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Tag: telecoms

  • NCC: telecoms sector investments hit $70b

    NCC: telecoms sector investments hit $70b

    The Nigerian Communications Commission (NCC) yesterday said total investments attracted by the telecoms sector to the country have reached $70billion.

    It however said a large chunk came from Foreign Direct Investment (FDI).

    Its Executive Vice Chairman, Prof. Umar Garba Danbatta, who spoke while welcoming guests to the Nigeria Pavilion in the International Telecoms Union (ITU) Telecom World 2017, Busan, South Korea, said despite these modest achievements, Nigeria’s information communications technology (ICT) sector is still, “work in progress”.

    He said: “Since the Digital Mobile Licences (DML) were issued 16 years ago, investment in the sector has hit about $70billion from a mere $50million in 2001. Most of these investments are FDIs.

    “Although, we have made very modest progress in the sector, we still need to deepen investments to make broadband pervasive in the country.”

    He said the country comes to the ITU Telecom World every year to tell its story, share experiences and borrow a leaf from global best practices to address its concerns, engage and collaborate with the global community to strengthen the growth and impact of the Nigerian telecoms industry.

    “We therefore come to enlist the support of other players, governments, regulators and the global community from whom there is always a basket of ideas to take back home to Nigeria.  The implementation of these ideas will ensure a better regulatory environment, even though ours has been seen as a very robust and consultative regulatory agency right from 2001 when the DML were issued.

    “The spirit of cooperation and consultation is very high at ITU Telecom World events,” he said.

    He said the engagement of the delegation with the global community during the event will include creating awareness of the investment opportunities in Africa’s biggest telecom market, as well as guarantee of adequate Returns on Investments (RoIs).

    “In this connection, we are here to tell the ICT community that Nigeria with a population of about 170 million is a preferred investment destination in Africa.

    “With over 150 million active subscribers, in the voice segment, over 102 per cent teledensity and a little over 92 million internet connections, Nigeria is indeed a place to invest,” he told participants.

    According to him, the ITU/UNESCO Broadband Commission for sustainable development said Nigeria now has about 21 per cent broadband penetration and conscious of the reality that broadband fuels faster data transmission speed and capacity, focus now is on how to attract the right investments to grow this critical area of the sector through broadband coverage expansion.

  • Senate moves against telecoms over dropped calls

    Senate moves against telecoms over dropped calls

    Worried by the growing cases of mobile telephone dropped calls, the Senate has ordered investigation into causes of the problem, even as it chided the GSM service providers for inefficiency and poor service delivery.

    The Senate also warned the service providers against unsolicited calls and SMS that flood subscribers’ telephone lines on a daily basis, even as it kicked against illegal deductions of airtime for frivolous product subscriptions without the subscribers’ consent.

    At its plenary on Tuesday, the upper legislative chamber mandated its standing committees on Communications and Trade and Investment to investigate the matter.

    It also urged the Nigerian Communications Commission (NCC), the Consumer Protection Council (CPC), Standards Organisation of Nigeria, (SON) and other regulatory agencies to invoke the appropriate sanctions against the service providers.

    Urging the agencies to protect the millions of mobile telephone subscribers in the country, the Senate said the telecom firms must not be allowed flout extant agreements and regulations on consumer protection.

    The lawmakers further urged the relevant regulatory agencies to ensure refund to subscribers for disrupted calls and unsolicited airtime deductions.

    According to the senators, the regulatory agencies should exercise more control regarding the usage of data bundles to ensure regulatory and operational efficiency in service delivery.

    The resolutions were made following a motion sponsored by Senator Andy Uba (Anambra South).

    Presenting the motion, Uba protested the loss of billions of Naira by millions of Nigerian subscribers on a daily basis, as a result of what he described as unwholesome practices by the telecom firms.

    Uba said subscribers not only experience disturbing rate of dropped calls but also get incomprehensible speech and voice quality “that sounds like speaking from the bottom of a fish tank”.

    The lawmaker also expressed worry over congestion on the various networks leading to poor audio reception and poor delivery on the various data bundles.

    The Senate specifically fingered the major network providers like MTN, Airtel, Etisalat and Globacom for expanding their network coverage beyond what their existing infrastructure could conveniently accommodate.
     

  • Active telecoms users now 154.1m – NCC

    Active telecoms users now 154.1m – NCC

    Active users of telecommunications services in Nigeria decreased from 155.1 million in January to 154. 1 million in February, the Nigerian Communications Commission (NCC) has said.

    The NCC noted a decrease of 993,063 in the number of telecoms users across the country in January.

    “Active users of telecommunications services in the country increased to 154,120,484 in February this year from 155,113,547 in January, ” the telecommunications industry regulator made this known in its monthly Subscriber/Operator Data obtained by the News Agency of Nigeria (NAN) on Saturday in Lagos.

    According to the data, 153,661,547 of the 154,120,484 active numbers subscribed to the Global System for Mobile Communications (GSM) network services.

    The GSM operators’ active customers decreased by 998,899 of the 154,660,446 subscribers recorded in January.

    The reports states that of the GSM operators, MTN had 61,390,697 users in February which decreased by 858,130 against 62,248,827 recorded in January.

    Globacom’s figure increased in February by 27,552, giving a total of 37,250,455 customers against 37,223,902 in January.

    Airtel had 34,832,181 subscribers in the month under review which increased by 165,416 users against 34,666,765 recorded in January.

    Etisalat, however, recorded a drop in customers by 333,738 in February, giving a customer base of 20,188,214  against 20,521,952 users in January.

    The Code Division Multiple Access (CDMA) operators had 217,566 users in February same with the result of January.

    Between the two surviving CDMA service providers, Visafone had 213,106 customers, while Multi-Links had 4,460 in the month under review.

    It shows that the Fixed Wireless network (landline) consumers remained at 26,865 in February.

    NCC’s report said between the two Fixed Wireless, Visafone had 26,437 subscribers as Multi-Links maintained its November record of 428 customers.

    It also revealed that the Fixed Wired operators (landline) subscriber base increased by 412, giving a total of 124,635 users in February against 124,223 recorded in January.

    In the Fixed Wired arena, MTN Fixed moved from having 8,028 in January to 8,564 in February, thereby increasing by 536 users, while Glo Fixed had 12,742 users in February.

