Xenophobia row exposes rivalry between South Africa and Nigeria

* South African anti-immigrant attacks kill 7 * Nigeria recalls top diplomat from South Africa * Nigeria, South Africa have long-standing rivalry * Two biggest economies key to Africa's success JOHANNESBURG The recall of Nigeria's top diplomat after a spate of xenophobic attacks in South Africa follows several similar spats that expose the two countries' deep rivalry for economic and political dominance in Africa. Nigeria's Acting High Commissioner to South Africa Martin Cobham said on Saturday he had been "invited" to Abuja to discuss this month's anti-immigrant attacks in South Africa, which have killed at least seven people. Televised images of armed gangs attacking immigrants and looting foreign-owned stores in Johannesburg have sparked a backlash in Nigeria, where hundreds protested in front of shops owned by South African brands like MTN and Shoprite. South Africa's foreign ministry on Sunday called Cobham's recall an "unfortunate and regrettable step", before taking a swipe at Abuja for its own record on protecting foreigners. Last September, a church hostel collapsed in Lagos, killing 115 people, most of them South African. Nigeria was criticised for its slow response to the disaster and what some saw as a haphazard rescue effort. "It would be curious for a sisterly country to want to exploit such a painful episode for whatever agenda," a foreign ministry statement said in response to Cobham's recall. "We did not blame the Nigerian government for the deaths and more than nine months' delay in the repatriation of the bodies of our fallen compatriots." Such tit-for-tat slights are becoming increasingly common. Weeks after the hostel collapse, South Africa seized $9.3 million from a private jet carrying two Nigerians, funds Abuja said were for a legitimate arms deal. South Africa said the deal was being conducted without relevant permits. Abuja accused South Africa of xenophobia when Nigerians were deported after staff at Johannesburg airport believed their yellow fever certificates were fake. Arik Air, Nigeria's biggest airline, briefly cancelled flights to South Africa. CANNIBALS Nigeria banned 2009 film "District 9", a hit movie directed by a South African that depicted Nigerians as cannibals, criminals and prostitutes who had sex with aliens. Rows over Hollywood movies and yellow fever certificates are reflective of a more serious battle for economic dominance and control over Africa's representation on the global stage. "It's no secret that Africa's would-be superpowers don't like each other very much," analyst Simon Allison wrote in a column in the Daily Maverick, a leading South African political online newspaper. "For all their lofty talk of unity and pan-Africanism, both Nigeria and South Africa are actually locked in a fierce struggle to be sub-Saharan Africa's pre-eminent superpower." Nigeria overtook South Africa as the continent's biggest economy last year after re-basing its GDP. Pretoria said the numbers reflected Nigeria's larger population and not the sophistication of their respective economies. "Despite what was said publicly, Nigeria's rebasing was resented by the South African government," a Pretoria-based Western diplomat told Reuters. Diplomats say that when South African politician Nkosazana Dlamini-Zuma, the ex-wife of President Jacob Zuma, won a close race to chair the African Union Commission in 2012, Nigeria strongly backed her opponent. Both countries are also lobbying for a permanent position to represent Africa on the United Nations Security Council. Given their political and economic heft -- together, the two economies are larger than the rest of sub-Saharan Africa's combined -- relations between South Africa and Nigeria could be decisive for the future of a continent of 1 billion people. "Nigeria and South Africa are like two prisoners in the same cell of poverty, inequality and bad leadership," Nigerian writer and political commentator Elnathan John told Reuters. "Together they could muster the strength to break their bonds and overpower the jailer but instead they spend time feuding with each other in a needlessly fractious relationship." By Joe Brock and Nqobile Dludla

NCC may issue new licences to lower mobile costs

While competition has caused the cost of mobile communications in many eastern and southern African countries to plummet, prices in Nigeria's telecom sector remain high and the country's regulators now say they may issue new telecom licenses in order to spur a more competitive market.

Nigeria is Africa's largest telecom market by investment and subscription. The cost of mobile communications has remained high, however, as operators are not competitive enough to fuel a price war.

The country has more than seven major operators -- including MTN, Bharti Airtel, Globacom, Mobile TV and Mobile Data Service -- with a combined customer base of about 90 million. But the providers are not competing enough to fuel the sort of stiff competition that will drive down prices, according to the Nigerian Communication Commission (NCC), the country's telecom sector regulator.

Due to lack of competition, most of Nigeria's remote rural areas still remain unconnected to mobile communication networks.

NCC Vice President Eugene Juawah said last week that because prices have not been coming down, the commission will bring in new operators by issuing more licenses. The NCC said it has no intentions of directly forcing operators to bring down prices, but that competition will force them to do so.

Like in many other African countries, the telecom sector is Nigeria's major economic driver after oil. The NCC believes new operators will bring competition that will force operators to expand networks to rural areas in search of new customers

Meanwhile, MTN, Bharti Airtel and Lap Green have all been able to grow their subscriber bases by slashing prices and giving subscribers free calling time of up to 15 minutes within the networks for fear of losing customers.

The whole West African region is now looking to see whether the NCC's move to license more operators will help increase competition and reduce high prices.