Promos, Lotteries: Waiting for NCC’s Verdict

27 Jan 2013

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Executive Vice Chairman Eugene Juwah

Two weeks ago, Nigerian Communications Commissions (NCC) Executive Vice Chairman Eugene Juwah hinted of the plan to lift the ban on promos and lotteries by telecommunications firms based on a key performance index. But industry watchers wonder why the ban was imposed in the first place, reports Festus Akanbi

Has anyone asked an average Nigerian telecoms subscriber about his experience and the quality of service of these companies in recent times?

Although the degree of efficiency, in terms of service delivery, varies from one network provider to another, the general feeling among subscribers in Nigeria is that a lot more still needs to be done in the area of service quality.

A number of factors have been advanced for the poor service delivery in the telecoms industry amidst the spirited efforts of the regulatory agency in the industry, the Nigerian Communications Commission (NCC), to whip defaulting service providers into line.

Some of the challenges usually blamed for the regime of unsatisfactory quality of service include the near absence of infrastructure needed for a seamless operation, multiple taxes, vandalisation of infrastructure, and many more.

Industry watchers said some of the operators experienced near system collapse in the third quarter of last year as a number of them embarked on system upgrade.

NCC’s Big Stick
Although the affected networks made efforts to carry the consumers along through a number of newspapers advertisements, where the issue of system upgrade was sufficiently announced, the wave of criticisms against poor service delivery by the telecoms firms continued unabated till November last year when the NCC was compelled to make some policy decisions aimed at addressing the consumers’ problems.

It was therefore not a surprise that on November 12, 2012, the NCC announced the ban on all promotions by telecommunication operators and lotteries being carried out on the networks. The ban was informed by the arguments from certain quarters that operators were busy expanding their customer bases through promos and lotteries whereas they lack the capacity to cater for the enlarge customer base.
The commission’s Director of Public Affairs, Tony Ojobo, had explained that the ban would continue to remain in force until such a time determined by the commission.

He said NCC had been inundated with several complaints from consumers and industry stakeholders against the various promotions offered by operators. The operators affected by the ban include Glo, MTN, Intercellular Nigeria Plc, Visafone, Etisalat, Airtel and Multilinks.
According to the NCC, the decision was taken in the interest of the consumers as it has seen that these promotions have caused congestion in networks.

Harvests of Problems
He also added that the on-net call now being offered by operators at tariffs was well below the prevailing inter-connect rates thereby introducing anti-competitive practices and behaviours.
Termination of calls were becoming increasingly difficult from one network to another and overall consumer experience on the networks was poor thereby making it extremely difficult for subscribers to make calls successfully.”

NCC Makes U –turn
However, barely two months into the ban, the commission seemed to be making a U-turn with the declaration by its Executive Vice-chairman Eugene Juwah that the NCC may lift the ban on promos and lotteries by telecoms operators. He had explained that this would, however, affect only those who met the Key Performance Indicators (KPI).

He said the regulatory body was already carrying out the measurements to find out which operators met the KPI in December 2012 and was on the verge of releasing the results.

‘’We are carrying out measurements and when we finish, we will see the service providers that are meeting our thresholds. The operators who meet our thresholds well, we will lift the ban on them, for the ones that do not meet the thresholds, the ban will still stay,’’ he said.
Jawah said with the agreement NCC reached with the operators, the commission had given them enough time to repair and make the necessary investments on their networks. He said the regulatory body and the service providers agreed that the KPI measurements should be carried out for Dec. 2012 services.

Consumer Protection
The ban had attracted criticisms from a number of stakeholders. One of them was President of the Consumer Advocacy Foundation of Nigeria (CAFON), Sola Salako, who maintained that the initial ban would only be justified if there was proof that consumer promotions and lotteries are the reasons for the poor quality of service in the telecoms sector.

According to her, NCC has not been able to establish that connection yet, noting that two months into the ban, service is worse than what it was before the ban.

She maintained that if there is an empirical data, that might be a good way of getting the service providers to do what they need to do, which is to improve on their service, noting, however, that “NCC hasn’t shown us that promotions are the reasons why services on the network are poor. So the ban is unjustified.

“Primarily, every consumer wants value for his money in any transaction; that is the primary reason why you engage in a transaction; that is the context under which a sale contract is sealed. But, when you are in business, there is a relationship. Businesses have come to understand that to remain in business you need customer loyalty and to have that loyalty you need to give benefits over and above values. That is what promotions are used for. They are used as tools to give benefits over and above value but they don’t replace value.

