Category: e-Business

In 2013, quality of service (QoS) remained poor. Will it improve in 2014? To enhance service quality, the Nigerian Communications Commission (NCC) is set to license seven infrastructure providers (InfraCos) this year. LUCAS AJANAKU reports.

During the Yuletide, Chief Executive Officer, SO4 Engineering, Soji Oluwasuyi, used the short message service (SMS) platform to send seasons greetings to his well wishers and clients. In a clime where the advent of the global system for mobile communication (GSM) has almost sent greeting card sellers out of business, he had diligently chosen his words to convey the depth of his gratitude to his clients for standing by him during the year and hoping for a better relationship in years to come.

Two days after the New Year, he discovered that most of those beautifully crafted were not delivered and money was deducted for each of them. He was able to discover this because he had activated the Delivery Report function on his phone. He was angry. “All my clients will now see me as one ungrateful wretch,” he lamented.

It could only be imagined how many of the over 120 million active mobile phone subscribers in the country would have taken their time to activate the Delivery Report function on their phone, especially in a country where 35 million of the adult population are said to be illiterate. Nigeria is one of the countries that account for more than 50 per cent of global population but with the highest number of illiterates. These countries are referred to as E-9 countries, according to the United Nations Educational, Scientific and Cultural Organisation (UNESCO).

Oluwasuyi is not alone. A civil servant who identified herself simply as Esther had a similar story to tell. So were millions of others who could neither make calls nor send SMS because of congestion of the network.

“We want an improved network. That is the only way we could get the value of the money we spend daily on recharge cards,” they said.

Worried by poor telecoms service quality, the Federal Government, through the Ministry of Communications Technology, the Nigerian Communications Commission (NCC) and the Consumer Protection Council (CPC) came together towards the end of last year to tackle the issue. While the government said it will institute legal proceedings against erring operators, NCC promised a return to a stiffer regulatory regime. CPC reiterated its ability to commit any operator found to be cheating consumers to a minimum of five years jail term.

The regulator also promised to revert to the suspended key performance indicators (KPIs) it drew up with the consent of the operators, adding that it had to lower the KPIs following appeals by the operators after fines were imposed on them last year.

If this alliance is consummated and not treated as one of those “fire brigade approaches” to solving national problems, it is expected that a tougher regulatory environment will be put in place in the new year in the interest of the subscribers.

Juwah said the bill for an Act to criminalise wilful vandalism of telecoms infrastructure will be passed by the National Assembly. The bill is seeking to classify telecoms infrastructure as Critical National Infrastructure and prescribe harsher punitive measures to people apprehended in the course of vandalising the infrastructure.

It is however not clear what position the bill is in the National Assembly as both the Senate and the House of Representatives gave contadictory views on the necessity of the bill. While the Upper Legislative chamber said such a bill is unnecessary, the Lower House said it has scaled the initial hurdles.

Operators argue that vandalism takes a terrific toll on their expenditure as fibre optic cables (OFC), base transmission stations (BTS) are vandalised at will. This, they say stops the provision of superior service quality.

If the legislators get their acts together and pass the bill, sector anlysts say the spate of vandalism to telecoms infrastructure will reduce while subscribers will get the full value for the money spent on recharge cards.

Also, the twin-menace of multiple taxation/regulation are being addressed by the Federal Government at bothe The Presidency and the Federal Executive Council (FEC). Towards the end of last year, a light finally appeared at the dark end of the tunnel when the Minister of Communications Technology, Mrs Omobola Johnson, announced a major breakthrough in government’s efforts at addressing the problem. The Lagos State government blazed the trail, acceding to a number of concessions that will allow operators take steps that will make subscribers in Lagos enjoy quality services.

The deal will remove all the constraints to installation, rollout and deployment of base transmission stations (BTS) and OFC in the state.

Mrs Johnson and the Governor of Lagos State Babatunde Raji Fashola (SAN) with some officials of Association of Licensed Telecoms Operators of Nigeria (ALTON) struck a deal on charges, levies, multiple taxation, harassment and forceful closure of BTS.

After a closed door meeting at the State House, the issues of multiple taxes, levies, decommissioned BTS and Right of Way (RoW) fees, factors which the operators say have been mitigating against quality of service in the state were addressed dispassionately.

The governor said: “We need you to roll out probably more than you need it but we do not need it at the expense of our roads, or lives of the people. Infrastructure must be built to very high standards, for example, masts must be built with galvanised steel and not hollow pipes to prevent them from collapsing. You may find that sites that may have been decommissioned by UFRU probably did not meet these standards or had not paid up their levies. When badly built sites collapse, it is we who are left to pick up the pieces.”