    It said that Glo added 11 customers to the January record of 12,731.

    IpNX network moved from 2,477 subscriber base in January to 2,589 in February, increasing its customers by 112.

    It said that 21st Century network had 100,740 customers in February, recording a decrease of 247 users from its January record of 100,987.

    The report shows that the two Voice Over Internet Protocol (VOIP) networks had 89,871 active users in February, as their customers increased by 5,424 from their January subscriber base of 84,447.

    Of the VOIP networks, Smile Communication had 36,285 customers, giving an increase of 573 users to its January result of 35,712.

    Ntel had 53,586 consumers subscribing to its products and services in the month of February, showing an increase of 4,851 user to the January record of 48,735.

    According to the regulatory body, Section 89 Subsection 3(c) of the Nigerian Communications Act 2003 mandates it to monitor and report the state of the telecommunications industry.

    ”The commission is mandated to provide statistical analyses and identify industry trends with regard to services, tariffs, operators, technology, subscribers, issues of competition and dominance.

    ”This is with a view to identifying areas where regulatory intervention will be needed.

    ”The commission regularly conducts studies, surveys and produces reports on the telecommunications industry.

    ”Therefore, telecommunications operators are obligated under the terms of the licences to provide NCC with such data on a regular basis for analytical review and publishing,” the report said

  • The ‘price floor’ for data services in telecoms

    After the brouhaha and the exchanges – including the legislative intervention and the attendant thawing of the ice cold grip of obfuscation of facts and populism – that greeted the introduction of a floor price for mobile data services in Nigeria, it is necessary to dilate on the real motive behind the direction and the debate the matter has generated. I refer to the sociological and economic contexts – the images and metaphors that have shaped both the decisions and the fallouts.

    In doing so, I apply three core principles of relationship management, albeit more applicable in international relations. These are: the Golden Rule, which enjoins that you treat others the way you also want to be treated. The second is the Platinum Rule which instructs that we should treated people the way in which they wish to be treated. Finally, the Double Platinum Rule which commands us not to capitalize on the ignorance of the people but to treat each other with fairness.

    Implicitly, the application of these principles in this instance speaks to our right to know. And we have an obligation to treat others likewise – OTHERS HAVE THE RIGHT TO KNOW. Besides, the spirit of the second principle implies people should be treated the way in which they want to be treated. One implication of this ‘injunction’ is that people need to be told the truth. The second rule is by extension and congruity to the third is a challenge to the public intellectual – when others capitalize on people’s ignorance, the rest of us have a duty to put their submissions in contexts that enable the public to see which interests are served by the submissions and arguments of those who seek to deceive the naive.

    Nigeria has over 153 million active lines, and the tele-density is 109.5 percent. Broadband penetration is already at 21 percent – an impressive mark indicating the sector will surpass the 2018 target of 30 percent. At present, there are over 93 million Internet users in Nigeria.

    It is also noteworthy that the ICT sector is the third biggest contributor to the GDP, following the oil (petroleum), and agriculture sectors; it is also terrific that 15 years of the liberalization of the telecom sector has recorded an impressive cumulative investment of $68 billion.

    Interestingly, the Nigerian story is in congruence with the global trend of how the ICT sector is displacing hitherto notable strongholds of national economies. At the moment, the four most capitalized companies in the world are in the ICT sector – Microsoft, Apple, Google and then Facebook, which recently pushed Mobil, a renowned oil giant to a fifth place.

    Therefore, the real motive for the direction from NCC with respect to the price floor is to safeguard a reversal of national fortune, protect the entrepreneur (irrespective of the size of investment), save the industry, and prepare the market for the real competition ahead.

    Without any iota of equivocation, the public needs to know that ‘price floor’ and ‘price cap’ are regulatory guidelines that are usually not imposed. They are products of discussions and engagement between regulators and operators to ensure the survival of the industries or markets. The former is a minimum price while the latter is a maximum price for a service or product agreed upon by government or organizations in tandem with stakeholders – OPEC does this regularly to protect the interest of its members and the industry.

    The telecom market watchers would therefore recall that a price floor of three naira 11 kobo (3.11K/mb) was in place since 2014 until October 2015 when it was suspended to enhance data penetration. Before the suspension of the new price floor on November 30, Etisalat offered data services at 94 kobo per megabyte, MTN did at 45 kobo, Airtel at 53 kobo and Glo at 21 Kobo. Other smaller operators like Smile and Spectranet also offered different prices but neither of the small operators offered data services at a price above 94 kobo.

    As in other jurisdictions, the Nigerian telecoms market is segmented. Operators that control less than 7.5 percent of the market or are recent entrants are encouraged through policies, regulations and guidelines to stay in business. It was therefore necessary to intervene when some of the operators started offering data at prices that do not even cover the cost of production – a scenario akin to dumping in elementary economics.

    This is precisely the rationale for nudging the players in the data segment to agree to a price floor because activities of some operators have become anti-competitive and predatory.

    Predatory pricing finds expression in offering services at a price clearly below production cost by some operators ostensibly to attract customers to their networks after which they will shrewdly increase the prices. By the time this happens, the predatory operators would have succeeded in driving the smaller operators out of the market. An indication of a grand plan to return the industry to the days of NITEL – to create a monopoly or a duopoly or even at the very best an oligopolistic scenario in which a few operators will hold the nation and its people by the jugular and offer data services at possibly 10 naira per megabyte – and the customer will either take it or leave it.

    A pointer to this possibility as the discerning and industry enthusiasts will have noticed is that there has not been any spectacular expansion of network infrastructure by any of the key operators since October 2015. In its stead, the industry has been signposted by an inordinate scramble and partition of customers that speaks to a clear and present danger orchestrated to hurt the health of the industry.

    Expectedly, in the vortex of these challenges, the NCC reflected on the scenario and decided to undertake a benchmark study, especially across Africa. As the commission embarked on the study, the operators were notified, and some of them confirmed NCC’s findings in the follow-up engagements that NCC had instituted to nudge operators to an evidence-based direction. Quite expectedly too, there were correspondences between the commission and the operators preparatory to the advent of the price floor. And it was evident to all stakeholders that the introduction of a price floor was imperative to sanitize the market.

