The Nation Newspaper

Tag: Operators

  • Subscribers’ gain, operators’ loss

    Subscribers’ gain, operators’ loss

    Telecom operators used to charge subscribers exorbitantly for off-net short message service (SMS). Now the Nigerian Communications Commission (NCC) has pegged the price at N4. Subscribers are happy, operators are licking their wounds. LUCAS AJANAKU reports

     •NCC pegs sms price at N4

    Many did not believe it when they first saw the message, which came from their service providers. Before now, they had paid through their nose for sending messages. Then came the message placing a ceiling on the charge for short message service, popularly known as SMS.

    When Kehinde Albert heard about the slash in the price of off-net SMS through his service provider, his initial reaction was that of disbelief. “I saw the message of capping of off-net SMS price on my phone. I thought it was one of the gimmicks these service providers play to get customers. So, I ignored it and moved on. But I was surprised that subsequent text messages sent attracted N4. This is a good development from the NCC. It should move a little further by ensuring that service quality improves,” he said.

    For Wale Olaogun, secretary, Community Development Committee (CDC), Alimosho Local Government Area, his problem is that he had to pay twice for sending SMS even after the announcement of the slash by the government. “Immediately, I sent the first text, I noticed a debit of N4 before the message was sent; few seconds later, another debit for same amount. To make sure I wasn’t seeing double, I decided to confirm the balance after each message,” he recounted in a letter to The Nation, insisting that he was ripped off.

    Deolu Ognbanjo, president, National Association of Telecoms Subscribers (NATCOMS), commended the NCC, arguing that with the directive, on-net SMS that used to attract N5 should now be reduced to N1 preparatory to eventual removal of payment for SMS. “We welcome the development. Since on-net SMS attracts 50 per cent of off-net charges, the operators should reduce on-net SMS to N1 per SMS,” he told The Nation.

    The NCC recently set a price cap of N4 per every SMS for all domestic off-net messages with effect from February 5, 2013. Before the NCC directive, it used to cost between N9 and N10 depending on the operator. No cap was placed on international SMS as demanded by the operators because interconnect rates for international SMS are determined by extraneous factors as they are terminated through carrier service providers in various jurisdictions.

    the Association of Licensed Telecommunications Companies of Nigeria (ALTON), the umbrella body of telecoms operators in the country, said the new price cap has become the last straw that will break the SMS camel’s back, saying it is not a good deal for the operators.

    It president Gbenga Adebayo, said the new price cap is not profitable for the telcos, lamenting that a situation where the NCC indulges in micro-managing commercial venture was not in the best interest of the industry.

    He said the NCC directive would push a lot of small and medium businesses out of the industry, adding that most of them have entered into contractual agreement with the service providers before the regulator’s directive.

    “SMS traffic over the last two or three years when Blackberry messenger and WhatsApp introduced free internet-based messages, which became popular, has dwindled. So, this last straw that the NCC has thrown is just to kill SMS business for service providers because there is meagre revenue from there. Few people use SMS and NCC is placing a N4 price cap on it. It is very bad for our business.

    “Other than operators, there other value adding providers who buy bulk SMS and resell. This kind of directive would kill this business segment. A lot of them have contracts with the operators, which are long-term contracts,” the ALTON boss said.

    ALTON’s fears may not be funfounded. According to a report by Ovum, by next year, telecoms carriers globally would lose $54 billion accruing from the use of SMS due to the increasing popularity of social messaging services – messaging within social networks – on smartphones.

    Aside Blackberry, WhatsApp, one of the more prominent social messaging brands, has seen its levels of penetration increase in Nigeria, Singapore and the Netherlands. Ovum said this level of growth would continue as smartphone and mobile broadband penetration increases, and expects smaller players, such as textPlus, Pinterest, and Fring to cause further disruption in the messaging space.

    He noted that the figure is more than double the $23 billion they are expected to have lost by the end of last year, adding that collaboration with handset manufacturers is imperative if operators are to remain relevant and competitive in the instant messaging industry.

    The new report, which addresses how operators can counteract the social messaging threat from over-the-top (OTT) players, also highlighted the rapid increase in the number of such players, and demonstrates that social messaging is not a short-term trend, but a shift in communication patterns.

