Tag: MTN

In 2015, the Nigerian Communications Commission (NCC) fined telecom giant MTN N1.04trillion on MTN Nigeria. The fine was reduced to N330 billion, which the firm must pay up next year. Part of the terms of settlement is the listing of MTN’s shares on the Nigeria Stock Exchange (NSE). NCC’s Executive Vice Chairman/CEO Prof Garba Umar Dambatta says the telco will be breaching the agreement if it fails to list on the Exchange. He speaks on other challenges facing the industry with ICT Editors in Abuja. LUCAS AJANAKU was there.

You are three years in the saddle; how would you assess broadband penetration in the country?

On assumption of office in 2015, we unveiled the eight-point agenda for the telecoms industry, among which is the broadband plan. We are keen on driving broadband penetration in the country. Before we came on board in 2015, there was a Presidential Broadband Committee set up by the Federal Government and the committee was jointly chaired by the former Executive Vice Chairman of the Commission, Dr. Earnest Ndukwe and Zenith Bank Chairman, Mr. Jim Ovia. The committee did a good job in coming up with a detailed five-year National Broadband Plan (NBP) from 2013-2018. On page nine of the NBP, it was stated that broadband penetration, as at 2012, was between four and six per cent and there were measures through which broadband penetration could be achieved. Achievement of broadband penetration is not the responsibility of NCC alone, but a combined responsibility of other agencies such as the National Information Technology Development Agency (NITDA), NigComSat, Galaxy Backbone, including critical stakeholders such as telecoms operators. They were all assigned roles in order to achieve faster broadband penetration

So, where are we?

The NBP stated that the country must achieve five-fold in broadband penetration, but this of course, depends on the minimum and maximum threshold. By multiplying four per cent minimum level of broadband by five, which represents the five years broadband plan, it will give 20 per cent minimum broadband target and by multiplying six per cent maximum broadband penetration as at 2012 by the five years broadband plan, it will give 30 per cent broadband penetration, which is maximum target at the end of 2018.

But Nigeria had surpassed the minimum target of 20 per cent last year; working towards achieving the maximum target of 30 per cent by the end of 2018, according to the NBP. As of today, Nigeria has achieved 22 per cent broadband penetration, and it is close to achieving the 30 per cent target. The achievement in broadband penetration gave rise to the first phase licencsing of Infrastructure Companies (InfraCos) to drive broadband infrastructure deployment that will enable broadband penetration. The licence was planned to cover the six geopolitical zones of the country, as well as Lagos that was mapped out as a zone for the purpose. MainOne was licensed to cover Lagos zone, iConnect, a subsidiary of HIS, was granted licence to cover the Northcentral zone. These two zones were licensed before I came on board as NCC’s EVC, and it was during my tenure that we licensed additional five zones. They include Northwest, Northeast, Southwest, Southeast and Southsouth. The beauty of the licence is that it is cheap because the NCC is not keen at making so much money in the  licences.

The NBP specified the roles of government agencies in achieving 30 per cent broadband penetrations by this year’s end.  Are we anywhere near this target?

Yes, all government agencies that are drafted to drive the broadband policy were given specific roles but I cannot speak for them on the extent to which they have accomplished their roles. However, I know that they are all party to the implementation of the broadband policy. NITDA, for instance, has the responsibility to drive capacity building, but NCC is the arrowhead among all other government agencies in driving broadband penetration and we have done so well to achieve over 70 out of the total 30 per cent maximum broadband target for Nigeria.

Are there challenges on the way of achieving this milestone?

Yes, there are national and regional challenges to broadband penetration. In these two broad areas of challenges, there are backbone infrastructure challenges as well as challenges of broadband access in underserved and unserved areas of the country. In the area of access, we have about 200 access gaps but through the efforts of the NCC, we have been able to reduce them to about 190 as of today. Nigerians living within the current 190 access gap areas are not experiencing telecoms services and this is a challenge we need to address as a country. To address the challenges, there is need for capacity building to leverage ICT to do greater things and in better ways. So, we need to sensitise the people and empower them with ICT tools that will make them achieve their dreams. NCC for instance, is pioneering the Advanced Digital Acquisition Programme (ADAP) for tertiary institutions, where we have the highest concentration of talented youths. By the time they acquire the skills, they will be able to develop ICT applications. NITDA is also involved in ICT training and skills acquisition through its sponsored scholarship programmes for students studying ICT related courses, up to doctorate level.

What is NCC doing about  interconnectivity which remains a teething problem?