    However, in view of the fact that there was no unanimity of position nor a scintilla of readiness by the operators to converge positions on an appropriate pricing, the NCC on October 19, met the operators to convey its position  after considering respective responses from the operators and the objective realities of the industry. Consequently, a floor price of 90 kobo per megabyte was introduced as it was considered a fair pricing. It was also agreed that the floor price will be effective from December 1.

    As we can see, procedurally there is nothing fundamentally wrong with the introduced price floor. The pricing methodology is an instrument to check abuses by operators, abuses which by this and many narratives in the public space had already set in. Importantly, the price floor is cost oriented in keeping with the ITU’s recommendation for cost-oriented telecommunications services provision.

    It is also pertinent to state that the big operators have had their days and are still enjoying economies of scale as well as operational stability. There is absolutely no reason for a gang up because the Nigerian Communications Commission as the regulator of telecommunications services also has a responsibility to ensure the survival of the new operators.

    Indeed, the survival of all operators is the utmost interest of the Commission in view of the implications for employment generation, service provision and the growth of the economy at large. This explains NCC’s interest and determination to ensure a level playing field for all operators to enable the country to move steadily at the right pace.

    • Comrade Panti is a social entrepreneur. He lives in Abuja.

  • Much ado about telecoms data price

    The raging debate over the proposed introduction of a price floor for data services by the nation’s telecoms regulator should be seen in the context of what it is: an indexation of the right of Nigerians to free speech. It illustrates most eloquently the fact that the fundamental human right to freely hold an opinion on any matter is respected in the country. And that is cheery news.

    But beyond the deafening din, there is the overriding need to distil the matter and make bare its fundaments. First, the nation’s telecoms regulator, the Nigerian Communications Commission (NCC) proposed a price floor for data services. The interim price floor of 90 kobo per megabyte was arrived at after consultation with telecom operators on October 19, this year. A price floor is the base price that an operator can sell its data. An operator can sell above the price floor but never below it. In simple term, it is the minimum price that an operator can sell a unit of data measured in megabyte.

    Media reports quoting a letter from the regulator to the operators said NCC clearly stated that the interim price floor was for the big operators and that the rate will subsist pending the finalization of a study on the determination of cost-based pricing for retail broadband and data services.

    The price floor regime was essentially to provide a level playing field for all operators in the telecoms space and to encourage small operators and new entrants to acquire market share and operate profitably just so they do not face insolvency. Both categories, small operators and new entrants, were exempted from the price floor. The regulator went ahead to define small operator as any operator with less than 7.5 percent of the market share while a new entrant is any operator that has operated less than three years in the Nigerian market.

    In the main, the directive from the NCC is not punitive. Here then is the misconception. The Senate must have misread the lines when it asked the regulator to suspend the introduction of the price floor regime. The Senate acted in the public interest. The NCC also acted in the public interest. The only difference is that whereas the Senate acted for the immediate satisfaction for the telecoms consumer, the regulator from its commanding height as the driver of the industry acted for the good of the consumer in the long run. Besides, the action of the regulator is not just in the interest of the telecoms consumers but also in the interest of the nation.

    The President of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) Mr. Gbenga Adebayo has argued that the regulator was spot on with the introduction of the price floor for data as a way of arresting anti-competitive practices which has already set in and which is crippling the small operators. He has also confirmed through press statements and media interviews that the decision was taken after a consultative forum between the NCC and the operators. He stressed that operators need to be guided by a price floor to avert the danger of frustrating the flourishing healthy competition that has come to define the nation’s telecoms market.

    The position of ALTON was on Tuesday corroborated by the Executive Vice Chairman of the NCC, Professor Umar Danbatta, when he appeared before the Senate Committee on Communication. Professor Danbatta told the committee that the intervention of the NCC was not designed to undermine the consumers, neither was it also intended to undermine the operators but to find a common ground whereby all the stakeholders, the operators and consumers, would enjoy the gains of participatory regulation which the regulator is noted for.

    He said: “We wanted to protect the Nigerian consumer from unhealthy price war in what may lead to a monopoly that may lead us to the days of NITEL. We did not increase any price but merely provided a regulatory standard to protect small telecom operators.”

    Danbatta said that there were some telecom operators that lacked the capacity to compete with the big operators in the field and there was the urgent and compelling need to protect such operators to enable them to remain in business and gain reasonable foothold in the market. No regulator can be faulted on this.

    ”A situation where a dominant operator provides services far below what is obtainable in the sector in order to attract more customers may lead to a situation where smaller operators will be forced to shut down. We stepped in when we noticed price war in the sector. The price war was already reaching undesirable level that we had to step in to prevent a monopoly like the days of NITEL,” Danbatta told the Committee.

    In other words, the intendment of the price floor was to protect the telecoms consumer, promote healthy competition among operators by allowing the small players the opportunity to co-exist with the big players without suffering grave economic injury that would sound their death knell.

    To fully grasp the wisdom in the regulator’s intervention, Nigerians should ponder why the CDMA’s (Code division multiple access) operators could not effectively compete in the data business with the GSM operators. Some CDMA operators are merely gasping for existential breath. They need to be protected.

    The introduction of a price floor should not be interpreted to mean an increase in tariff. On the contrary, it will lead ultimately to low tariff because it will encourage robust competition, admit more investors into the market and give the consumer the option of choice. It is the most effective tool to avert a drift to a monopolistic market.

    Any Nigerian who is of age will remember the anguish visited on the public by the state-owned NITEL in those days. Then telecoms services were not available, accessible nor affordable.  This country cannot afford a return to those dark days.

    The Nigerian telecom regulator has had a rich history of consultative and participatory regulation which strikes a balance between protecting the consumer and encouraging the operators (investors). This robust regulatory style has in the past one year alone earned the NCC global recognition including from the International Telecommunications Union (ITU) as a model regulator for the emerging markets.

    Suspending the price floor regime is akin to postponing the dawning of the full majesty of the telecoms industry especially as Professor Danbatta is rallying his team to expand and deepen the broadband market.  The glory of the industry can only fully manifest in an atmosphere of multiple choices which is the fodder for healthy competition. The regulator, noted for its active engagement with consumers through its telecoms consumers’ forums and outreach programmes, may need to engage the consumers further on this to get their buy in. The National Assembly should also see the logic behind the price floor: It is not anti-people.