    Said Neha Dharia, “Social messaging is becoming more pervasive, and operators are coming under increased pressure to drive revenues from the messaging component of their communications businesses.

    “Operators need to understand the impact of social messaging apps on consumer behaviour, both in terms of changing communication patterns and the impact on SMS revenues, and offer services to suit. OTT players are changing consumers’ messaging preferences, and the pressure they are exerting on operators’ messaging services is forcing them to offer increased SMS bundles and to experiment with messaging pricing models, further dampening revenue growth,” says Dharia.

    According to Ovum, the importance of collaboration cannot be underestimated as operators look to a Rich Communication Suite (RCS) platform to provide consumers with features such as file sharing, video calls, and internet protocol (IP)-based messaging. But RCS is not expected to reach the mass market before 2014, so for the time being operators will have to rely on innovative pricing strategies, partnerships, and launching operator-branded IP messaging services to keep up with the changing demand.

    “To take advantage of RCS when the time comes, operators will have to have a strong market presence. This means that they need to move to social messaging now in order to make sure OTT players are not in a better position to take advantage of future opportunities,” says Dharia.

    But the Director, Legal and Regulatory Services of NCC, Ms. Josephine Amuwa, disagrees. She said the decision was taken after evaluating and analysing SMS traffic information provided by the operators. “There was a recognition that the cost of SMS is too high, especially in view of the inter-connection rate of N1.02 for SMS as determined by the Commission in 2009.”

    Ms. Amuwa said based on these considerations, and in the interest of striking a balance between sustaining operator’s profitability and ensuring consumer satisfaction, and also in accordance with the powers conferred on the Commission under Sections 4 and Chapter V11 of the Nigerian Communications Act, 2003, it took the decision to set the price cap which “shall be implemented within 30 days from the date of the directive.”

  • Operators get new deadline on N1t target

    INSURANCE operators have up to 2017 to realise the N1 trillion target set for them, the Commissioner for Insurance, Fola Daniel, has said.

    He spoke at a briefing in Lagos.

    Daniel said: “Our people don’t trust insurance. We’ve done a considerable amount of housekeeping to make sure the companies respect the rules,” adding that the value of insurance contracts would rise from N300billion to about N1 trillion ($6.4 billion) in four years

    He said the industry would contribute about three per cent to the Gross Domestic Product (GDP), while insurance penetration would increase to 22.5 per cent from 10 per cent.

    He said compulsory motor-vehicle insurance, which makes up most contracts, would hit about 10 per cent by 2017; life insurance would constitute seven per cent, general business insurance, three per cent and petroleum companies’ insurance, 2.5 per cent.

    Daniel said oil and gas businesses would continue to contract international companies to insure their Nigerian operations as the capacity of local insurers is still limited.

    But Managing Director, Riskguard Africa Nigeria Limited Yemi Soladoye, said the industry failed to realise the target because of its inability to start the implementation of the Market Development and Restructuring Initiative (MDRI) in 2009, which was designed to prop up the projection.

    He told The Nation that the projection was part of the industry’s four-year strategic plan, adding that there was no way the target would have been achieved with the take-off of the implementation.

    On the expection from the insurance industry in the new financial year, the Riskguard chief said Nigerians need protection from insurers, adding that it is the duty of insurance companies.

    He said insurance companies are not living up to expectations as they have not been able to provide adequate protection to the public.

    He said: ”To me, it is a national duty that insurance companies should give us financial protection in this country, but that is lacking.”

    He said the industry has not been able to meet the needs of the public. He frowned at the performance of the industry, adding that what the industry records is minimal.

    He said: “We do not have what I would call real insurance companies in Nigeria. What we have are small firms. What the industry writes as annual premium income is not up to a premium that a branch or agency of a company writes in a normal insurance setting.

    ‘’For example, look out the results of Fortune 500, American Insurance Group (AIG) and more. These are companies that are generating about $250 billion premium each year. Convert that to naira, it is about N4 trillion.

    “Two years ago, an analysis was done on the 500 biggest companies in Africa; looking at the insurance companies on the report, there were 20, and none is from Nigeria. So, we are not there.

    ‘’A small country like Mauritius, with a population of 1.2 million generates 60 per cent of the premium income of Nigeria.”

