying the use of the facilities or resources to the other service or facilities provider.

– supplying telecommunications services at prices below average incremental costs.

– using revenues or the allocation of costs from one telecommunications service to cross-subsidize another telecommunications service.

– failure to comply with interconnection or facilities access obligations, including the Telecommunications Networks Interconnection Regulations 2007, any other interconnection or access terms specified or approved by the NCC.

– deliberately reducing the margin of profit available to a competing service or facilities provider that requires wholesale communications services from the service or facilities provider in question by increasing the prices for the wholesale telecommunications services required by that competing service or facilities provider or decreasing the prices of telecommunications services in retail markets where they compete, or both;

– inducing a supplier to refrain from selling to a competing service or facilities provider.

– adoption of technical specifications for networks or systems to deliberately prevent interconnection or interopretability with a network or system of a competing service or facilities provider.

– failing to make available to competing service or facilities provider technical specifications, information about essential facilities, or other commercially relevant information which is required by such competing service or facilities provider to provide telecommunications services and which is not available from other sources.

– use of information obtained from competing service or facilities provider  for purposes related to interconnection or the supply of communications facilities or services by the service or facilities provider in question to compete with such competing service or facilities provider.

– any failure by a service or facilities provider to comply with any decision, rule, direction or guideline issued by the NCC, regarding either prohibited or required competitive practices.

Judicial pronouncements in Nigeria on the concept of abuse of dominance are sparse. In 2014, the European Commission slammed Slovak Telecom and its parent company, Deustsch Telekom, €38,8 and €31 million over its abusive business practices in trying to shut out competitors from the Slovak market for broadband services.[40] Prior to this case, the European Commission had imposed fines in four cases concerning abuse of dominant position in the telecommunications industry, relating to pricing practices and other access access issues.[41] Also, in 2007, the European Union’s General Court dismissed the suit brought before it by the Spanish telecoms operator Telefónica and Spain itself against a European Commission decision which had found Telefonica guilty of abusive behaviour in the Spanish broadband market. Telefónica was found culpable in imposing unfair prices on its competitors in the form of a margin squeeze between the wholesale prices it charged its competitors and the retail prices it charged its own customers. According to the facts of the case, Telefónica, on the one hand, was the only Spanish operator with a nation-wide fixed telephone network. On the other hand, ADSL, a provider of high speed internet access using a fixed telephone, was one of the main technologies being deployed in Spain for the provision of broadband internet access services. Thus, being the sole telecommunications operator in Spain with a nationwide fixed telephone network, Telefónica controled the entire ADSL value chain in Spain. Hence, it became economically inexpedient for competitors to duplicate Telefónica’s local access network. The inevitable conclusion, therefore, is that operators competing with Telefonica and desirous of providing retail broadband services would have to be compelled to purchase wholesale broadband access products from Telefónica, namely local loop unbundling, regional wholesale access and national wholesale access. The wholesale prices which were being imposed by Telefonica on its competitors were considered to be insufficient to cover the costs that an efficient operator would have to incur to provide retail broadband access, meaning that competitors were forced to either exit the market altogether or operate at a loss if they wished to match the prices that Telefonica offered its customers at retail level.[42]

In the case of Hoffmann-La Roche & Co. AG v Commission of the European Communities,[43] the Eurpean Court of Justice (ECJ) held that Roche was in a dominant position within the meaning of Article 86 of the Treaty on account of its complete freedom of action which created impediment within the common market. The ECJ based its conclusion of dominance on the part of Roche on the facts that Roche:

– possessed a market share raanging from 95% for vitamins B6 and H to 47% for vitamin A;

– had a far wider range of manufactured vitamins; hence, ability to employ a sales and pricing strategy which was far less dependent than that of other manufacturers;

– had commercial and technological advantages which its competitors lacked;

– was the world’s largest producer of all vitamins with its turnover exceeding that of all other producers.

It need be mentioned that upon determination by the NCC that a service or facilities provider is in a dominant position, even where there is no finding of any abusive business practice or conduct on the part of the service or facilities provider, there are special obligations imposed on such service or facilities provider in order to reduce the possibility of abuse of its dominance.[44]These special obligations are as follows:[45]

(a)  meeting of all reasonable requests for access to its telecommunications network, in particular access at any technically feasible point on its telecommunications network;

(b)  adherence to the principle of non-discrimination with regard to interconnection offered to other licensed telecommunications operators;

(c)  making available upon request to other licensed telecommunications operators considering interconnection with its telecommunications network, all information and specifications reasonably necessary in order to facilitate conclusion of an agreement for interconnection;

(d)  submission to the NCC for approval and publication of a Reference Interconnection Offer; and

(e ) provision of access to the technical standards and specifications of its telecommunications network with which another operator shall be interconnected.

Where the service or facilities provider who is in a dominant position violates any of the obligations imposed on it, the NCC is required to prohibit such conduct causing abuse and declare interconnection agreements wholly or partially invalid to the extent that such dominant service or facilities provider abuses its dominant position in the market.[46]However, the NCC is required to, first of all, request the dominant service or facilities provider to refrain from the abuse to which the objection has been made.[47] A service or facilities provider in a dominant position also has an obligation to set interconnect charges on objective criteria, observing the principles of transparency and cost orientation, except where the NCC has determined the interconnection rates.[48]

Additionally, the Interconnection Regulations provide that a service or facilities provider in a dominant position is required to keep separate accounts so as to identify all elements of cost and revenue on the basis of their calculation and the detailed attribution methods used.[49] Such a dominant service or facilities provider is also required to maintain separate accounts[50] in respect of interconnection services and its core telecommunications services, and the accounts shall be submitted for independent audit and thereafter published.[51] Lastly, such dominant service or facilities provider is required to supply financial information to the NCC promptly on request.[52]

THE LEGAL REGIME OF MERGERS, ACQUISITIONS, AND TAKEOVERS

The CPR 2007 is not alone in regulating merger and acquisition arrangements in the telecommunications industry in Nigeria. Even though Section 90 of the NCA 2003 gives the NCC the exclusive authority to regulate competition in the telecommunications industry, which is the especial strenght of concern in this chapter, Section 93 of the Federal Competition and Consumer Protection Act (FCCPA), 2018 also provides that “a proposed merger shall not be implemented unless it has first been notified to, and approved by, the (Federal Competition and Consumer Protection Commission)”[53] while Section 140(1) of the Investment and Securities Act (ISA) 2025[54] also gives the Securities and Exchange Commission (SEC) the ‘power to control every proposal, scheme, transaction, arrangement or activity’ of a public company.[55] Section 142 provides that the SEC is empowered to ‘regulate and govern the conduct of persons involved in takeovers, mergers or compulsory acquisition’[56] and ‘no person or two or more persons jointly or in concert, shall make a takeover bid unless an authority to proceed with the takeover bid has been granted by the (SEC).’[57] It seems, therefore, that while the ISA 2025 treats merger regulation as a corporate governance instrument aimed at ensuring fair treatment of investors, the FCCPA treats it as a competition law instrument that ensures that market structures remain competitive.[58]

Other applicable regulations governing mergers, acquisitions and takeovers are the Companies and Allied Matters Act (CAMA), 2020,[59] the Merger Review Regulations 2021, the Merger Review Guidelines, 2020, the Rule Book of the Nigerian Stock Exchange,[60] the Companies Regulations, 2021, and the Rules and Regulations of the Securities and Exchange Commission (SEC) 2013. There are also some sector-specific laws on mergers, acquisitions and takeovers regulating target companies operating in specific business markets. These include the Insurance Act, 2003, the Petroleum Act,[61] the Central Bank of Nigeria Act, 1991 (as amended)[62], as well as the Electricity Act 2023, and so on.