Telcos agreed with the governor and said there should be a standardised approach for excavating roads where no ducts existed. However, they said there were no telecoms masts in the state constructed with hollow piles, insisting that all telecoms masts built in the state by their members were built with galvanised steel.

Commissioner for Science and Technology, Mr Fatai Mabadeje said Lagos had acquiesced to a reduction in taxes and levies in the state by over 40 per cent while RoW Fees were reduced from N3000 to N500, a reduction of over 85 per cent.

He said this was however on condition that operators agreed to use approved and qualified contractors that would restore the integrity of the road after the installation of the OFC in the event that there was no fibre duct on the road.

Operators also agreed to a ‘dig once’ policy whereby the first operator to dig the road for fibre installation would install a duct with spare capacity for other operators to use when they wanted to install fibre instead of digging up the road again.

Sector analysts say government should capitalise on the success recorded in Lagos State and persuade other state governors to stop taking steps that will keep wideing the digital divide.

Other major issues expected to shape the industry this year are:

 

Strengthening of MNP

 

The mobile number portability scheme (MNP) introduced early last year by the NCC is expected to be strenghthened to be more effective.

NCC Executive Vice Chairman (EVC), Dr. Eugene Juwah said MNP would give absolute freedom to subscribers to dump inefficient service providers.

Director, Regulatory Affairs at Etisalat, Ibrahim Dikko agrees no less. He added that the initiative has put pressure on the operators to sit up, thus challenging their drive for innovation and customer-centric services.

Though well intentioned, complaints such as refusal of the would-be donor network to let go intending subscribers, inability of subscribers to use MNP owing to cumbersome porting process, length of porting time and the 90-day mandatory time subscribers have to remain on the recipient network have continued to dog the launch of the scheme in the country.

According to the Director, Customer Care at Globacom, Maria Svensson, about 50,000 subscribers have made use of MNP since it introduction, lamenting that the fate of post-paid subscribers intending to leave a network is another challenge facing the scheme.

Chief Operating Officer, Interconnect Clearing House Nigeria Limited, Uche Onwudiwe, also agrees that there are rough edges that needed to be smoothened. Onwudiwe, who did not rule out the tendency of operators resisting the urge of releasing subscribers intending to port out of their networks, lamented that “the numbers (of subscribers that have used the platform) are not there.”

Director, Public Affairs, NCC Tony Ojobo said it is not the total number of subscribers that port that is important but the realisation by the operators that subscribers have the power to dump them puts operators on their toes. He said MNP has ushered in an era of massive investment in the network upgrade.

 

Auctioning of 2.3GHz spectrum

 

While internet service providers (ISPs) have been rooting for the 2.3 gigahertz (GHz) spectrum, the NCC said it will put it on auction.

One of the ISPs, who spoke with The Nation at a forum organised for the spectrum, said the ISPs were ready to pay for it, adding that allowing them to have it will boost their ability to offer superior services using the latest technology in town.

“The new year will usher in the auction of frequency in the 2.3Ghz band. We shall do this in our tradition of transparency and all those who have expressed interest will soon be invited,” Juwah said.

 

Licensing of InfraCos

 

The NCC promises to license broadband infrastructure providers in the country. Called InfraCos, under its Open Access Model, the regulator said seven firm would be licensed to provide services in the six geopolitical zones, while one will serve Lagos.

According to the regulator, the existence of two vertical operators in that segment led to prohibitive pricing. Juwah said the commission had divided broadband provisioning into passive, wholesale and retail, adding that subsidy will be provided for some of the licensed operators.

But operators have kicked against the regulator’s subsidy promise, warning that it may hurt the sector. Telecoms operators in the country, acting under the aegis of the Association of Telecoms Companies of Nigeria (ATCON), have called on the NCC to first carry out the industry impact assessment of the broadband policy, warning that it may bring undesirable results.

Its President, Lanre Ajayi, recalled that a similar policy of the regulator few years ago, though good intentioned, led to the depletion in the membership of ISPs in the country.

He said whenever a project is to be implemented, the first step is undertaking its environmental impact assessment (EIA), the result of which guides the people implementing the project.

Thus, Ajayi said the NCC should undertake the impact assessment of the broadband policy on the operators so that it does not muscle existing service providers in the segment of the industry. He said there are usually a point of difference between the ‘good’ intentions of government and the backlash of the intentions.

According to him, a NCC policy a few years ago that stopped ISPs from operating at a particular band depleted the number of players in the industry from 92 to less than 30, adding that the policy may also have similar ripple effect in the industry.