The advisory committee set up by government to increase broadband access in the country is on course. The committee made up of four licencees of the NCC, namely IHS, MainOne, Phase3 Telecom and Broadbased Telecom, and supervised by Acting President Yemi Osinbajo, has deployed fibre cable in the country and the committee is planning to lay additional 18,000km fibre infrastructure to complement the already 40,000km on ground. This will further complement the 120,000km of fibre optic cable that the country needs to ensure maximum broadband connectivity that will address the country’s challenges of intra and inter broadband connectivity. Our plan is to make Nigeria a fibre connected nation across all its 774 local government areas. Every local government area in the country deserves to have broadband connectivity and this can be achieved through additional deployment of broadband infrastructure. So, we need targeted deployment across the country.

How far has NCC fared in consumer protection and empowerment?

We have great plans for consumer empowerment, hence its part of our 8-point Agenda. We went ahead to declare 2017 as the year of the consumer, because everybody in the country is a consumer of telecoms services, including myself. Nigerians welcomed the initiative and majority were able to activate the 2442 short code for Do Not Disturb (DND) initiative, designed to protect the consumers from unsolicited text messages, which was becoming an issue in the industry. From a little above one million activated DND, it has gone beyond 10 million since 2017. With the activation of the DND short code, consumers have powers in their hands to receive or reject messages. They can now reject messages they do not want and accept messages that they want. The number of complaints from subscribers has reduced because the NCC is responding fast to consumers’ concerns. Beyond that, NCC still engage consumers through the NCC organised consumer parliament and town hall meetings.

Delay in approving Right of Way (RoW) by state governments had always been an issue to contend with by carriers who are desirous to roll out services. What is NCC doing about this?

The NCC is in a conscious engagement with critical industry stakeholders on RoW issue. I mean critical industry stakeholders such as the National Economic Council (NEC) under the chairmanship of the vice president of the country, as well as the Nigerian government. I had in the past made presentations to the Nigerian Governor’s Forum, while engaging them on the issues of RoW.NEC had also discussed the issue and came up with a report on harmonised price of N145 per metre length in the laying of fibre optic cable for broadband deployment. No state and no local government is adhering to the NEC report on the harmonised RoW rate, and this is a serious challenge to industry growth and expansion, because state governments, Federal Government and their agencies are imposing high and arbitrary charges on RoW. Even at that, the NCC did not give up the struggle. At the last NEC meeting, there was a very important resolution that came out. The resolution was that the harmonised RoW rate of N145 per metre length of fibre cable must be charged as against the current high and arbitrary charges on RoW. This is a major achievement by the NCC, but we still have challenges of fibre cut during road constructions in most states and local governments. Again, we are engaging the states and local governments on the need to protect telecoms infrastructure during road constructions. We need a national telecoms infrastructure bill that will protect telecoms infrastructure across the country.

The Nigeria Labour Congress (NLC) has accused NCC of sabotaging its efforts in protecting the rights of workers, by giving tacit support to MTN. What is your reaction to this?

Our duty as telecoms regulator is to protect jobs in the telecoms sector and we jointly demonstrated that with the Central Bank of Nigeria (CBN), the financial regulator, in the case of 9mobile, when the banks were threatening to take over 9mobile because of its indebtedness to 13 local banks to the tune of $1.2 billion.

In the case of the NLC accusing us of aligning with MTN to short-change the country, it is not true. The NCC has not aligned with MTN in any way to short-change the country. We have a duty to protect telecoms investment and telecoms jobs in the country and we are already engaging the NLC on this. NCC will not in anyway, stop Nigerian workers from belonging to workers’ union.

Back to 9mobile sale; how soon would the telco be handed over to the preferred bidder?

The delay in the conclusion of the sales of 9mobile, and the possible handover of the telecoms company to Teleology Holdings Limited, the preferred bidder, could be attributed to several factors. First is about the accumulated debts owed by 9mobile, which must be cleared before handing it over to the preferred bidder.9mobile was owing the Commission over N15 billion in annual operating levy (AOL) and numbering fees, which must be cleared according to NCC rule before approval would be given by NCC for the sale of the telecoms company. 9mobile initially wrote the Commission, asking for the transfer of the shares of Emerging Markets Telecommunications Services (EMTS), now trading as 9mobile, to United Capital Trustees, the receiver-manager and the legal representative of the 13 local banks that lent money to Etisalat, now trading as 9mobile.9mobile was owing the Commission N12 billion AOL fees for 2016 and 2017, N1 billion for numbering fees for a period of two years, as well as spectrum fees of N2.3 billion.9mobile however paid 50 per cent of the total of the over N15 billion it was owing and NCC wrote an initial letter of ‘No Objection’ for the approval of the transfer of shares of EMTS to United Capital, as requested by 9mobile. Again, there was another request from 9mobile, asking NCC to transfer the shares from United Capital to Teleology, and we have to give them another condition before such transfer would be effected. The condition is that 9mobile must show NCC a clear evidence of the registration of Teleology with the Corporate Affairs Commission (CAC), among other conditions like the conclusion of the due diligence evaluation on Teleology by the NCC, to find out the technical capabilities of Teleology to effectively handle 9mobile.  A committee was set up to find out the technical capability of Teleology and its corporate governance structure. As soon as they meet the other conditions, we will again transmit the final approval letter of ‘No Rejection’ for transfer of shares from United Capital to Teleology. The evaluation report on Teleology will soon be made public and we are on course to conclude the process of the sales of 9mobile and we are assuring Nigerians that we will conclude the process if all conditions are met.