    On the contrary, it is one of the most consumer-centric decisions to be taken by the regulator.  The Nigerian telecoms market has been internationally acknowledged as both revolutionary and resilient. The immediate past Secretary-General of the ITU, the eminent Dr. Hamadoun Toure, never ceases to use the miracle of the Nigerian telecoms narrative to underscore what good regulation can do for any nation’s telecoms market. At the just-ended ITU Telecom World in Bangkok, Thailand, he said there must be something Nigerians are doing very well to have kept the country’s telecoms bourse within the league of the very best in the world. He narrowed the reason to regulatory efficiency.

    The regulator, the legislature and the operators have variously echoed that their actions were for the common good. The challenge is for these stakeholders to find a common ground to convince the other critical stakeholder, the consumers, that a price floor for data (not voice) is not meant to hurt them but to proactively stave off an impending implosion in the telecoms data market which dire consequences can only be better imagined than experienced.

     

    • Umukoro, a blogger, writes from Lagos

  • Down with telecoms taxes!

    It is like there is a fixation in government circles with perceived idle goldmine in the telecoms sector that must be desperately tapped. And so, all manners of gambits are being opened.

    With the gruelling recession that Nigeria currently passes through, government revenue from the oil-based mono economy is notoriously lean and there is apparently a driving impulse within to squeeze Nigerians some more for extra revenue. Not that such is unusual; since it follows in classical economy that government should prospect for higher taxation revenue to cushion the shortfalls in its oil takings. But the brutal fact also is that many Nigerians are stretched painfully thin by this same recession, and any taxation drive not carefully thought through could tip them over the recession cliffhanger into economic abyss. More important, initiatives to raise taxation revenue needn’t be all targeted at the telecoms sector – with the implied constraints for citizens’ constitutional right to free expression. In this severely trying times for the Nigerian economy, the least citizens should be left with is the space for free expression through the telecoms platforms.

    But for a rethink last week, the Nigerian Communications Commission (NCC) would have subjected subscribers to higher data tariff by mobile network operators. The tariff hike was to take effect on December 1st if the regulator had not backed down on the heels of a last-minute intervention by the Senate, which ordered that the initiative be shelved. In its statement suspending the plan, NCC said it asked operators to “maintain the status quo until the conclusion of a study to determine retail prices for broadband and data services in Nigeria.”

    The commission smooth-talked the entire plan. It would have us understand that the whole idea wasn’t about increasing data tariff, but rather some regulatory routine by which it prescribed an interim price floor for data aimed at promoting level playing field for all operators, protecting small players and encouraging new entrants to the industry. “The decision on the price floor was taken in order to protect consumers who are at the receiving end, and save the smaller operators from predatory services that are likely to suffocate them and push them into extinction. The price floor is not an increase in price, but a regulatory safeguard put in place by the regulator to check anti-competitive practices by dominant operators,” the NCC statement explained.

    The actual effect of the policy, though, was that existing data tariff would have been doubled – at least by the major telecoms operators who jointly control nearly all of the Nigerian subscriber market. One operator had earlier last week confirmed such effect: “Dear customer, please be informed that from 1stDec., some data tariffs will be increased to reflect the new rates set by the NCC for operators,” it said in a short message service (SMS) to its subscribers.

    In practical application, it meant Nigerians would have to pay perhaps double the present rates to use Twitter, WhatsApp, Instagram and other social network applications, plus everything else relating to Internet. The corollary is that if they can’t afford to pay higher, they must cut down on usage. And the catch is: with the sheer quantum of Nigerians plying their lives on the telecoms platforms, and with the prevailing hardships that do not dispose many to readily affording the proposed higher tariff, nothing works better to curtail free expression.

    The Senate apparently saw through the endgame. Senate President Bukola Saraki, in explain the chamber’s intervention, was reported saying: “At a time when the cost of living has gone up for all Nigerians due to inflation being at 18.3%, the NCC has implicitly mandated the service providers to increase their costs to maintain profits. This is unacceptable. I have seen the power of the Internet – how it serves to give a voice to the voiceless, and a platform for millions to air their views. This is why the Senate will continue to maintain that access to the Internet remains affordable to all Nigerians.”

    Well, it must be that the Senate is thankfully born again! Because that Red chamber and its Green counterpart, the House of Representatives, had only last February tabled the Communications Service Tax Bill that seeks to impose nine per cent tax on fees charged by service providers for voice calls, SMS, Multi-Media Services (MMS), data usage and pay-per-view television. That bill is currently in the legislative mill.

    Another seeming new convert is Communications Minister Adebayo Shittu, who last week disowned the NCC, saying the Federal Government never gave it the go-ahead to raise data tariff.

    Speaking on a radio programme, Wednesday, the minister rationalised the NCC initiative but nevertheless trashed it. “There are reasons for what they (NCC) have done. The reasons, I’m sure, are not political; it could be more of logistics and all of that… But I want to say that I was not privy to it. Government never gave any such instruction. The voice of Nigerians must not be muscled. This government came in through the democratic process and it has a duty to continue to protect the interest of Nigerians, and I can assure you we will do the needful in protecting the rights and privileges of Nigerians,” he told his interlocutor.

    Only that the minister was far less mindful of constraints to free speech when he mounted an advocacy much earlier on for the proposed communications tax bill. Against the outcry by industry stakeholders and the public over the proposed legislation, he argued for the expected revenue, which he only spiced with the promise of government upgrade of telecoms infrastructure. “I have been reliably informed that the projected earnings from this effort is over N20billion every month, which is N240 billion yearly, and this is an attraction to the government in funding our budget deficits,” he once said.

    Lately, Central Bank Governor Godwin Emefiele weighed in on the telecoms tax drive, proposing a levy on voice calls to help the government break stagflation in the economy. Speaking at the 2016 Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN), Emefiele canvassed “a negligible telecom surcharge to be entirely borne by the initiator of a call.”