    He said when the right things are done and operators have the vision to create a big customers service-oriented company, the industry would take its rightful place.

  • NCRIB to check fake operators

    NCRIB to check fake operators

    The Nigerian Council of Registered Insurance Brokers (NCRIB) is taking steps to sanitise the sector, The Nation has learnt.

    Its National President, Mrs Laide Osijo, said the Council would send the list of genuine brokerage firms to clients to check fake operators.

    She said the council would also close registration for members on March 31, adding that by the first week of April, the list of members would be published.

    She said: “Our rule states that we should publish the list of members every year. I must not forget to commend the effort of the Commissioner for Insurance for his efforts in promoting the affairs of the council.

    “Our law says that registration with NCRIB is a requirement for licensing by NAICOM. Before this year, so many brokers have been going to NAICOM for registration, but since the beginning of this year, NAICOM has refused to give anybody licence if they did not have the NCRIB registration certificate. The Commissioner and his team have been doing a good job to ensure people comply with the rules.”

    The Council chief also said: “If a firm has a new chief executive, the person has to come to the council for us to check if he is fit to run the organisation. This is because the new executive would be held liable for anything that happened in the firm.

    “If an organisation changes its executive, it has to write to us and we would give it six months to present the executive for examination. If an operator failed to meet up with his financial obligations, his membership will lapse, that is also what NAICOM is doing.”

    She said members have been told to renew their membership before March 31, to avoid being sanctioned.

    On the proliferation of brokerage firms, the president said some of them were established to secure a particular business..

    She said the council has observed that some people just register a brokerage firm because they wanted to secure a business through their relatives, who can assist them.

    She noted that these individuals abandon the firms once they get the business. She added that some of the brokerage firms were also established because people wanted to be known as managing director.

    She said: “Instead of 10 people joining hands to form a strong firm, they want to be managing directors. We have always encouraged mergers and acquisition. If you have a formidable team, it is better than being alone.”

    She noted that the council is collaborating with the National Insurance Commission (NAICOM) to ensure that only genuine operators and professionals operate in the sector, adding that at the monent the council has to give approval before a firm is licensed by NAICOM.

    “The NCRIB law says that registration with NCRIB is requirement for licensing by NAICOM. Prior to last year, so many brokers do go to NAICOM, for registration but from last year, NAICOM has refused to give anybody licence if they did not have the NCRIB registration certificate. The Commissioner and his team have been doing a good job to ensure people comply with the rules,” she said.

    Stakeholders said any step taken by the council to sanitise the sector is welcome, adding that it would help curb unethical practices and enhance the industry’s performance.

  • Fed Govt tasked on telcoms operators

    THE National Union of Postal and Telecommunication Employees (NUPTE) has urged the Federal Government to prevail on private operators to respect labour laws.

    National President of the union, Comrade Sunday Alhassan in a telephone conversation with The Nation lamented that the workers in the private sector operate in an un-dignified environment, which is below international standard.

    He, therefore, charged the supervising ministries – Labour and Communication Technology – to regulate the operators to avoid confrontation with the union.

    He said workers should be alowed to do he called “ decent work” .

    He said the International Labour Organisation (ILO) has set decent work for all as the goal for its work; while the four pillars of decent work include, employment opportunities, workers rights,social protection and representations.

    “Workers in the private sector especially in majority of Nigeria’s private telecoms and courier companies are suffering from the absence of any mechanism for the guarantee or protection of workers’ rights of organising and representation.

    “This is mainly because of the nature or mode of employment in the private telecoms sector, which is characterised by outsourcing, casualisation, time specific employment etc,” he said.

    He said though most of these private firms in Nigeria comply with the labour laws in their home countries and as a result allow workers to organise and unionise in their parent companies, the situation was different here in Nigeria.

    According to him, “Here in Nigeria,these companies deliberately breach our labour laws as they operate with impunity with clear anti labour policies that are neither practiced nor tolerated in their home countries.

    “As a result of this obvious unfair labour practices,workers in the private sector in Nigeria are caught up in conditions that defile decency at work and rather work in conditions that are deficit in dignity.”

     

  • Terminal operators decry govt’s decision on container depots

    The Indigenous Bonded Terminal Association of Nigeria (IBTAN) has criticised the Federal Government’s plan to establish new Inland Container Depots (ICDs) in some parts of the country.