There was a similar issue where MTN bought over Visafone in January 2016, and Visafone later requested that it’s 800MHz spectrum licence be transferred to MTN. What is NCC’s position on transfer of spectrum licence?

Over a year ago, Visafone requested NCC to transfer its equity to MTN, following the acquisition of Visafone by MTN in 2015. They asked for 100 per cent transfer of shares from Visafone to MTN, and we granted them their request after all the conditions were met. Later it occurred to them that they did not request for the spectrum licence transfer, but the transfer of spectrum from one operator to another is not automatic because there are competition issues that must be addressed. We told them that the Commission is empowered by an Act to conduct public enquiry and invite all critical stakeholders including the media to discuss it, and we have done so recently. The outcome of that public enquiry will determine whether their second request on spectrum could be granted. We have concluded on the report of the public enquiry, we are only waiting to get the recommendation of department that conducted the public enquiry. We will surely look at the recommendation before approval will be given or denied.

There are issues of strange SIM card registration. What is NCC doing about this?

The SIM card registration has been concluded and the data uploaded into our dedicated database. Whatever is uploaded on SIM card registration into our database is still considered as raw data until treated as real data. There is a software that treats it and ascertain the credibility of the data. If after we apply the software, we identify anomalies, then we must impute the data again or send them back for proper registration. SIM card registration is key to addressing national security and we must address it as such. Nigerians must stop selling pre-registered SIM cards because it is an act of illegality that undermines national security.

The Federal Inland Revenue Service (FIRS) has complained that telcos were not remitting value added tax (VAT) to government. What is NCC’s take on this?

We are law abiding and we want all operators to be equally law abiding and pay their tax as andw when due. On this note, we have advised telcos to pay all outstanding VAT and all other taxes that were meant to be paid to government. We encourage FIRS to invoke appropriate sanctions where there is no compliance in payment of taxes. FIRS is a legal entity created by law and we will not interfere in the discharge of their duties. So, telecoms operators have obligation to pay their taxes.

The NCC indicted some operators involved in call masking and refilling, but experience show that the big telecoms operators are still involved in the act. How is NCC addressing this?

Call masking and refilling is one practice that NCC is doing everything possible to end because it is not only illegal, it also undermines national security. We have indicted and fined some operators that were involved in the practice and we are still investigating to get more of the operators that are secretly involved in the practice. However, our statistics shows that the rate of call masking, where operators deliberately hide the number details and identity of a caller, is on the decline, and we will not rest on our oars until we completely eradicate call masking from the system. We have established that the source of call masking is SIM Boxes—small electronic boxes with the capacity to receive and transmit voice and data signals. The boxes are portable and those involved in the illegal business, find it easy to move around with them and they are not in one location. Calls are supposed to be routed through Base Transceiver Stations (BTS) but the perpetrators bypass BTS to transmit data and voice signals from their mobile electronic boxes. Having identified the challenge, we need a technology solution that will be able to trace and track call masking across the country and block all such calls. We have since discovered that people are involved in call masking because of the differential in the cost of international termination rate and local termination rate. So, because local termination rate is cheaper, they tend to hide the numbers and details of international calls that are terminating in Nigeria and make it look as if such international number is a local number in order to pay local termination rate as against international termination rate that is higher.

Poor quality of service is still an issue despite the efforts of NCC. Can there be an end any time soon to this?

Limited telecoms infrastructure is a big challenge to service quality and Nigeria needs additional deployment of BTS to change the narrative. We need more deployment of telecoms infrastructure to provide the additional capacity that is needed to improve service quality. Other challenges include cable cuts, disruption in electricity supply among others. NCC has the ability and capacity to monitor quality of service across the country. We can use our Key Performance Indicators (KPIs) to identify areas of poor service quality and trace the operator involved in it and direct such operator to fix it up, but the challenge with operators is insufficient telecoms infrastructure. We have resolved to use the option of fine as the last resort to address poor service quality, but we must continue to monitor the networks and encourage deployment of additional telecoms infrastructure.