    He had said: “In order to protect the poor and vulnerable amongst us, we could structure it to only take effect after the third minute of talk. Some analyses have indicated that the government could earn about N100billion per annum from this alone. Obviously this surcharge will mainly be borne by middle and upper class people, since I do not know many poor people who make calls for more than three minutes.”

    But the CBN boss was grossly wrong. For one, it is moot whether the present economic realities leave Nigeria with any middle class; and the reality on Main Street is that the poor engage the telecoms platforms for far longer because that is where they make up for the repressing effects of their personal economies. Besides, with the high cost of gasoline, voice calls have come in handy for many Nigerians, including the poor, to ply their trade where they can’t afford transportation charges.

    As for the upper class, many rarely pay out of their pockets for basic services like telecoms – I am almost certain Mr. Emefiele does not – because the services are funded from corporate treasuries as part of the perks of office. Where those treasuries are in the private sector, the expense is reckoned as part of overhead costs that are simply downloaded to end-users of the products or services on offer, largely constituted by the vulnerable poor. So, the poor invariably pays.

    Let’s get this clear: there are two direct effects of telecoms taxation, neither of which spares the ordinary Nigerian. Higher tariff will constrain his use of the telecoms platforms, thereby limiting his freedom of speech, or they will translate to higher inflationary trends. We really can do without both.

  • Telecoms sector adds N1.398tr to GDP in Q3

    Telecoms sector adds N1.398tr to GDP in Q3

    Despite a crushing economic recession, the telecoms sector added nearly N1.4 trillion (1.11 per cent growth in the real term) to the Gross Domestic Product (GDP) in the third quarter (Q3).

    Reports by the National Bureau of Statistics (NBS) at the weekend, showed that the sector contributed N1.398 trillion, representing 1.11per cent to the GDP. Although this figure is slightly lower than the N1.5 trillion recorded in second quarter, the NBS said the figures reflected the signs of the times.

    The GDP for telecoms as at Q3 of 2016 under Information and Communication contracted 0.95 per cent in Q3 from 1.49 per cent in Q2 and 4.69 per cent in the corresponding period of last year.

    According to the NBS, the Information and Communication Sector contributed 9.9 per cent to nominal GDP in third quarter, which is the same as  the corresponding period last year, but lower than the 12.6 per cent it contributed in the preceding quarter.

    The sector grew by 1.11 per cent in real terms, year on year in Q3 2016 from the recorded rate in the period of 2015, which was 4.16 per cent point lower and lower by 0.25 per cent points when compared with the rate recorded in the second quarter 2016.

    Director of Public Affairs, Nigeria Communications Commission (NCC) Tony Ojobo said the International Standard Industrial Classification (ISIC Revision 4.0) was the international reference for the classification of productive activities. Its main purpose is to provide a set of activity categories that can be used for the collection and reporting of statistics.

    According to him, the revision of the ISIC on the gross output is based on the revenue from telephone, telex, facsimile, telegraph and other income from satellite and Internet services.  The intermediate consumption, operational expenditure, minor repairs and maintenance and other expenses of the telecommunication and information services are recorded in the ISIC report.

    The GDP constant basic prices for information and communication under the telecoms and information service as at Q1 last year was N1.3 trillion; Q2 was N1.5trillion; Q3 N1.3trillion while Q4 was N1.6 trillion, which translated to N5.9 trillion for last year.

    According to the NCC, mobile telephone subscription increased from 149 million in Q2 of this year to 153 million as at September and teledensity moved to 109 per cent.

    Telephone density or teledensity is the number of telephone connections for every hundred individuals living within an area. It varies widely across the nations and between urban and rural areas within a country.

    There are five Mobile Network Operators (MNOs) in the country. They are Airtel Nigeria Limited, Etisalat Nigeria, Globacom Nigeria Limited, MTN Nigeria Communications Limited and NATCOM Consortium trading as ntel.

    Fixed/Fixed Wireless Operators include IPNX, 21st Century Nigeria Limited, Glo Wired and MTN Wired in that order that have contributed to the growth of the sector meaningfully.

  • Nigeria loses N127b yearly to telecoms infractions

    Nigeria loses N127b yearly to telecoms infractions

    Nigeria loses about N127 billion yearly as a result of infractions of the laws, rules and cybercrimes, the Administrator, National Judicial Institute (NJI), Hon Justice Rosaline Bozimo said yesterday in Lagos.

    She spoke at the opening of the seventh Annual Workshop for Judges on Legal Issues in Telecoms organised by the Nigerian Communications Commission (NCC) in conjunction with the NJC. She lamented that while the telecoms sector has grown with over 150miilion active mobile lines, allegations of fraudulent deductions from customers’ accounts, unsolicited messages and others have become a great concern in the industry.

    She said another issue that is plaguing the country is the scourge of kidnapping which she said is on the rise, adding that security agencies have to struggle to identify devices and location of kidnappers and their victims.

    “The Boko Haram terrorists use mobile lines to coordinate their terror activities. These, among other challenges, may require data and information generated from telecoms services (providers) to serve as evidence in the course of prosecution of related cases. Thus, the need for continuing education of judges in respect of the operations of the telecoms industry is essentially necessary in order to enable them make better informed decisions,”  Justice Bozimo said.

    In his key note address, the Chief Justice of Nigeria (CJN), Hon. Justice Mahmud Mohammed, said the NCC has advanced the use of information communications technology (ICT) for different aspects of national development.

    Represented by Hon Justice Walter Ononghen (Justice of the Supreme Court), the CJN said: “With these new technologies and services, traditional business models and concept of regulation are now being challenged. In this context, policymakers, regulators and courts face significant challenges as the telecoms industry is growing fast into the more complex areas and form. The judiciary, as an arbiter cannot be left behind the times. We are currently undergoing various technological reformations and an ethical resurgence that is repositioning the third arm of government for better justice delivery.”

    According to him, in keeping with best practices and the demands of a technology age, judges must possess a sound knowledge of the law and procedures while becoming proficient in the use of ICT to expedite justice delivery.

    “The modern judiciary that we are creating through the introduction of the renowned Nigeria Case Management System (NCS) makes knowledge of ICT  pre-requisite to progress on the bench and we are determined to make the phased transition from paper to based system to an automated one,” the CJN added.