    The association said it is another attempt to kill the indigenous Bonded Terminals which had been struggling to survive since operations at the ports were handed over to concessionaires in 2006.The association said it found it hard to believe that the government will be considering such plan when Indigenous Bonded Terminal Operators and their N1 trillion investments are dying.

    The Minister of Transport Senator Idris Umar said at a forum in Abuja that the government would license more ICDs to make for efficient cargo delivery.

    Its Secretary General, Mr. Haruna Omolajomo, who spoke on behalf of the association, said there are six ICDs in the country which are not working years after they were issued licensces.

    He wondered why the government is now talking about licensing new ICDs while the other ones are not working.Haruna listed problems confronting the ICDs to include lack of funds, political factors and lack of functional railway system.

     

     

     

     

     

  • Operators fault ship policy

    Operators in the maritime industry have faulted the Federal Government’s policy on ship repairs.

    Speaking with The Nation in Lagos, the operators said the government has not offered special incentives for the sector to promote and enhance efficiency in shipping-related services and make the country a logistics hub.

    One of the operators Mr Funsho Badmus said ship building is capital intensive and urged the Federal Government to make special provisions for capacity building.

    He said local ship owners face difficulties in raising funds to facilitate improved business prospects.

    He said the facilities at the existing shipyards were highly inadequate when compared to what is required at international level.

    He said ship repairs is highly competitive and should be supported by national policies and subsidies, adding that without government’s support, the growth of the industry would be difficult.

    He expressed concern over the inability of government to support coastal trade with incentives while other countries do, adding that for the sector to grow, there should be incentives such as lower taxes to offset the costs.

     

  • Operators stall NIID project

    The Nigerian Insurance Industry Database (NIID) could not start as a result of the unhealthy competition and inadequate data upload by underwriters, the former Chairman Nigerian Insurers Association (NIA) Olusola Ladipo-Ajayi, has said.

    He said in an interview that the information uploaded so far by operators is inadequate to flag-off the initiative, adding that starting with the available data would cause embarrassment to motorists whose data have not been uploaded by their insurers.

    He said unhealthy competition and ignorance have deterred most operators from sending their information to the industry database.

    He said: “There is no need carrying gadgets all over the places, when the people you want to monitor are not ready. The level of information uploaded on our database is not enough. The NIA Director-General has been conducting checks with the database, and he has found that the number of vehicles on the database is nothing to write home about. So, if we give the gadgets to policemen, they would begin to harass motorists who even have genuine particulars.”

    Ladipo-Ajayi said the fault was not from the NIA, but from the practitioners who have failed to recognise the wisdom of uploading their data to the database.

    “I cannot explain why so much ignorance runs in the system. I spent two years as the chairman of the association explaining how to understand business issues to insurance companies, but the industry is blindfolded by stiff competition and cut-throat price war. We need some catastrophic events – market forces to send some parking and keep others,” he said.

    He noted that the NIA took six years to prepare for the initiative, adding that the implementation is clogged by fear and personal interest.

    According to a report by the Information Technology Committee of the NIA, over 550,000 motor policies had been uploaded by 42 firms, indicating that 18 firms are yet to unload their policy to the platform.

    The NIID project went live on September 8, 2011. Member companies commenced motor insurance policies data upload immediately and over a total of 550,000 motor policies records had been uploaded by 42 members underwriting motor.

    Selected members of the committee had been highly instrumental to the development, implementation and test running of the NIID system. Committee members had also been involved in training their companies’ branch officers, having undergone the initial train-the trainer briefing on the objectives of NIID.

    NIA said the benefits of the project include monitoring and authenticating insurance transactions documents, reducing incidences of fraudulent insurance transactions and policies most especially for motor and marine policies, reducing red tape and corruption by integrating with the vehicle registration system of the FRSC, the police and other relevant agencies and ensuring access to statistical data for effective decision making.

    Ladipo-Ajayi stated that the project will also help develop capacity in NIA to monitor and authenticate underwriting transactions with the industry and facilitate information sharing on stolen vehicles through technology-driven collaboration between relevant agencies.

    Director-General NIA, Mr Sunday Thomas, said the customised e-reader gadget to be used by security agents to verify vehicle policies, would be distributed soon.