“Have we done the socio-economic impact assessment the policy? I think we should do the socio economic impact of the policy before we jump into its implementation,” Ajayi warned.

A stakeholder, who spoke on condition of anonymity, lamented that it will be unfair for the NCC to spend tax payers’ money on private businesses when the trend everywhere in the world is government providing infrastructure and allowing enterpreneurs to invest their money.

“When you deploy public funds to serve a private investor, such funds will be used to have undue advantage over other players in the industry. It is even anachronistic to do that now. Government has no business in doing business. What we expect the NCC to do is to provide a level-playing field for every player through fair regulation. Providing public funds to any player in the industry under any guise will surely hurt the industry,” he said.

But the EVC said there was nothing esoteric about government offering subsidy to investors, arguing that the earliest providers of mobile telephone services enjoyed tax holidays of about five years, adding that even after the expiration of the five years, some of them were not ready to pay.

Juwah said since the project for which subsidy was being provided was for the good of the public, there was nothing unusual with providing such an incentive, insisting that fears of the players in the segment were baseless. Juwah even said he would have been shocked if current industry players in the industry did not kick.

What was the major highlight in the telecom sector in 2013? Many observers believe that it was the introduction of the mobile number portibility (MNP) under which subscribers retained their numbers while moving to other networks. Vandalism and quality of service remained challenges in the past year, reports Lucas Ajanaku

Minister of Communications Technology Mrs Omobola Johnson set the tone of what to expect in the telecoms sector during the year.

“I think 2013 is going to be our watershed year. I was sworn in July 2011. It was a new ministry without budget for months. I can say late 2011 into 2012, we were planning and strategising for the ministry.

“What you are seeing are the logistics of 2011 that are coming to the fore. You will recall that we have launched so many initiatives-the student computer ownership; tech launch pad, among others,” Mrs Johnson said.

Quite a number of initiatives were undertaken during the year by the Communications Technology Ministry, the regulator and operators to grow the sector and improve its contribution to the nation’s gross domestic product (GDP).

MNP/SIM reg

The Nigerian Communications Commission (NCC) kicked off the implementation of the mobile number portability (MNP) scheme, saying the development would give subscribers complete freedom to choose which service provider to use.

Executive Vice Chairman and Chief Executive Officer of the NCC, Dr Eugene Juwah, said the introduction of MNP was in furtherance of the commission’s vision of providing not only access to telecommunication services at affordable cost but also to continue to provide the required stimulus and appropriate environment for the introduction of innovative services that will impact on quality of telecommunication service delivery.

The NCC also disclosed that ongoing national registration of Subscriber Identity Module (SIM) card that kicked off in the country on February 28, 2011 ended with the commencement of the scheme.

“SIM card registration will come to an end very soon. We are collating data from the operators (and the agents commissioned by the NCC),” the EVC said, adding that data submitted to the commission by the operators and the agents its commissioned to carry out the exercise will be collated and treated.

Hesaid: “The vision of the commission is not only to provide access to telecommunication services to Nigerians at affordable cost but to also to continue to provide the required stimulus and appropriate environment for the introduction of innovative services that will impact on quality telecoms service delivery.

“Our mobile subscriber numbers have become our identity and in most cases, we are required to provide our mobile (telephone) numbers while filling out forms in opening bank accounts, making hotel and airline bookings.

“With the launch of MNP today, consumers of telecommunications services will no longer need to acquire new numbers in order to move from one network service provider to another. They will simply take along their existing numbers along with them to any network of their choice. The power and freedom of choice will henceforth rest with the consumer. If a consumer is dissatisfied with the quality of services being provided by a service provider, s/he can simply port out of that network to any network of his/her choice without losing his/her subscriber number.”

Launch of Broadband Plan

Amid pomp and celebration, the Federal Government launched its roadmap for deepening broadband penetration in the country.

Christened Nigeria’s National Broadband Plan (NNBP) 2013-2018, the 105-page document set ambitious targets for broadband growth in the country because of the multiplier effects affordable, fast and ubiquitous internet access could impact on the various segments of the economy.

The NNBP defines broadband as an internet experience where the user can access the most demanding content in real time at a minimum speed of 1.5 megabytes per second (MBPS).

Director, Regulatory Affairs, Airtel Nigeria, Osondu Nwokoro said at six per cent broadband penetration presently, there is both a challenge and an opportunity to meet the goal of realising a five-fold increase in broadband penetration by 2017.