What is NCC doing about idle licences warehoused by some telcos?

NCC has introduced regulatory measure that encourages spectrum trading. It helps operators to trade their idle spectrum through leasing or transfers. The regulatory measure was put in place to prevent owners of spectrum from keeping to themselves, spectrum that is not in use. Spectrum licences are national resources that should not be kept unutilised. The NCC has the capacity to monitor the use of spectrum that we have assigned to operators and if we discover anyone that is not being used to provide telecoms services, we can invoke such licence. We call on all operators to take advantage of the framework put in place on spectrum trading, leasing, sharing or transfer. Nigeria is the only country that has such regulatory framework and I will be speaking about it in the next Mobile World Congress (MWC) in Barcelona, Spain. We will continue to provide proactive regulation, by taking appropriate steps before the challenge occurs.

What is NCC’s take on the loss of revenue to telecoms operators through Over the Top (OTT) technology service deployed by fintech operators?

I read and hear arguments about OTT service such as WhatsApp, Skype, Facebook, Instagram, among others, where the providers of such services ride on the network of traditional telecoms operators to deliver voice and data services to the people at no cost. Traditional telecoms operators who have invested heavily in their network, which the OTT service providers are utilising, have called for the regulation of OTT services, complaining that the service is eating deep into their revenue generation. The International Telecommunication Union (ITU) is still looking at the implications and the gains of OTT services to consumers and the operators and the NCC cannot act in isolation over OTT service delivery, which I think the consumers are enjoying because it is completely free of charge.But what the operators failed to say is the way OTT services stimulate demand for data. We have noticed tremendous increase in data usage for the past 12 months because people must buy data to access the free OTT services. Again, the operators will not say how the OTT service stimulates demand for network expansion, and this means making more money. Nigeria is on the global LTE map because of the huge use of data. LTE is the network of data associated with high speed data use. So, data usage has doubled in the country and operators are making money from the increased data usage. We know the challenge of the other side of the coin, where OTT service providers are riding on telecoms infrastructure that they did not invest in to provide free data and voice services. There is need to strike a balance and the ITU and the Commonwealth Telecommunication Organisation (CTO) are currently looking at it because it is a global issue, and developed countries like the US have not come up with any regulatory framework on OTT.

Investment in telecoms appears to be on decline. What could be responsible for this?

Foreign Direct Investment (FDI) into Nigeria in telecoms is still on the increase. I do not have the figure for 2017, but government is doing things to further boost FDI through the Executive Order on the ‘Ease of Doing Business’. Again, telecoms contribution to GDP is on the increase. We are making efforts to woo investors to come and invest in the telecoms sector of the country.

What is the current situation with interconnect debt among operators. Does an operator have the right to disconnect another operator for accumulated interconnect debts?

Today we see increase in the accumulation of interconnect debts among operators. Some operators are heavily indebted to others over interconnect termination fees, but our position is that those owing interconnect fees must pay such fees without further delay. Interconnect debt is made of two components: the facility and infrastructure components. When calls are terminated on other networks, the networks where the calls are terminated must be paid their termination fees.  NCC is worried about the accumulated huge debts from interconnectivity, which currently stand at over N165 billion. We have summoned the operators and advised them to pay up their interconnect debts promptly. But be that as it may, no operator can disconnect another operator on the ground of interconnect debt, except by the express permission from NCC. Disconnection will be a measure of last resort and cannot be done without the approval of NCC.

Listing shares on NSE was part of the settlement terms of the 2015 MTN fine. MTN is yet to be listed. What happens if it fails to list by 2019 when it will complete payment of the fine?

If MTN fails to list by 2019, that will be a breach of the settlement agreement that the NCC reached with the telecoms company. It was an agreement that was signed, sealed and delivered, so anything short of it will be breach of agreement. In terms of payment, MTN is meeting up with the payment agreement plan for installment-based payment. So far it has paid N165 billion, which is 50 per cent of the total fine of N330 billion. They are due to pay another N55 billion by December this year and will complete payment by 2019. The initial fine was N1.04 trillion, for failure to deactivate unregistered SIM cards from its network, but the fine was later reduced to N330 billion at the end of all negotiations.

Internet Service Providers (ISPs) are reducing in their numbers due to harsh market condition. What is NCC doing to resuscitate them?

We have seen distortions in the ISP market, especially where telecoms operators have diversified into offering internet services to their subscribers. The distortion is squeezing smaller operators out of market, but one way that could better address the distortion is to divide the market into wholesale and retail trading to separate the bigger operators from the smaller operators, but I do not know if the market is matured now for such separation. A time has however come for NCC to look at the situation and sensitise the market.