Innovation works. It makes the world go round. It makes the telecoms industry a dynamic one. However, some industries have exposure to innovation while others do not. One of the industries that have benefited from innovation is the telecom. To start with, for the telecom industry, innovation is a matter of life and death. In telecom, changes are deep and numerous. Due to innovation, telcos have migrated from merely selling voice communication per minute.
Telcos now enable you to have access to their networks through multichannel communication such as voice, email, internet, picture and smart business intelligent apps. So, what is next? What new technology will transform this industrial model? No one knows. Nevertheless, a smart telco is always abreast of innovation. What keeps such a telco ahead of the pack is the keen attention it devotes to research and development [R&D].
However, one is thing is sure, in the telecom industry, where the product life cycle is extremely short, innovation is a necessity. It is not an option. Research shows that telcos need to develop cutting-edge technologies in order to sustain organization, systemization and efficiency. This helps a telco to react quickly. It helps to evaluate the technology faster. It helps to discuss and integrate as quickly as possible. Furthermore, the whole economy depends on the creation of a dynamic, competitive and innovative infrastructure.
The marketing eggheads at any telco know that to stand still and do nothing is suicidal. That is why telcos are constantly innovating, constantly transforming, constantly monitoring the way you and I work in order to plug-in through the products they offer. The only concern is how to keep ahead of competitors in a cutthroat environment like Nigeria. Innovation challenges technology convergence and holds the keys to future business growth.One solution seems to be to expand innovation horizons by defying collaboration limits and opening up to technologies that could be acquired externally.
Now, telcos are thinking globally. They are acting personally. They are managing the technology mix consistently. According to a study conducted by IBM, 80% of telcom decision makers acknowledge the importance of collaborating with a wide range of external partners as 51% of the technologies they develop come from external sources. Think about the new Blackberry Z10 and the big four. MTN, Airtel, Etisalat and Glo, all of them jumped on the train. No one lags behind. The collaborative model works. It works for life. It works for living. It works for business. It works for politics. It works for the telcos.
However, the collaborative model allows the telcos to throw up innovative services or add-ons and offer the same to the end-users. This implies that the more innovative you are as a telco, the more end-users you would attract to your network with the innovative services. The model coming from Nigerian Communications Commission [NCC] – the telcom regulatory powerhouse – does not align with the collaborative model at all. While the model of collaboration and innovation is a global phenomenon, what NCC is proposing is disharmonious with global best practice.
What is NCC’s model? Wait for it. The Federal Executive Council [FEC] has on its table a proposal it needs to deliberate on. NCC submitted this proposal. NCC called it Open Access Model for Broadband Penetration. NCC is asking FECto approve it. What does the model seeks? Themodel NCC is bandying in the proposal involves the division of the broadband infrastructure market into three exclusive segments.
Let us take the segments in turn: Network company: According to NCC, this company would provide the passive layer. The company would design and build the fibre optical network.
The second segment is Operating Company. This would provideactive layer. It would also operate all active network elements. The third company is Retail Service Providers (RSPs). This would offer services to end-users.Etisalat, Airtel, MTN and Glo found themselves in this segment.The NCC model encapsulates a departure from the traditional method in which asingle operator could own and manage infrastructure and directly sell services to end users, as we have currently. However, what NCC is proposing completely negates what is currently in operation.
The model proposes that operating companies/active infrastructure providers will buy bulk bandwidth from submarine cable companies. Bandwidth,in turn, would be delivered via optical fibre owned by the passive infrastructure provider/network company; bandwidth would then be resold to RSPs that will offer retail services to the end-users. NCC would issue a fixed number of licenses in the active and passive segments; price caps would be implemented in these segments using cost based pricing; in the RSP segment, multiple licenses will be issued with pricing to end users determined by prevailing market forces; no company will be permitted to operate in more than two segments. Participation in that sense is now optional.
According to the proposal, the Federal Government, through NCC, would facilitate agreements and engage in dispute resolution between the various stakeholders. Concisely, this is the interpretation of NCC model: the big four would not be allowed to do what they are doing now i.e. own network infrastructure, design and build fibre optical network, provide active layer and operate active network elements or offer services to end-users. The big four would have to choose two segments, as it were. NCC is canvassing that model. Hmm, since there are two sides to every wall, here is another model, or best practice.
What is obtainable in Europe is this: a model should not create unfair competition or advantage to some licensees over others. It must promote level playing field. Broadband deployment model must avoid duplication of services/infrastructure to avoid waste of resources. However, industry analysts have opined that NCC’sproposal should not focus on infrastructure alone but should also do the following: tackle policies, environmental factors and other critical issues that will enhance the growth and development of the Nigerian broadband industry.These would include but not limited to right of way, protection of existing infrastructure, MTTR, spectrum management issues to facilitate roll out of broadband.
NCC model is not focusing on the above. Its role in the socio-economic benefits of broadband to individuals and Nigeria should be the focus. NCC needs to promote true competition, open access, transparency and align with national broadband objectives of the Federal Government. Consolidation of industry gains and fostering right environment for development of broadband must be the goal of NCC.Consultations with all relevant industry stakeholders should be done extensively before embarking on such a model, which tends to favour some licensees. NCC’s model should consider existing and future license regimes, and the question should be asked how would it affect existing licensees?
NCC should focus on how to entrench a predictable regulatory environment, one that is devoid of goal post shifting. Over a decade, the country’s telecom market has witnessed far-reaching changes with the introduction of competition into a sector, which was once a monopoly. NCC needs to sustain this by injecting global best practices and telecom model that works.