The Broadband Commission for Digital Development said: “Access to broadband infrastructure and services must therefore be a top policy priority for countries around the globe, developed and developing alike as well as least developed countries.” It, therefore, urged “governments and business to work together to develop innovative policy frameworks, business models and financing arrangements needed to facilitate growth in access to broadband worldwide.”

According to the ambitious targets of the NBP, fixed broadband targets for cities (which is currently standing at 1.5per cent) is expected to go up to 10 per cent in 2015 in the short term, 16 per cent medium term of 2018 and long term target of 25 per cent by 2020. Penetration level which stands at 0.5per cent, will move up gradually to 3.3 per cent, 5.3 per cent and 8.3 per cent respectively

For national broadband targets, current level is 35 per cent while short term target is 60 per cent (2015). For medium term (2018), 80 per cent is targeted while 95 per cent is targeted by 2020 as long term target.

Launch of Open Access Broadband Model

NCC unveiled the open access broadband model last the year. Under the model, the regulator said it will license seven operators it called InfraCos. One InfraCo will operate in each of the six geo-political zones of the country while one will serve Lagos.

Juwah said based on the business models of the InfraCos, they will get subsidy from the Federal Government to boost their operations in the country. This promise by the regulator has drawn the ire of existing operators in the segment who argue, and rightly so, that arming private operators with public funds to compete in a liberalised space will confer undue advantage on the InfraCos. But the NCC has stuck to its guns, arguing that it was in best interest of majority of the citizens.

Emergence of ‘Dominant operators’

MTN Nigeria and Glo emerged ‘dominant operators.’ While MTN emerged dominant in the voice segment, it shared the position of dominant operatorship with Glo in the Wholesale Leased Lines and Transmission.

NCC said its industry review showed that phone calls between MTN customers cost three times lower than calls to other networks, saying: “This is indicative of the likely establishment of a calling club for MTN subscribers.”

MTN, which has about 44 per cent of the market, must cut the difference in price and face further scrutiny to ensure the competitive landscape is even for all operators, the NCC insisted.

MTN and Globacom were found to “jointly control about 62 per cent of the public terrestrial transmission infrastructure,” raising concerns they may “squeeze the margins of their competitors who are also their customers.”

“As a result of the determination outlined above, the Commission has resolved that the Dominant Operator in the mobile voice market shall be required to adhere to the following obligations:

“Accounting Separation: The Commission will immediately enforce and implement Accounting Separation on the dominant operator

“Collapse of on net and off net retail tariffs: The differential between the on–net and off net retail tariffs will be immediately collapsed. The tariff for on net and offnet will be the same, and subject to periodic review.

“ Submission of Required Details: The Commission may require the dominant operator to submit details on specific aspects of its operations from time to time as the need arises,” NCC explained, adding that the Commission shall make a determination of pricing principle to address the rate charges for on-net and off-net calls for all other operators

On the Wholesale Leased Lines and Transmission jointly dominated by MTN and Glo, NCC said it will impose price cap/price floor for wholesale services and price floor for retail services which shall be subject to periodic review, adding it will also “immediately enforce and implement accounting separation on the joint dominant operator.”

The regulator added that it may require any of the joint dominant operators to submit details on specific aspects of the operations from time to time as the need arises.

“The determination shall take effect from 1st May 2013 and remain valid and binding on licensees for the services specified in relevant market segment of this sector until further reviewed by the commission,” the NCC concluded. It is however not clear if the NCC’s directives were complied with by the affected operators.

Hosting of CTO

NCC hosted the 53rd Council Meeting and 11th Annual Commonwealth Telecommunications Organisation (CTO) Forum in Abuja.

The event came on the heels of the launch of the NNBP. Mrs Johnson and Juwah said the nation will leverage on the event to implement the plan.

Secretary-General, CTO, Prof Tim Unwien, said the organisation will assist the Federal Government to make broadband availability a commonplace in the country.

According to him, the availability of broadband will make a lot of difference in the socio-economic lives of the people of Nigeria. He said broadband availability will make quality education a given phenomenon in the country and commended the Federal Government for rolling out the NNBP which will chart a way for the future of the country.

He said: “Australia created a national broadband network because the private sector alone could not do it reaching everybody. That is a key point I would like to emphasise. There is need to ensure that all our people have access to broadband because otherwise we are going to get low quality lives in our society which ultimately will impede economic growth and development, so the question is getting the balance right between fixed and mobile broadband.

“Government and regulators face huge task in actually enabling those solutions to be put in place.

“The private sector will take profit where it can and the challenge regulators have is ensuring that everybody has access because if they don’t, that will lead to a disconnect.”