Mergers and acquisitions (M&A) are a term generally used to indicate the process of amalgamation of companies through various types of transactions. Although they are used interchangeably, they have clear different meanings. However, as the distinction between the terms has become blurred, the distinguishing factor to determine the difference is that, whereas there is a fusion in a merger, both the acquired and the acquirer companies remain in existence in the case of an acquisition. In other words, there is a merger where two or  more companies or corporations  consolidate and become  a  single  company or corporation  while  in  acquisition,  a more financially buoyant company or corporation ‘consumes’ the small company or corporation. An acquisition is, therefore, an arrangement whereby a company acquires the controlling holding of shares in another company. In simple words, an acquisition occurs when one company acquires sufficient shares in another company such that it acquires control of the other company.[63] Two types of acquisitions are possible: a stock sale[64] and an asset sale.[65] A ‘merger’ also exists as a structural fusion of two firms, which results in a common ownership and management structure, while an acquisition is a type of merger in which a firm with more resources and greater market strength may acquire another firm.[66]

On the one hand, the FCCPA 2018 states that when one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another undertaking, a merger is said to have occurred.[67] This may result from the purchase or lease of the shares, an interest or assets of the other undertaking in question or the amalgamation of the other undertaking or through a joint venture.[68] On the other hand, the ISA 2025 describes ‘merger’ as “the amalgamation, combination, acquisition, establishment, or otherwise directly or indirectly, by one or more persons, whether by purchase of shares or lease of assets, resulting in a joint venture, control over or significant interest in the whole or a part of a business of any other person’. Rule 227(1) of Rules and Regulations of SEC also defines “merger” as an amalgamation of the undertakings or any part of the undertakings or interest of two or more companies and one or more bodies corporate.” This form of merger can be consummated through either purchase or lease of the shares, interest or assets of the other company in question or amalgamation or other combination with the other company in question.

Merger may be “vertical,” or “horizontal.” A “vertical merger” takes place where two or more companies or corporations operating at different but complementary levels within an industry’s supply chain consolidate their operations. This inevitably increases synergies created by the consolidated companies or corporation that would be more efficient operating as one corporate entity. In a “horizontal merger”, amalgamation occurs between two or more competing companies offering the same service or delivering the same goods or product within the same space or segment of a given market. In sum, while a “vertical merger” occurs between two companies or corporations in the same industry and at different stages of production, a “horizontal merger” occurs between two companies or corporations in the same industry and at the same stage of production. Some notable, blockbuster mergers and acquisitions in the Nigerian telecommunications industry are as follows:

• MTN Nigeria acquired VGC Communications Limited in 2008
• Bharti Airtel acquired Zain (now Airtel Nigeria)[69] in 2010
• Visafone acquired Cellcom Communications Limited in 2011
• Helios Towers Nigeria Limited acquired Multi-Links Communications in 2011
• IHS Nigeria acquired Helios Towers Nigeria Limited in 2016
• Equinix acquired MainOne (a West African Telecommunications, Data Centre and Network Solution Provider) in 2022
• UK-Based LH Telecommunications Limited acquired 9Mobile ((Emerging Markets Telecommunication Services Limited) in 2024
• MTN Group acquired IHS Towers (2026)

Regulation 26 of the CPR 2007 establishes the foundation for the powers of the NCC to control mergers and acquisition in the telecommunications sector. It provides:

“Further to the powers and functions of the (NCC), regarding determinations of substantial lessening of competition and dominant position, and consistent with conditions of licences granted to public network operators, requiring prior notification and (NCC) approval before any change of share holding affecting more than 100% of the total number of shares in a (service or facilities provider), the (NCC) may review all mergers, acquisitions and takeovers in the (tele)communications sector.”[70]

The above provision lends credence to the powers of the NCC to review mergers, acquisitions and takeovers and is adjunct to its authority to regulate competition in the telecommunications industry. Thus, as the sole regulatory authority in the telecommunications sector, the NCC makes the foregoing specification a condition in every service or facilities provider’s licence. For instance, under Condition 13.1 of the Internet Services Licence issued to all Internet Service Providers (ISPs), it is a condition that the NCC must be notified “of any change in the control of any of the shares in the Licensee to which this condition applies and any such notification shall be given as soon as practicable after the change in question is proposed.”[71]

Under Regulation 27 of the CPR 2007, the procedures to govern the review of mergers, acquisitions and takeovers in the telecommunications sector and these procedures are established to govern the following:

• transactions involving the acquisition of more than 10% of the shares of a service or facilities provider;
• any other transaction that results in a change, in control of the service or facilities provider; or
• any transaction that results in the direct or indirect transfer or acquisition of any individual licence, previously granted pursuant to the NCA 2003; and
• where the Commission determines, based on the preliminary information provided by a Licensee in its initial transaction notification, that the transaction may, result in a substantial lessening of competition in one or more communications markets or may, result in the Licensee or any successor company having a dominant position in one or more communications markets.[72]

Where a service or facilities provider is involved in any merger, acquisition or takeover arrangement mentioned under Regulation 27(a) to (c) of the CPR 2007, it must notify the NCC in order to seek and obtain its approval[73] within sixty days prior to the completion of the proposed transaction.[74] The notification and request to the NCC for approval is to contain the following information:

(a) the identification of all persons involved in the transaction, including buyers, seller, their shareholders and affiliated companies, and any pensions, having a greater than 10 per cent ownership interest in all such persons involved in the transaction;

(b) a description of the nature of the proposed transaction, including a detailed analysis of the resulting scheme of arrangement and summary of its commercial terms;

(c) financial information on the persons involved in the proposed transaction, including their annual revenues from all communications markets, identified by specific markets, the value of assets allocated to communications businesses and copies of any recent annual or quarterly financial reports ;

(d) a description of the (tele)communications markets in which the persons involved in the proposed transaction operate; and

