Battle for telecoms industries

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.