Conference of African Regulators

The NCC also hosted the maiden edition of the Conference of African Telecoms Regulators on Consumer Affairs in Lagos. NCC tasked regulators across the continent to make the subscribers the cornerstone of regulation, arguing that as the final consumer of telecoms services, consumers deserve quality services.

Juwah said though the potential for growth in the telecoms sector on the continent is huge, the growth and the shift of emphasis from licensing to other obligations like consumer protection has increased both the scope and complexity of regulating telecommunications.

He said further growth envisaged in the telecoms sector could only be achieved if regulators across the continent come together and cross-pollinate ideas on how to deliver better regulations that will give the consumers a pride of place.

“In doing so, I would like to propose that we closely examine some consumer issues peculiar not only to Nigeria but also to some other African countries. These issues are consumer care and quality of service; physically challenged persons and services provisioning; promotion and lottery; dispute resolution; monitoring compliance; enhancing consumer awareness through information dissemination and education; consumer data protection; and consumer rights.”

Juwah told regulators and representatives of telecommunications authorities from over a dozen African countries that NCC has come up with several well-thought out policies and intervention mechanisms deliberately instituted to grow the industry while protecting, informing and educating (PIE) the consumers.

ZTE completes security for police

Chinese security and telecoms equipment vendor, ZTE during the year, completed and handed over the $470 million National Public Security Communications System (NPSCS) to the Nigeria Police. NPSCS project is a multi-faceted high tech infrastructure for e-policing and public safety built for the country by ZTE. It is designed to enhance the capacity of the police to fight crime. Inspector General of Police (IGP), Mohammed Dahiru Abubakar, acknowledged this during an official visit by the Chairman of the National People’s Congress (NPC) of the People’s Republic of China, Zhang Dejiang, to the main switch centre of the NPSCS at Abuja.

The initiative was applauded by stakeholders because it will assist in crime detection through the deployment of information technology (IT) tools.

Deputy Managing Director, ZTE Nigeria Limited, Brielle Gao, said the facility was specifically built for Nigeria, adding that its capacity is scalable to serve the whole country. She said what other states needed to do was not building an entirely new security infrastructure but keying into what ZTE has done for the Police. Installation of metropolitan close circuit Tvs is part of the project which the Chinese firm handed over to the government.

Quality of Service brouhaha

Quality of services (QoS) became an issue in the country as service quality plummeted in the wake of preparations for the Yuletide.

Juwah warned operators that it no longer shall be business as usual as the regulator was prepared to wield the big stick. He said the regulator had earlier pandered to the whims and caprices of the operators by lowering the key performance indicators KPIs. While the operators kept passing KPI tests on their networks, subscribers kept gnashing their teeth as they paid for services not rendered.

Worried by this development, a tripartite agreement was struck by the Ministry of Communications Technology, NCC and the Consumer Protection Council (CPC) on the way forward. While the CPC said it had the powers within the law establishing it to commit erring operators to jail, the Federal Government said it will institute legal proceedings against erring operators. NCC too promised not to spare the rod any longer.

Foreign Direct Investment

Services providers brought additional foreign direct investments (FDIs) to the sector that grew total FDIs to about $36 billion. The last official total investment figure of $25billion was released by the NCC in 2012.

While Etisalat announced $1.2 billion, Airtel unveiled $1.5 billion. Glo and MTN unveiled $1.25 billion and $3 billion respectively. These investments have unfortunately failed to lift the subscribers out of the woods as QoS continued to be a major concern.

To underscore the magnitude of the losses to low QoS, CEO of Back-Up Network, Mr. Monday Ogbe, said Nigeria losses N2billion daily and N730billion annually to poor QoS.

At the peak of its frustration over the issue, the National Association of Telecoms Subscribers (NATCOMS), on behalf of the subscribers, filed a matter in court demanding compensation to subscribers.

While the matter awaits the decision of the wise men of the temple of justice, operators say a raft of attacks on base transmission stations (BTS), bureaucracy in the grant of right of way (RoW), multiple regulation/taxation, vandalism of optic fiber cables (OFC), insecurity and huge operating expenditure (Opex) incurred on generation electricity remain obstacles to quality service provision.

“Let the government go and impose fines. There is no miracle. The factors inhibiting good quality services are here with us. Let the government do what it needed to do. The security situation in the country remains frightening. Government is a form of social contract. Let the government perform its constitutional role of providing security to lives and properties, secure the investment climate and see what will happen. If you want to come to equity, you must go with clean hands,” a stakeholder in the industry said.