(e) a description of the effects of the transaction, on the control of network facilities or related infrastructure, including any interconnection or access arrangements with other service or facilities providers.[75]

Note that the NCC may request further information on the proposed transaction at any time.[76] Once the NCC has received a fully completed application, including any additional information requested about the proposed transaction, the NCC is required to, within thirty days:

(a) approve the proposed transaction without conditions;

(b) approve the proposed transaction with such conditions as it determines necessary to prevent or compensate for any substantial lessening of competition resulting from the transaction ;

(c) deny the approval of the proposed transaction ;

(d) issue a notice initiating a public inquiry or other public proceeding regarding the proposed transaction and, following such proceeding, the NCC may take one of the actions described in sub-paragraphs (a), (b), or (c) above.[77]

Any party or parties to the proposed transaction may apply to the NCC, requesting an expedited approval of the transaction in cases where the NCC fails to take any of the foregoing steps within the stipulated thirty-day period.[78]Prior to approval for a proposed transaction being given or denied by the NCC,  the NCC is required to determine whether such transaction has the effect of substantially lessening competition or leading to a position of dominance.[79]In making such a determination, the NCC is required to consider the following factors:

(a) definition of the relevant market or markets likely to be affected by the transaction;

(b) impact of the trasaction on existing competitors in the identified markets 

(c) impact of the transaction on further market entry;

(d) impact of the transaction on consumers, including the availability and pricing

of products and services;

(e) degree of interference of the transaction with competition that results in identifiable injury to competitors or consumers.[80]

(f) degree of market power of the service or facilities provider[81] and a smaller degree of interference or injury resulting from the transaction with a large degree of service or facilities provider’s market power which may constitute substantial lessening of competition.[82]

Additionally, the determination of the NCC is required to extend to ensuring that the proposed merger, acquisition or takeover does not have the effect of further strenghtening a service or facilities provider’s position of dominance.[83] In doing so, the NCC is required to consider the market share of the service or facilities provider determined by reference to revenues, number of subscribers or volume of sales;[84] the overall size of the service or failities provider compared to competing facilities or service provider, particularly any resulting economics of scale or scope which permits the larger service or facilities provider to produce products or provide services at lower costs;[85] the control of network facilities or other infrastructure, access to which is required by competing service or facilities provider and which cannot, for commercial or technical reasons, be duplicated by competing service or facilities provider;[86] the absence of buying power or negotiating position by customers or consumers, including substantial barriers to switching service or facilities providers;[87] the ease of market entry, and the extent to which actual or potential market entry protects against the exercise of market power such as raising prices;[88] the rate of technological or other change in the market, and related effects for market entry or the continuation of a dominant position.[89]

Procedures for the Enforcement of Competition-Related Complaints

The opening salvo of the Schedule to the CPR 2007 states those procedures to be followed by the NCC in investigating and determining the following situations:

• where it wishes to determine whether the conduct of a service of facilities provider constitutes a substantial lessening of competition, pursuant to Sections 91(1) or 92(4) of the NCA 2003; or
• where a service or facilities provider is in a dominant position pursuant to Section 92(1) of the NCA 2003; or
• where a Licensee is otherwise in breach of any of the provisions of the CPR 2007.[90]

The NCC is required to adhere strictly to the enforcement procedures set out under the CPR 2007 or such other procedures specifically identified in any notice issued by the NCC, and these procedures are adjunct to the procedural provisions under Chapter V of the NCA 2003.[91]

The Schedule to the CPR 2007 provides for both the enforcement proceedings that are commenced by an interested party[92] as well as those that are initiated by the NCC.[93] On the one hand, any interested party wishing the NCC to conduct an investigation into a competition related complaint or take an action against a service of facilities provider is required to submit a written request (Request for Investigation) to the NCC and must also submit a copy of the Request for Investigation to the other party (Responding Party) on same day that the Request for Investigation is received by the NCC.[94] The Request for Investigation must summarize the nature of the complaint as well as the desired outcome, including a summary of all relevant events or circumstances and any related correspondence or accompanying materials.[95] The Responding Party has ten days within which it must either respond to the complaint or furnish the NCC with reasons as to why the NCC should not investigate the complaint.[96] The Responding Party is required to then deliver a copy of its response to the complainant on the same day that the response is received by the NCC.[97]The NCC, upon receipt of the response from Responding Party, is required to consider whether it wishes to undertake an investigation or take any other action in response to the complaint[98] and must, within thirty days of the submission of the Request for Investigation, issue a written notice to the parties, indicating whether it wishes to take action, the specific action to be taken as well as the basis for its decision.[99] In all cases where the NCC has received more than one Request for Investigation in relation to substantially the same conduct or circumstances, it may consolidate the Requests for Investigation into a single proceeding.[100]

In a situation where the NCC wishes to conduct an investigation into a complaint and communicates this position to the parties, the complainant is required to make its formal written submissions regarding the complaint (Complaint Submissions) within thirty days.[101] The Complaint Submissions are expected to set out a full statement of the circumstances and arguments the complainant relies on in support of its position and the desired outcome, including any specific breaches of the NCA or any regulation, rule, direction, licence condition, or other right or obligation, committed by the responding party, as well as the consequences of those breaches for the complainant.[102] The Complaint Submissions are also expected to include any documentary or other evidence relied on by the Complainant in support of its position and desired outcome.[103] A copy of the Complaint Submissions is required to be delivered to the Responding Party on the same day that they are received by the NCC.[104] Upon receipt of the Complaint Submissions from the Complainant by the Responding Party, the latter is expected to submit its written response (Response) within fifteen days to both the Complainant and the NCC on the same day.[105] The Response is required to identify how the position of the Responding Party and that of the complainant diverge from a common standpoint, including any circumstances or arguments included in the Complaint Submissions that the Responding Party admits or agrees with. In sum, the Responding Party is required to provide in the Response a clear statement of how its own position differs from that of the complainant and the circumstances and evidence in support of its position and desired outcome.[106] In all appropriate cases, the NCC may permit the complainant to reply in writing and, in such cases, will permit the Responding Party to submit a final written response, addressing any new submissions or evidence raised in the complainant’s reply.[107] Both the complainant and the Responding Party are required to submit their further submissions or evidence, within the time period prescribed by the NCC, or if no time period is specified, then within fifteen days of being informed by the NCC that it may make the further submissions.[108]