    Also speaking, the CEO, NCC, Prof Garba Dambatta, said the programme was conceptualised to bridge the knowledge gaps in topical and emerging areas of telecoms with a view to keeping the judiciary abreast of relevant issues in the industry.

    “The emergence of over-the-top (OTT) services which is a non-traditional means of communication has left telecoms regulators all over the world grappling with the issues of whether to regulate or not while balancing the expectations of relevant stakeholders in the industry,” Prof Dambatta said.

  • Battle for telecoms industry’s soul

    Battle for telecoms industry’s soul

    With the liberalisation of the telecoms sector over a decade ago came a floodgate of investments, both local and offshore. According to statistics from the Nigerian Communications Commission (NCC), mobile internet subscriptions from telcos reached 92.2 million in June, this year, showing that of the 157 million active GSM lines, 61.79 per cent has internet subscriptions. Worried that these gains may be eroded by a myriad of challenges, stakeholders met in Lagos to chart a way forward, LUCAS AJANAKU reports.

    The importance of the telecoms sector to national development cannot be overemphasised. To underscore this, even as economic recession takes a toll on other sectors of the economy, figures from the National Bureau of Statistics (NBS) showed that the telecoms sector contributed N 1.58trillion to national gross domestic product (GDP) in the second quarter of this year, or 9.8 per cent, which represented an increase of 1.0 per cent points relative to the previous quarter.

    NBS said this is the largest contribution to GDP made from the sector in the rebased period, which emphasised that growth in telecoms has remained robust when compared to total GDP. However, due to differing seasonal patterns, the contribution from the sector is usually the largest in the second quarter, NBS noted. But the sector continues to be threatened by factors such as multiple taxation/regulatiorn and others.

    It is against this background that stakeholders, including the NCC, Association of Licensed Telecoms Companies of Nigeria (ALTON), Association of Telecoms Companies of Nigeria (ATCON), Lagos State Infrastructure Maintenance & Regulatory Agency (LASIMRA), National Association of Telecoms Subscribers of Nigeria (NATCOMS) and the Nigeria Information Communication Technology Reporters Association (NITRA) came together in Lagos recently to examine how issues militating against the development of the sector could be addressed so that it could effectively offer an option to crude oil in government’s diversification agenda.

    Executive Vice Chairman, NCC, Prof Umar Dambatta, said the giant strides that have been achieved in the industry was as a result of consistent regulation that has taken the interest of all the stakeholders, such as investors, government and subscribers into consideration. He added that some sister-agencies may have exhibited overzealousness in the course of carrying out their duties.

    Represented by the Director, Public Affairs, Tony Ojobo, the EVC said overregulation ‘portends’ great danger to the survival of the telecoms sector. He added that the NCC would not regulate technology and urged the telcos to innovate to remain relevant in the face of over-the-top (OTT).

    ALTON Chairman Gbenga Adebayo said access to telecoms is access to global world, life and prosperity, adding that several studies have shown that a nation’s economic development depends on its overall progress in the information communications technology (ICT) sector, and companies that use ICT grow faster and are more productive and more profitable than those that do not.

     

    Between technology,

    service

    Adebayo said when technology is regulated, the base/bottom line is infrastructure, (that is global system for mobile communication (GSM), long term evolution (LTE) against, code division multiple access (CDMA) against Fibre and Fixed Network) adding that when services are regulated, the content and OTT service such as phone calls and text messages over the internet, Facebook, Yahoo, WhatsApp Blackberry messenger and the likes are inevitably involved.

    “While under-regulation will lead to chaos and high security risks, over-regulation will limit the use and application of dynamics of modern technology and also limit access to global trade and knowledge.  We must continue to debate these issues in order to guarantee the sustainability of our technology development,” he said.

     

    Industry regulation

    ALTON recognises that there are indeed genuine concerns over the implications of the operations of not only telecommunications operators, but also all major players in other sectors of the economy. “In demonstration of its pivotal responsibility in this regard, ALTON has given its full support to the NCC in the establishment of the Guidelines on the Technical Standards for the Installation of various Telecommunications Infrastructure, and we have given and will continue to give and make professional representation and input to several other agencies of government both at the federal and state level, and ALTON will continue to ensure the establishment of, and adherence to the highest possible standards of best practices.

    “We fully understand concerns regarding the growth of telecommunications infrastructure and their environmental footprint and have sought to address these concerns in partnership with operators and other industry bodies.

    “We however believe there is a need to balance these concerns with the need to ensure efficient service provision and counsel that the development of the appropriate regulatory framework can only be achieved through the auspices of the Nigerian Communications Act 2003 (NCA). Such a framework will engender the sustainability of the environment while developing telecommunications infrastructure for the continued socio-economic growth of Nigeria through the provision of world class services to Nigerians,” he said.

    Today, regulation in the name of revenue generation is a major hindrance to the satiability of the telecom industry and a threat to its broadband penetration objections as well as the entire Vision 202020 objectives of the government, he added.

    ATCON President Olusola Teniola  lamented that although the NCC is the statutory authority charged with the regulation of telecoms services in Nigeria, today, the telecoms sector has witnessed incursions into the regulatory space by other agencies including state and local governments. Represented by Vice President, Anthony Nwosu, he said these agencies impose levies and fees on service providers for location towers, RoW, and make other laws that govern infrastructure in their domains. The acts of these agencies have sometimes led to indiscriminate shut down of base stations and operator sites, leading to disruption of services.

    General Manager, LASIMRA, Babajide Odekunle, said the government established LASIMRA in 2004 under the Laws of Lagos State No 23 Volume 37 of August 27, 2004 in order to ensure a one-stop agency for all issues regarding utility infrastructure ranging from water, gas, power and telecoms. This mandate ranges from conception, project management, development and maintenance of all such infrastructure in order to ensure orderly urban development.

    He said the agency has been a forerunner in promoting ease of doing business in Lagos State as issues of over regulation or multiplicity of taxes, levies and charges are completely eliminated. None of our 57 local government areas and local development areas is involved in cases of illegal collection of LASIMRA fees and levies.

    “Under my leadership, LASIMRA has engaged with the NCC in order to ensure that support is given to operations in the areas of infrastructural deployment and service delivery to all stakeholders. It is on record that in 12 months that I have led the agency, no BTS has been shut despite huge debts incurred by some operators in the state,” he said.