“It is only in a strange environment like ours that consumers would have to depend on promotions in order to at least say: ‘I am getting some kind of value for what I have paid for’, because the basic contract itself has been broken.”  She explained that consumer promotions give the consumer something back for the value lost. “That is a lopsided situation, but that is what we are operating in Nigeria right now. But basically, the consumer wants value first before you can start thinking of benefits in terms of promotions and other things.”

Industry sources, who spoke with THISDAY, wondered how the commission, which has failed to publish the performance figures of the operators since May last year will generate the figures for December, which it hopes to use to determine those who are compliant with its rules.

Outdated Data
A random search on the NCC website showed that the last figures on display were for April 2012.
One of the indices used to determine the level of performance of the telecoms firms was the Call Setup Success Rate (CSSR). Under these criteria, whereas the benchmark figure was 98 percent, MTN was adjudged to have scored 96.42, Airtel 97.48, Etisalat 96.88, while the figure generated for Glo was rendered invalid.

According to NCC, GLO data capture for March 2012 and April 2012 lacked integrity and therefore was not acceptable to the commission. This was because an average of 15% of Glo data was not available (N/A) in the period under review. In the review period, MTN, Airtel and Etisalat failed to meet the commission’s target.

However, Airtel recorded an impressive performance when compared with the commission target of ≥ 98% within the period under review. Etisalat and MTN recorded poor performances when compared with the commission’s minimum threshold in the period under review.

Analysts said unless there are other yardsticks, which the commission intends to use, it is unlikely if any of the operators will be able to perform better in December 2012.  On what should be done to boost performance in the telecoms sector, Salako said, “One, work with them to develop capacity on their platforms. If their capacity is expanded to handle the number of subscribers, we would not be talking about poor quality of service.

“Two, put the structure in place to make sure they use the platform for communications and not to run lotteries. But if you want to run lotteries on the networks, give the consumers the option to choose to join the lottery or not. It should be: “To join the lottery, text your number to a particular number or sort code”; and not “if you don’t want to be a part of this, send a text to say No.” That is already signing me up for what I didn’t sign for in the first instance.

The regulator must define what is acceptable or not acceptable on the platforms. “They also need to work with the service operators to have active, vibrant and accessible customer service call centres. All their call centres have failed and that is an indication that they don’t have capacity even in the call centres. How many call centres should a network that has 10 million subscribers have? How do you determine the number of call centres that is adequate for your subscriber base? The service providers don’t have customer care standards because nobody is setting it for them. So they can do anything they like”.

Last year, the NCC had imposed a fine on MTN, Etisalat, Airtel and Globacom for delivering poor quality of services in the months of March and April. The NCC said the four GSM operators were to pay a cumulative sum of N1.17bn for failing to meet with the minimum standard of quality of service including the key performance indicators. The regulatory body said MTN and Etisalat were to pay N360m each, Airtel would pay N270m, while Globacom attracted a penalty of N180m.

Tales of Woes
In their defence, the affected operators, in a joint statement said, “Over the last ten years more than N 1 trillion has been invested in building and enhancing the four mobile networks. In 2012 alone, the four operators will be spending over N 400 billion of further investments in their networks. All four operators are actively competing with each other on quality of service to win the loyalty of existing customers and attract new customers. But the telecoms operators said:

“We are all equally frustrated and concerned about the failures to meet customer expectations and needs with respect to the quality of service.

Nigeria deserves and needs first class telecommunications networks. We thus apologise unreservedly to you, our customers, for those occasions when you have been disappointed or inconvenienced by a lapse or failure to deliver the requisite level of quality of service. We however believe that it is necessary to explain the major challenges we face as operators and ask for your understanding and support.

“The main factor affecting quality of service is the absence of a reliable source of power. Every single site is powered 24 hours a day, 365 days a year by two diesel generators and requires regular supply of diesel as well as 24 hours security protection. We need to recognise that benchmarking quality of service against countries, which are not operating in such an environment is unrealistic.

“The second major factor affecting network quality are frequent cuts of fibre networks which link the cell sites. These are frequently malicious in nature. Recently, operators have asked that telecommunications Infrastructure be declared “Critical National Infrastructure” which would result in enhanced protection for these assets and criminalize the wilful damage of the same.

“Another equally worrying development is the recent trend towards indiscriminate closure of sites by Ministries, Departments and Agencies of the federal, state and local governments in pursuit of multiple taxation of telecommunications infrastructure.

“Finally, the issue of security is a prevalent threat from our operating environment. We have had particularly unfortunate instances where our employees have been physically assaulted and in some instances killed during site maintenance visit, all in a quest to sustain service quality.”

Tags: Business, Nigeria, Featured, Promos

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