On the other hand, the NCC may, on its own volition, initiate competition enforcement proceeding (Commission Proceeding) to determine whether a service or facilities provider’s conduct constitutes a substantial lessening of competition pursuant to sections 91(1) or 92(4) of the NCA 2003 or whether a service or facilities provider is in a dominant position pursuant to section 92(1) of the NCA 2003[109] or whether any conduct of a service or facilities provider is in violation of the CPR 2007.[110] The NCC is required to commence its Commission Proceeding by delivering a written notice to the service or facilities provider or any other person who is the subject of  the proceeding (Proceeding Notice).[111] The written notice so delivered must clearly show the nature of the proceeding, including a summary of the events, circumstances, alleged conduct, and the provisions of the NCA 2003, licence conditions or any regulations, decisions, directions, or rules of the NCC relevant to the proceeding and the potential outcome or practical effects of the proceeding.[112] The notice is also required to specify any additional or other procedures applicable to the proceeding, including the timing for the delivery of submissions, by the person(s) receiving the Proceeding Notice or any other interested persons, and the further actions to be taken by the NCC towards the conclusion of the proceeding.[113]

Completion of Enforcement Proceedings Commenced under the CPR 2007

The NCC may exercise a discretion to grant an extension of time to any interested party in the proceeding to make its submission upon receipt of a written request from such party to the NCC, not later than five days before the expiration of the applicable deadline.[114] The NCC is required to inform parties of its decision on the request for an extension within three days of receipt of the request.[115] The NCC may also request either party or both parties to submit additional information at any time in the course of a proceeding[116], and, where a party wishes to submit confidential information to the NCC in connection with the proceeding, such a party may request the NCC for confidential treatment of such information.[117] The NCC has a mandate to generally complete proceedings commenced under the CPR 2007. In that event, it is required to issue a decision resolving the issues or a notice specifying any other actions to be taken regarding the proceeding within sixty days of receiving all required information. The NCC may also extend the time to issue its decision upon a written notice to the parties.[118] Once a proceeding has been completed, the NCC may take any of the following actions:[119]

(a) issue a direction requiring the responding party or any other person to undertake specific

actions or to cease specific actions or to resolve any conduct contrary to the NCA 2003 or any Regulation, rule, direction, licence condition or related right or obligation;

(b) issue a direction making specific determinations regarding specific circumstances or

issues relevant to the proceeding, including the payment of any applicable compensation;

(c) exercise its rights under the NCA 2003 or the Enforcement Processes Regulations, 2019, to impose specific monetary or other penalties for identified misconduct;

(d) refer any outstanding matters to the Federal High Court or any other appropriate authority that is competent to resolve the outstanding matters; or

(e) where the proceeding raises questions of general interest or application to the telecommunications sector, initiate a further public consultation or inquiry that allows submissions from other interested parties and make resolution of the earlier proceeding subject to the conclusion of that consultation or inquiry.[120]

During the pendency of the completion of a proceeding, however, the NCC is entitled to make interim determinations, including issuing interim directions[121] although the exercise of such powers to make interim determinations must not interfere with a party’s right to seek interim or emergency relief from a court of competent jurisdiction. Upon completion oof a proceeding, any decision reached by the NCC is required to be in writing and must include a statement of reasons for the decision.[122] Except as otherwise directed by the NCC, the parties are required to bear their own costs of the proceeding[123] and the NCC may, during the course of completing any proceeding, exercise its discretion to enlist the services of an appropriately qualified expert to assess any issues or circumstances raised by a party, that should be considered with the benefit of specialist knowledge.[124]

Mergers and Acquisitions under the Investment and Securities Act (ISA) 2025[125]

Prior to 2019, the sole regulatory body for all arrangements on mergers, acquisitions and takeovers for both public and private companies in Nigeria was the Securities and Exchange Commission (SEC) through the Investments and Securities Act (ISA) 2007, which has been repealed and replaced with the ISA 2025. When the Federal Competition and Consumer Protection Commission Act (FCCPA) 2018 was enacted, it repealed the provisions on mergers and acquisitions in the ISA 2007 and replaced them with those in the FCCPA, making the Federal Competition and Consumer Protection Commission (FCCPC) the primary regulatory authority in charge of mergers. However, the SEC still retains its exclusive mandate to regulate mergers and acquisitions among public companies, being the sole regulator of the capital market in Nigeria.

Section 357 of the ISA 2025 defines ‘merger’ as ‘the amalgamation, combination, acquisition, establishment, or otherwise directly or indirectly by one or more persons, whether by purchase of shares or lease of assets, resulting in a joint venture, control over or significant interest in the whole or a part of a business of any other person.’[126] On the other hand, the FCCPA 2018 defines ‘merger’ more broadly as occurring when one or more undertakings directly or indirectly acquire or establish control, whether direct or indirect, over the whole or part of the business of another undertaking. Such a merger may be achieved in various ways, including through the purchase or lease of shares, an interest or assets of the other undertaking in question; the amalgamation or other form of combination with the other undertaking; or by means of a joint venture.

The ISA 2025 establishes its mandates to include, inter alia,  the need to ‘act in the public interest having regard to the protection of investors and the maintenance of fair, efficient and transparent markets’[127] as well as to ‘prevent unauthorized, illegal, unlawful, fraudulent and unfair trade practices relating to securities and investments.’[128]  Section 3(p) of the ISA 2025 provides that one of the powers and functions of the SEC is to “review and approve takeovers and all forms of business combinations and affected transactions of all public companies” in Nigeria.

Section 140 of the ISA 2025 provides the germ for the mergers and acquisitions arrangements, stating as follows:

‘Without prejudice to the powers of other financial market regulators, a public company shall not, without the prior approval of the (SEC), undertake a proposal, scheme, transaction, arrangement, or activity or issue securities or offer for subscription or purchase of securities in relation to:

(a) the conversion of a public company or the reconstruction of its shares;

(b) a carve-out, spin-off, or other form of restructuring of its operations; or

(c ) the acquisition or disposal of assets which results in a significant change in the business direction or policy of a public company or any other listed entity, whether or not in relation to any proposal, scheme, transaction, arrangement or activity.’[129]

The above provision clearly establishes the need for every merger and acquisition or business combination between or among companies to first be reviewed and approved by the SEC.[130]

The ISA 2025 goes further to establish a step-by-step framework for effecting mergers involving public companies. Thus, it provides that where a merger involving a public company is achieved or to be achieved by amalgamation or other combination with the other undertaking in question, the following steps are followed:[131]

(a) The SEC may grant approval in principle to the company involved to make an application to the Federal High Court to order separate meetings of shareholders of the merging companies so as to secure the consent of the shareholders to the proposed merger.[132]

(b) During the court-ordered meeting, a majority not less than 75% of shareholders must be in attendance, voting either in person or by proxy, and must approve the proposed merger.[133] The approved merger scheme is then referred back to the SEC for review and approval.