     

    Over-regulation evils

    QoS

    According to Teniola, the NCC is empowered to establish minimum Quality of Service (QoS) standards in service delivery for the telecommunications industry. These QoS standards ensure that consumers continue to have access to high quality telecommunications service by setting basic minimum quality levels for all operators. The standards define the lower and upper bounds of acceptability of such technical issues as transmission rates, error rates, call completion rates, and others and commercial consumer issues such as access to customer care centres, billing integrity and other characteristics that can be measured and improved.

    There is no doubt that the incessant shut down of telecoms facilities by multiple regulatory bodies have an adverse effect on the QoS offered by operators in the industry. The outages occasioned by these shut downs negatively impact QoS indices such as reduced call completion rates, increased call drop rates, increased voice quality impairment, and transmission quality impairment. The overall implication of these is heightened consumer dissatisfaction with the QoS provided by operators.

     

    Threat to broadband plan

    The incessant over regulation of the Nigerian telecommunications sector may lead to the inability of players in that sector to roll out services promptly to meet the targets in the National Broadband Plan.

     

    Mortality of telcos

    ATCON warned that if over regulation of the industry is not checked, some of the service providers may be forced to close shop, and this would affect the sector’s contribution to the country’s GDP.

    “Some telecoms service providers may be forced to relocate their services to neighbouring countries while closure of companies or reduction in scope of activities may lead to job losses and worsen the unemployment situation in the country,” the group said, adding that funds meant for the industry may also be diverted to other sectors.

     

    Multiple taxation,

    regulation

    Adebayo said multiple and/or unlawful levies, taxes and charges are increasingly imposed upon telecom operations by myriad of ministries, departments and agencies (MDAs) of government at all levels in a way to subtly regulate the industry.

    The frequent enforcement actions of these MDAs to compel payment result in extensive disruption of telecoms operations, affecting customer experience.  He lamented that operators face major challenges in securing site and RoW approvals from state governments, while continuing community issues hinder development and maintenance of sites across the country, among other issues.

    He said there is increasing incidence of recurrent fibre cuts on network, which affects signaling and transmission links across the country. Indiscriminate vandalism and sabotage of sites by some MDAs which often claim to regulate, collect levies and permits from operators but provide no further protection for such infrastructure.

    These interventions considerably increase the lead time to roll out, inflate costs of deploying infrastructure and depreciate network quality.   The interference of the MDAs has created a wide infrastructural gap that leads to the poor quality of services being experience by subscribers.

     

    Way forward

    ALTON urged continuous debate on whether technology or service should be regulated; elimination and removal of all barriers to telecom operations and development by stakeholders;  and accord telecom infrastructure as the protection of critical national socio-economic infrastructure and the requisite protection to the industry by ring fencing telecommunications from the influence of various MDAs.

    ATCON said there is need for NCC to strengthen its relationships with each state of the federation and relevant agencies to ensure a smooth operating environment for the delivery of telecoms services.

    It also called for greater collaboration of industry associations and stakeholders to ensure a congenial operating business environment for telecoms companies operating in Nigeria.

    The group said there was need for an increased enlightenment and awareness on the importance of telecommunications services to national growth and development, adding that the Federal Government should collaborate with state and local governments on the issue of tax harmonisation.

  • Battle for telecoms industry’s soul

    Battle for telecoms industry’s soul

    With the liberalisation of the telecoms sector over a decade ago came a floodgate of investments, both local and offshore. According to statistics from the Nigerian Communications Commission (NCC), mobile internet subscriptions from telcos reached 92.2 million in June, this year, showing that of the 157 million active GSM lines, 61.79 per cent has internet subscriptions. Worried that these gains may be eroded by a myriad of challenges, stakeholders met in Lagos to chart a way forward, LUCAS AJANAKU reports.

    The importance of the telecoms sector to national development cannot be overemphasised. To underscore this, even as economic recession takes a toll on other sectors of the economy, figures from the National Bureau of Statistics (NBS) showed that the telecoms sector contributed N 1.58trillion to gross domestic product (GDP) in the second quarter of this year, or 9.8 per cent, which represents an increase of 1.0 per cent points relative to the previous quarter.

    NBS said this is the largest contribution to GDP made from the sector in the rebased period, which emphasised that growth in telecoms has remained robust when compared to total GDP. However, due to differing seasonal patterns, the contribution from the sector is usually the largest in the second quarter, NBS noted. But the sector continues to be threatened by factors such as multiple taxation/regulatiorn and others.

    It is against this background that stakeholders, including the NCC, Association of Licensed Telecoms Companies of Nigeria (ALTON), Association of Telecoms Companies of Nigeria (ATCON), Lagos State Infrastructure Maintenance & Regulatory Agency (LASIMRA), National Association of Telecoms Subscribers of Nigeria (NATCOMS) and the Nigeria Information Communication Technology Reporters Association (NITRA) came together in Lagos at the weekend to examine how issues militating against the development of the sector could be addressed so that it could effectively offer as an option to crude oil in government’s diversification agenda.

    Executive Vice Chairman, NCC, Prof Umar Dambatta, said the giant strides that have been achieved in the industry was as a result of consistent regulation that has taken the interest of all the stakeholders such as the investors, government and subscribers, into consideration. He added that some sister-agencies may have exhibited overzealousness in the course of carrying out their duties.

    Represented by the Director, Public Affairs, Tony Ojobo, the EVC said overregulation ‘portends’ great danger to the survival of the telecoms sector. He added that the NCC would not regulate technology and urged the telcos to innovate to remain relevant in the face of over-the-top (OTT).

    ALTON Chairman Gbenga Adebayo said access to telecoms is access to global world, life and prosperity, adding that several studies have shown that a nation’s economic development depends on its overall progress in the information communications technology (ICT) sector, and companies that use ICT grow faster and are more productive and more profitable than those that do not.

     

    Between technology,

    service

    Adebayo said when technology is regulated, the base/bottom line is infrastructure, (that is global system for mobile communication (GSM), long term evolution (LTE) against, code division multiple access (CDMA) against Fibre and Fixed Network), adding that when services are regulated, the content and OTT service such as phone calls and text messages over the internet, Facebook, Yahoo, WhatsApp Blackberry messenger and the likes are inevitably involved.