(c) Where the merger scheme is approved by the SEC, the merging companies make an application to the Federal High Court for the merger to be sanctioned. Upon being sanctioned by the Court, the scheme becomes binding on the companies, their shareholders, and other affected parties, subject to the Companies and Allied Matters Act, 2020.[134]

A corollary to this is Section 142, which stridently requires the SEC to regulate and govern the conduct of persons involved in takeovers, mergers, or compulsory acquisitions, including an acquirer, target company, offerer, offeree, and their officers and associates.’ This provision clearly shows that the SEC acts like a referee in all takeovers and mergers, ensuring that every party involved in the corporate transaction plays by fair, transparent, and lawful rules. This ensures transparency and prevents market abuse. Also, no person or two or more persons jointly must make a takeover bid unless the SEC has granted such person or persons authority to proceed.[135] However, according to Rule 230 of the Rules and Regulations of the SEC, “holding companies acquiring shares solely for investment and not using the same by voting or otherwise to cause or attempt to cause a substantial restraint of competition” are not required to obtain the prior approval of the SEC before acquiring shares of its subsidiary for investment purposes only.

Generally, the SEC is required to approve mergers and acquisitions arrangements only upon the determination of the following factors:

• whether or not the merger is likely to substantially cause, or likely to cause, a substantial restraint of competition or tend to create a monopoly in any line of business enterprise. Where it appears that the merger is likely to susbtantial lessening of, or prevent, competition, the SEC is to further determine whether the merger can or cannot be justified on substantial public interest and whether or not the merger is likely to result in any technological efficiency or other pro-competitive gain which is greater than, and off-set, the effects of any prevention or lessening of competition that may result or is likely to result from the merger, which would not likely occur if the merger is prevented;
• whether the merger can or cannot be justified on substantial public interest grounds;
• whether all shareholders are fairly, equitably, and similarly treated and given sufficient information regarding the merger.

Note that even where the contemplated merger is likely to restrain or lessen competition, it may still be approved if one of the parties to the merger can prove the contrary.

According to the ISA 2025, in determining whether or not a merger is likely to substantially prevent or lessen competition, the SEC is required to make assessment of the strength of competition in the relevant market, and the probability that the company, in the market after the merger, and consider any factors relevant to competition in that market which include:

(a) the actual and potential level of import competition in the market;

(b) the ease of entry into the market, including tariff and regulatory barriers;

(c) the level and trends of concentration, and history of collusion in that market;

(d) the degree of countervailing power in the market;

(e) the dynamic characteristics of the market, including growth, innovation, and product differentiation;

(f) the nature and extent of vertical integration in the market;

(g) whether the business or part of the business of a party to the merger or proposed merger has failed or is likely to fail; and

(h) whether the merger will result in the removal of an effective competitor from the relevant market.

The ISA 2025 provides that an application for approval to proceed with a takeover bid must be made to, and approval received from, the SEC.[136]

As can be seen from the foregoing, the provisions of the ISA 2025 extend to the telecommunications sector nothwithstanding that copious provisions exist under the CPR 2007 that already cover matters on mergers and acquisitions. However, this is not to be considered an usurpation of NCC’s mandates to regulate mergers and acquisitions in the telecommunications sector.

Mergers and Acquisitions under the Federal Competition and Consumer Protection Act (FCCPA), 2018

The regulatory framework guiding mergers and acquisitions in Nigeria is exercised by the Federal Competition and Consumer Protection Commission (FCCPC), a creation of the Federal Competition and Consumer Protection Act (FCCPA) 2018. The FCCPA abrogated some sections of the Investments and Securities Act 2007 (ISA) concerning the SEC’s previous control and oversight on mergers. The FCCPA is empowered to regulate mergers, acquisitions and takeovers and sanction all anti-competition practices. It establishes the Consumer Protection Tribunal to enable the development and promotion of “fair, efficient and competitive markets in the Nigerian economy.”[137] One of the specific objectives of the FCCPA is “to prohibit restrictive or unfair business practices which prevent, restrict or distort competition or constitute an abuse of a dominant position of market power in Nigeria.[138] The FCCPA defines ‘merger’as occurring when one or more undertakings directly or indirectly acquire or establish control, whether direct or indirect, over the whole or part of the business of another undertaking. Such a merger may be achieved in various ways, including through the purchase or lease of shares, an interest or assets of the other undertaking in question; the amalgamation or other form of combination with the other undertaking; or by means of a

Section 17 of the FCCPA establishes the broad functions of the FCCPC to include:

(a) the responsibility for the administration and enforcement of the provisions of the FCCPA and any other enactment with respect to competition and protection of consumers;[139]

(b) the initiation of broad-based policies and review of economic activities to identify anti-competitive, anti-consumer protection and restrictive practices which may adversely affect the economic interest of consumers and the making of rules and regulations with regards to competitions and protection of consumers;[140]

(c) advising the Federal Government generally on national policies and matters pertaining to all goods and services and on the determination of national norms and standards relating to competition and consumer protection;[141]

(d) reporting annually on market practices and the implications for consumer choice and competition in the consumer market;[142]

(e) the elimination of anti-competitive agreements, misleading, unfair, deceptive, or unconscionable marketing, trading, and business practices;[143]

(f) the protection and promotion of consumer interests;[144]

(g) ensuring that consumers’ interests are considered at appropriate fora and providing redress to obnoxious practices or the unscrupulous exploitation of consumers by companies, firms, trade associations, or individuals.[145]

The FCCPA expressly prohibits all agreements or decisions among undertakings or decisions of associations of undertakings that have the effect of preventing, restricting, or distorting, or are likely to prevent, restrict or distort competition in any market.[146] Unless the entering into such agreements or decisions has been duly authorised by the FCCPC, they are void and of no legal effect.[147]  Hence, the FCCPA establishes the powers of the FCCPC to approve all mergers by providing as follows:

“Subject to the notification threshold to be determined from time to time…., a proposed merger shall not be implemented unless it has first been notified to, and approved by, (the FCCPC).”[148]

The FCCPA further classifies merger transactions into two categories:

• a ”small merger” which refers to a merger with a value at or below the threshold stipulated by the FCCPC by regulations; and
• a”large merger” which relates to a merger with a value above the threshold stipulated by the FCCPC by regulations.[149]

When considering a merger transaction, the FCCPC is required to determine whether or not the merger is likely to substantially prevent or lessen competition.[150] Where  the rnerger is likely to substantially prevent or lessen competition, then the FCCPC is to further determine whether or not the merger is likely to result in any technological efficiency or other pro-cornpetitive gain which will be greater than, and off-set, or is likely to result from the merger, and would not likely have resulted if the merger had been prevented. The FCCPC is also required to determine whether the rnerger can or cannot be justified on substantial public interest grounds.[151] To aid the FCCPC in making such determination as to whether or not a merger transaction or a proposed merger transaction is likely to substantially prevent or lessen competition, the FCCPC is required to assess the strenglh of competition in tlre relevant market and the probability that the company will behave competitively in the market after the merger. The factors that the FCCPC is required to consider in making such assessment are the following:

(a) the ease of entry into the market, including tariff and regulatory barriers;[152]

(b) the level and trends of concentration and history of collusion in the market;[153]

(c) the degree of countervailing power in the market;[154]

(d) the dynamic characteristics ofthe rnarket, including growth, innovation, and product differentiation;[155]

(e ) the nature and extent of vertical integration in the market;[156]

(f) whether the business or part of the business of a party to the merger or proposed merger has failed or is likely to fail;[157] and

(g) whether the merger or proposed merger will result in the removal of an effective competitor.[158]

In all situations that appear to the FCCPC that a merger or proposed merger is likely to substantially prevent or lessen competition, the FCCPC is required to determine as follows:

• whether or not the merger or proposed merger is likely to result in any technological efficiency or any other pro-competitive advantage that is greater than and off-sets the effects of any prevention or lessening of competition arising from the merger, while allowing consumers a fair share of the resulting benefit;[159]
• whether the merger or proposed merger can or cannot be justified on substantial public interest grounds by assessing the effect the merger or proposed merger will have on a particular industrial sector or region; employment; the ability of national industries to compete in international markets and the ability of small and medium scale enterprises to become competitive.[160]

Under the FCCPA, parties to small merger arrangements are not required to notify the FCCPC, except where such notification is required.[161] Usually, such notification will be required within six months after the small merger has been implemented where the FCCPC determines that the small merger may substantially prevent or lessen competition.[162] The notification of the merger is required to be published within five business days after receipt by the FCCPC.[163] However, a formal notification for approval must be sent to the FCCPC in the case of a large merger,[164] and the notification of the merger is required to be published within five business days of receipt by the FCCPC.[165] All parties to both the small merger and large merger are prohibited from implementing the merger until and unless it has been approved, with or without conditions, by the FCCPC.[166] The FCCPA provides grounds for the revocation of the approval for a small or large merger where the FCCPC has found that the decision to approve was based on incorrect information for which a party to the merger is responsible[167] or where the approval was obtained by deceit[168] or where the parties fail to implement the merger within 12 months after the approval was obtained[169] or where the company concerned has breached an obligation attached to the decision of the FCCPC in approving the merger.[170]

Mergers and Acquisitions under the Companies and Allied Matters Act (CAMA) 2020

The Corporate Affairs Commission (CAC) was established by the Companies and Allied Matters Act 2020 (CAMA)[171] Under CAMA, there are provisions governing schemes of arrangement which allow for corporate restructuring where companies and undertakings undergo joint schemes for mergers and acquisitions, takeovers, arrangements, reconstructions or compromises. CAMA contains provisions governing companies and undertakings in ensuring that they comply with specific statutory procedures, including the need to obtain necessary regulatory approvals and filing of necessary documentation with the CAC. Among other duties, the CAC is charged with the responsibility of receiving corporate filings as well as the certifification of corporate resolutions and the de-registration of any dissolved company which may occur during the merger transaction.[172] CAMA also ensures that the interests of minority shareholders are adequately protected and safeguarded during these transactions.

Mergers and Acquisitions vis-a-vis the Nigerian Exchange Limited (NGX)

The Nigerian Exchange Limited (NGX) also plays a significant regulatory oversight in mergers and acquisitions, ensuring listed companies adhere to its listing rules and submit requisite documentation for approval. Hence, all listed companies are required to notify the NGX of all merger and acquisition arrangements, including drafts of circulars and other scheme documents for review and approval.

Mergers and Acquisitions vis-a-vis the Federal High Court (FHC)

The Federal High Court (FHC) also acts as a relevant judicial authority in the control of merger. Under Section 251 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) establishes the powers of the FHC to handle matters relating to mergers and acquisitions, For instance, it makes orders for shareholders’ meetings to consider arrangements and compromise schemes involving the transfer of shares. Either of the merging companies can also proceed to the FHC to have the merger sanctioned by the court after obtaining the requisite approval from the SEC.

Conclusion  

The concepts of dominance, mergers, and acquisitions remain central to understanding competition dynamics in the telecommunications sector. When considered in light of the strategic importance of telecommunications as a driver of economic growth, innovation, and digital inclusion, the regulation of market dominance and corporate restructuring within the sector demands careful legal policy and consideration. Dominance in the telecommunications sector is often a natural consequence of large-scale investment, technological superiority, and established market presence. However, while dominance is not inherently unlawful, its abuse can distort competition, hinder market entry, and adversely affect consumer welfare. This explains why regulatory scrutiny is essential in ensuring that dominant operators do not exploit their position to the detriment of competitors and consumers. Also, mergers and acquisitions serve as important mechanisms for business expansion, operational efficiency, and technological advancement. However, where such transactions substantially lessen competition or create excessive market concentration, they may undermine the broader objectives of consumer welfare and market efficiency. The telecommunications sector is particularly sensitive to these concerns due to its essential service nature and the high barriers to entry that characterize the industry. Regulatory authorities must therefore remain vigilant in assessing market behaviour and transactional arrangements to preserve competition, encourage innovation, and safeguard the interests of consumers in an increasingly digital economy.

FOOTNOTES:

[1] Section 1(e), NCA 2003.

[2] See Uchenna Jerome Orji, Telecommunications Law and Regulation in Nigeria (Cambridge Scholars Publishing, 2018), page 379.

[3] See https://www.concurrences.com/en/dictionary/dominance-notion, accessed 24^th March, 2025;

[4] (1978) ECR 207, Page 277.

[5] Section 92(1), NCA 2003.

[6] Section 92(2), NCA 2003.

[7] Section 92(3), NCA 2003.

[8] See also Regulation 16, CPR 2007.

[9] Regulation 20, CPR 2007.

[10] Regulation 20, CPR 2007.

[11] Regulation 17, CPR 2007.

[12] Regulation 18(1) CPR 2007.

[13] Regulation 18(2), CPR 2007.

[14] See Regulation 18(2) (a to f), CPR 2007.

[15] Regulation 19(1), CPR 2007.

[16] Regulation 19(2), CPR 2007.

[17] Demand-side substitutability is a measurement of how far a range of products or services being offered by a service or facilities provider may be considered as reasonable substitutes for one another by the users of those products or services. Hence, demand-side substitutability speaks to the extent to which consumers are able to switch to substitute products that they consider sufficiently similar in use in situations where a service or facilities provider  decides to effect a small but significant upward adjustment in price.

[18] Regulation 19(2) (a to c), CPR 2007.

[19] Regulation 21, CPR 2007.

[20] Regulation 22, CPR 2007.

[21] United Brands Company and United Brands Continentaal BV v. Commission of the European Communities (1978) ECR 207.

[22] https://guardian.ng/technology/nigeria-considers-new-study-to-determine-dominance-in-telecoms-sector/, accessed on 23 March, 2025.

[23] Ibid.

[24] https://businessday.ng/uncategorized/article/dominance-dilemma-market-consolidation-and-averting-potential-monopoly-in-nigerian-telecoms-sector/, accessed on 23 March, 2025.

[25] https://nairametrics.com/2016/02/08/etisalat-sues-mtn-for-trying-to-dominate-telecoms-sector/, accessed on 23 March, 2025.

[26] See EMTS (Etisalat) Limited v. MTN Communications Limited (2016) Unreported, Suit No. FHC/L/CS/130/2016.

[27] https://www.nigeriacommunicationsweek.com.ng/stakeholders-worry-over-possible-dominance-of-starlink-on-nigerias-isps-market/, accessed on 24 March, 2025.

[28] Section 108 prohibits holders of individual licences from imposing any tariff or charges for the provision of any service without the approval of the NCC while Section 111 until the Commission has provides that appropriate financial penalties will be imposed upon any holder of an individual licence who exceeds the tariff rates duly approved by the NCC.

[29] The National Communications Authority (NCA) is Ghana’s telecoms regulatory authority.

[30] Act 775 allows the NCA to take “corrective measures” against an SMP in order to promote competition and protect other mobile network operators and consumers.

[31] https://www.graphic.com.gh/news/general-news/mtn-challenges-nca-directive-in-court.html, accessed on 23 March, 2025.

[32] See NCC, Determination of Dominance in Selected Telecoms Markets: https://ncc.gov.ng/node/250 , accessed on 24 March, 2025.

[33] See NCC, Determination of Dominance in Selected Telecoms Markets: https://ncc.gov.ng/node/250, accessed on 24 March, 2025.

[34] See NCC, Determination of Dominance in Selected Telecoms Markets: https://ncc.gov.ng/node/250, accessed on 24 March, 2025.

[35] The downstream segments review by NCC focused on handsets/device (including the Device Operating System) and Applications/Content (including m-commerce).

[36] On-net/off-net differential pricing means the practice of a network provider charging subscribers higher rates for making off-net calls (that is, voice calls originating on its network and terminating on a competitor’s network) rather than on-net calls which are voice calls originating from, and terminating on own network. Therefore, the discriminatory price by MTN Nigeria between calls within its own network (on-net calls) and calls to, and terminating on, other networks (off-net calls) refers to on-net and off-net differential.

[37] Regulation 25, CPR 2007.

[38] Section 92(4), NCA 2003.

[39] See Regulation 8, CPR 2007.

[40] Case COMP/39.523, decision of the European Commission of October 16, 2014.

[41] Case COMP/C-1/37.451, 37.578 and 37.579, decision of the European Commission of May 21, 2003; Case COMP/38.233, decision of the European Commission of July 16, 2003; Case COMP/38.784, decision of the European Commission of July 4, 2007; Case COMP/39.525, decision of the European Commission of June 22, 2011.

[42] https://timesofmalta.com/article/Abuse-of-dominance-in-telecoms-market-confirmed.416210, accessed on 24 March, 2025.

[43] (1979) ECR 461.

[44] See Part III of the Telecommunications Networks Interconnection Regulations, 2007 on ‘Interconnection Obligations imposed on dominant telecommunications operators.’

[45] Regulation 10(1), Telecommunications Networks Interconnection Regulations, 2007.

[46] Regulation 10(2), Telecommunications Networks Interconnection Regulations, 2007.

[47] Regulation 10(3), Telecommunications Networks Interconnection Regulations, 2007.

[48] Regulation 11(1), Telecommunications Networks Interconnection Regulations, 2007.

[49] Regulation 12(1), Telecommunications Networks Interconnection Regulations, 2007.

[50] See NCC’s Determination- Implementatioon of an Accounting Separation Framework for the Nigerian Telecommunications Industry, 8th day of July 2020. 

[51] Regulation 12(2), Telecommunications Networks Interconnection Regulations, 2007.

[52] Regulation 12(3), Telecommunications Networks Interconnection Regulations, 2007.

[53] See Section 93(1), Federal Competition and Consumer Protection Act, 2018.

[54] See also the Rules and Regulations of the Securities and Exchange Commission.

[55] See Section 140(1), ISA 2025.

[56] See Section 142(1), ISA 2025.

[57] See Section 144(1), ISA 2025.

[58] See S. Ademuagun, Procedure for Mergers Under the Investment & Securities Act 2025 in Connection with the Federal Competition and Consumer Protection Act, 2018, AEFULJ Vol. 1 (2), December 2025, page 133.

[59] The legal procedures for corporate restructuring, including mergers and acquisitions, are contained under Sections 710 to 717 of CAMA, 2020 and these include the the passing of resolutions by shareholders, obtaining necessary approvals and filing requisite documentation with the Corporate Affairs Commission (CAC) once the interests of the minority shareholders are safeguarded and protected during the transactions.

[60] This is applicable to listed public companies.

[61] See also the Nigerian Oil and Gas Industry Content Development Act, 2010.

[62] See also CBN Procedures Manual for Applications for Bank Mergers/Take-Overs (as updated).

[63] Prof. C.O. Okonkwo, Legal Framework on Mergers and Acquisitions at https://www.cbn.gov.ng/out/publications/bsd/2005/legal%20framework%20for%20mergers%20%20acquisitions.pdf accessed on 25 March, 2025.

[64] This is where the buyer purchases the entire business entity, including assets and liabilities. Here, the business still owns the assets and liabilities. However, the buyer is the company’s new owner.

[65] This occurs where the buyer purchases a particular asset of the target company, such as an intellectual property. In some cases, companies even sell an entire business segment which is known as divestiture.

[66] See C. Blackman and L. Srivastava, Telecommunications Regulation Handbook (Wahington DC: The World Bank, 2011), page 31.

[67] Section 92(a), FCCPA 2018.

[68] Section 92(b), FCCPA 2018.

[69] Airtel acquired Visafone Communications Limited, and has been involved in several mergers and acquisitions arrangements.

[70] See Regulation 26, CPR, 2007

[71] Condition 13.2 of the Internet Service Licence states that the Licensee shall not be obliged to notify the Commission of any such change where the number of such shares, the control of which it is proposed to change when aggregated to the number of such shares the control of which has been changed at any time after the granting of this licence (whether or not the change has previously been notified to the Commission in accordance with the paragraph) does not exceed 10% of the total number of shares in the Licensee to which this condition applies.