    “While under-regulation will lead to chaos and high security risks, over-regulation will limit the use and application of dynamics of modern technology and also limit access to global trade and knowledge.  We must continue to debate these issues in order to guarantee the sustainability of our technology development,” he said.

     

    Industry regulation

    ALTON recognises that there are indeed genuine concerns over the implications of the operations of not only telecommunications operators, but also all major players in other sectors of the economy. “In demonstration of its pivotal responsibility in this regard, ALTON has given its full support to the NCC in the establishment of the Guidelines on the Technical Standards for the Installation of various Telecommunications Infrastructure, and we have given and will continue to give and make professional representation and input to several other agencies of government both at the federal and state level, and ALTON will continue to ensure the establishment of, and adherence to the highest possible standards of best practices.

    “We fully understand concerns regarding the growth of telecommunications infrastructure and their environmental footprint and have sought to address these concerns in partnership with operators and other industry bodies.

    “We however believe there is a need to balance these concerns with the need to ensure efficient service provision and counsel that the development of the appropriate regulatory framework can only be achieved through the auspices of the Nigerian Communications Act 2003 (NCA). Such a framework will engender the sustainability of the environment while developing telecommunications infrastructure for the continued socio-economic growth of Nigeria through the provision of world class services to Nigerians,” he said.

    Today, regulation in the name of revenue generation is a major hindrance to the satiability of the telecom industry and a threat to its broadband penetration objections as well as the entire Vision 202020 objectives of the government, he added.

    ATCON President Olusola Teniola  lamented that although the NCC is the statutory authority charged with the regulation of telecoms services in Nigeria, today, the telecoms sector has witnessed incursions into the regulatory space by other agencies including state and local governments. Represented by Vice President, Anthony Nwosu, he said these agencies impose levies and fees on service providers for location towers, RoW, and make other laws that govern infrastructure in their domains. The acts of these agencies have sometimes led to indiscriminate shut down of base stations and operator sites, leading to disruption of services.

    General Manager, LASIMRA, Babajide Odekunle, said the government established LASIMRA in 2004 under the Laws of Lagos State No 23 Volume 37 of August 27, 2004 in order to ensure a one-stop agency for all issues regarding utility infrastructure ranging from water, gas, power and telecoms. This mandate ranges from conception, project management, development and maintenance of all such infrastructure in order to ensure orderly urban development.

    He said the agency has been a forerunner in promoting ease of doing business in Lagos State as issues of over regulation or multiplicity of taxes, levies and charges are completely eliminated. None of our 57 local government areas and local development areas is involved in cases of illegal collection of LASIMRA fees and levies.

    “Under my leadership, LASIMRA has engaged with the NCC in order to ensure that support is given to operations in the areas of infrastructural deployment and service delivery to all stakeholders. It is on record that in 12 months that I have led the agency, no BTS has been shut despite huge debts incurred by some operators in the state,” he said.

     

    Over-regulation evils

    QoS

    According to Teniola, the NCC is empowered to establish minimum Quality of Service (QoS) standards in service delivery for the telecommunications industry. These QoS standards ensure that consumers continue to have access to high quality telecommunications service by setting basic minimum quality levels for all operators. The standards define the lower and upper bounds of acceptability of such technical issues as transmission rates, error rates, call completion rates, and others and commercial consumer issues such as access to customer care centres, billing integrity and other characteristics that can be measured and improved.

    There is no doubt that the incessant shut down of telecoms facilities by multiple regulatory bodies have an adverse effect on the QoS offered by operators in the industry. The outages occasioned by these shut downs negatively impact QoS indices such as reduced call completion rates, increased call drop rates, increased voice quality impairment, and transmission quality impairment. The overall implication of these is heightened consumer dissatisfaction with the QoS provided by operators.

     

    Threat to broadband plan

    The incessant over regulation of the Nigerian telecommunications sector may lead to the inability of players in that sector to roll out services promptly to meet the targets in the National Broadband Plan.

     

    Mortality of telcos

    ATCON warned that if over regulation of the industry is not checked, some of the service providers may be forced to close shop, and this would affect the sector’s contribution to the country’s GDP.

    “Some telecoms service providers may be forced to relocate their services to neighbouring countries while closure of companies or reduction in scope of activities may lead to job losses and worsen the unemployment situation in the country,” the group said, adding that funds meant for the industry may also be diverted to other sectors.

     

    Multiple taxation,

    regulation

    Adebayo said multiple and/or unlawful levies, taxes and charges are increasingly imposed upon telecom operations by myriad of ministries, departments and agencies (MDAs) of government at all levels in a way to subtly regulate the industry.

    The frequent enforcement actions of these MDAs to compel payment result in extensive disruption of telecoms operations, affecting customer experience.  He lamented that operators face major challenges in securing site and RoW approvals from state governments: continuing community issues hinder development and maintenance of sites across the country among other issues.

    He said there is increasing incidence of recurrent fibre cuts on network affects signaling and transmission links across the country. Indiscriminate vandalism and sabotage of sites by some MDAs which often claim to regulate, collect levies and permits from operators but provide no further protection for such infrastructure.

    These interventions considerably increase the lead time to roll out, inflate costs of deploying infrastructure and depreciate network quality.   The interference of the MDAs has created a wide infrastructural gap that leads to the poor quality of services being experience by subscribers.

     

    Way forward

    ALTON urged continuous debate on whether technology or service should be regulated; elimination and removal of all barriers to telecom operations and development by stakeholders;  and accord telecom infrastructure as the protection of critical national socio-economic infrastructure and the s the requisite protection to the industry by ring fencing telecommunications from the influence of various MDAs.

    ATCON stressed said there is need for NCC to strengthen its relationships with each state of the federation and relevant agencies to ensure a smooth operating environment for the delivery of telecoms services.

    It also called for greater collaboration of industry associations and stakeholders to ensure a congenial operating business environment for telecoms companies operating in Nigeria.

    The group said there was need for an increased enlightenment and awareness on the importance of telecommunications services to national growth and development, adding that the Federal Government should collaborate with state and local governments on the issue of tax harmonisation.