[72] Regulation 27 (a – d), CPR 2007. In June 2026, the NCC issued a notice for prior regulatory approval on changes in shareholding/ownership structure of telecommunications companies, containing additional requirement that makes it mandatory for all telecommunications companies to obtain a Letter of No Objection from NCC in respect of any proposed transfer of ownership or control of shares amounting to ten percent (10%) or more of the total share capital, as well as any series of share transfers which in aggregate exceed ten percent (10%) of the total share capital of the Licensee. This requirement must be satisfied in order for the changes to be effected and registered with the CAC. The notice was issued pursuant to Section 90 of the NCA 2003, Regulation 28(2) of the CPR, 2007, and Regulation 42 of the Licensing Regulations, 2019, which collectively empower the NCC to oversee and review transactions affecting telecommunications companies and promote fair competition.

[73] Regulation 28(1), CPR 2007

[74] Regulation 28(2), CPR 2007

[75] Regulation 28(2) (a – e), CPR 2007.

[76] Regulation 29, CPR 2007.

[77] Regulation 30 (a – d), CPR 2007.

[78] Regulation 31, CPR 2007.

[79] Regulation 32, CPR 2007.

[80] Regulation 6 (a – e), CPR 2007.

[81] Regulation 7(b), CPR 2007.

[82] Regulation 7(c), CPR 2007.

[83] Regulation 18(2), CPR 2007.

[84] Regulation 18(2)(a), CPR 2007.

[85] Regulation 18(2)(b), CPR 2007.

[86] Regulation 18(2)(c ), CPR 2007.

[87] Regulation 18(2)(d), CPR 2007.

[88] Regulation 18(2)(e), CPR 2007.

[89] Regulation 18(2)(f), CPR 2007.

[90] See Schedule to the CPR 2007.

[91] See Schedule to the CPR 2007.

[92] See Paragraphs 1 to 9, Schedule to the CPR 2007.

[93] See Paragraphs 10 to 12, Schedule to the CPR 2007.

[94] Paragraph 1(a), Schedule to the CPR 2007.

[95] Paragraph 1(b), Schedule to the CPR 2007.

[96] Paragraph 2, Schedule to the CPR 2007.

[97] Paragraph 2, Schedule to the CPR 2007.

[98] Paragraph 3(a), Schedule to the CPR 2007.

[99] Paragraph 3(b), Schedule to the CPR 2007.

[100] Paragraph 4, Schedule to the CPR 2007.

[101] Paragraph 5(a), Schedule to the CPR 2007.

[102] Paragraph 5(a), Schedule to the CPR 2007.

[103] Paragraph 5(b), Schedule to the CPR 2007.

[104] Paragraph 5(b), Schedule to the CPR 2007.

[105] Paragraph 6, Schedule to the CPR 2007.

[106] Paragraph 7, Schedule to the CPR 2007.

[107] Paragraph 8, Schedule to the CPR 2007.

[108] Paragraph 9, Schedule to the CPR 2007.

[109] Paragraph 10(a), Schedule to the CPR 2007.

[110] Paragraph 10(b), Schedule to the CPR 2007.

[111] Paragraph 11, Schedule to the CPR 2007.

[112] Paragraph 11, Schedule to the CPR 2007.

[113] Paragraph 12, Schedule to the CPR 2007.

[114] Paragraph 13, Schedule to the CPR 2007.

[115] Paragraph 14, Schedule to the CPR 2007.

[116] Paragraph 15(1), Schedule to the CPR 2007.

[117] Paragraph 15(3), Schedule to the CPR 2007; See also Section 59 of the NCA, 2003 which provides that “an inquiry or a part of an inquiry of an inquiry may be conducted in private if the NCC is satisfied that the documents or information that may be given, or a matter that may arise during the inquiry or a part of the inquiry, is of a confidential nature or the inquiry or part of the inquiry or a matter, or part of a matter, in public would not be conducive to the due administration of the Act.”

[118] Paragraph 16, Schedule to the CPR 2007

[119] Paragraph 17, Schedule to the CPR 2007

[120] Paragraph 17 (a – e), Schedule to the CPR 2007

[121] Paragraph 18(1), Schedule to the CPR 2007

[122] Paragraph 18(2), Schedule to the CPR 2007

[123] Paragraph 18(3), Schedule to the CPR 2007

[124] Paragraph 18 (4), Schedule to the CPR 2007

[125] On March 28, 2025, the Investments and Securities Bill 2024, which repealed the Investment and Securities Act 2007, was signed into law by President Bola Ahmed Tinubu.

[126] See Section 357, ISA 2025.

[127] See Section 3(2)(a), ISA 2025.

[128] See Section 3(2)(c), ISA 2025.

[129] See Section 140(1) ISA 2025

[130] See Section 118(1), ISA 2007

[131] See Section 141(1), ISA 2025.

[132] See Section 141(1)(a), ISA 2025.

[133] See Section 141(1)(b), ISA 2025.

[134] See Section 141(2)(a – e), ISA 2025.

[135] See Section 144(1), ISA 2025.

[136] See Section 144(1), ISA 2025

[137] See the citation, FCCPA 2018

[138] Section 1(d), FCCPA 2018

[139] Section 17(a), FCCPA 2018

[140] Section 17(b), FCCPA 2018

[141] Section 17(c), FCCPA 2018

[142] Section 17(d), FCCPA 2018

[143] Section 17(g), FCCPA 2018

[144] Section 17(l), FCCPA 2018

[145] Section 17(s), FCCPA 2018

[146] Section 59(1), FCCPA 2018

[147] Section 60, FCCPA 2018

[148] Section 93(1), FCCPA 2018

[149] Section 92(4), FCCPA 2018

[150] Section 94(1)(a), FCCPA 2018

[151] Section 94(1)(a), FCCPA 2018

[152] Section 94(2)(b), FCCPA 2018

[153] Section 94(2)(c), FCCPA 2018

[154] Section 94(2)(d), FCCPA 2018

[155] Section 94(2)(e), FCCPA 2018

[156] Section 94(2)(f), FCCPA 2018

[157] Section 94(2)(g), FCCPA 2018

[158] Section 94(2)(h), FCCPA 2018

[159] Section 94(3)(a), FCCPA 2018

[160] Section 94(3)(b), FCCPA 2018; See also Section 94(4)(a – d), FCCPA 2018

[161] Section 95(1), FCCPA 2018

[162] Section 95(3), FCCPA 2018

[163] Section 95(3), FCCPA 2018

[164] Section 96(1), FCCPA 2018

[165] Section 96(2), FCCPA 2018

[166] Section 95(5), FCCPA 2018; See also Section 96(4), FCCPA 2018

[167] Section 99(1)(a), FCCPA 2018

[168] Section 99(1)(b), FCCPA 2018

[169] Section 99(1)(c), FCCPA 2018

[170] Section 99(1)(d), FCCPA 2018

[171] Cap. C20, Laws of the Federation of Nigeria, 2004

[172] The new CAMA was assented to on August 7, 2020 and came into force on January 1, 2021.