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Re-examining the NCC Ban on Telecoms Promos, Lotteries

13 Dec 2012

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NCC CEO, Eugene Juwah

 
Last month's ban on telecommunications promos and lotteries by the Nigerian Communications Commission (NCC), is still generating concerns among some telecoms stakeholders. Emma Okonji re- evaluates the effect of the ban on service quality, five weeks after. Excerpts:
 
For a large number of subscribers, the ban on telecoms promos and lotteries did not come as a surprise. Some have said that the ban appeared to have been rather too delayed in view of the persistent network challenges that consumers suffered across all networks. Some, however, are of the opinion that the blanket ban was not a good measure, insisting that it would negatively impact on the subscribers and the operators in the long and short term value.

Although NCC had good intention over its action, but the ban appeared to have created very infinitesimal impact, as service quality remain poor across networks, five weeks after the ban.

"The essence of the ban was to improve on the quality of service, but this is the fifth week into the ban and we are still experiencing difficulties in generating hitch-free calls. So why was the ban in the first place," queried Mr. Samuel Okafor, a Lagos based businessman and a subscriber to MTN and Etisalat.

But confident that the ban will make meaningful impact in the long term value, Director of Public Affairs at NCC, Mr. Tony Ojobo, told THISDAY that the essence of the ban was to put a stop to continued deterioration of the network quality, which he said had gone so bad as at the time the decision was taken. According to him, the ban would definitely reduce the network challenges, and that operators were duty bound to constantly improve on their service quality.

He promised that the NCC was going to carry out another round of Key Performance Indicator (KPI) test drive across the networks this December and that any operator found wanting, would face severe sanctions from the NCC.
 
Reasons for the Ban
Reacting to the deluge of complaints, the NCC applied the hammer on promo ban on November 8, 2012. Announcing the ban, Ojobo said: “The commission carefully evaluated the complaints received especially against the backdrop of sustaining the integrity of the networks, the general interest of the consumers, the socio-economic impact of the promotions on operators and other relevant stakeholders, before concluding on the ban.”

The sweeping ban on consumer promotions and lotteries is to endure until the NCC is satisfied that the networks could cope with the pressure such campaigns mount on their networks.
 
Reactions to the Ban
Subscribers and consumer rights activists are beginning to see the issue differently. First is the worry that the quality of service has indeed not improved five weeks after the ban took effect.

They have argued that instead of an indefinite ban, the NCC would have devised another method that would still lead to improvement on service quality, without affecting subscribers' choice of freedom and the operators' revenue generation in any way.

This may well be in line with the position of the umbrella body of the telecommunications service providers, the Association of Licensed Telecoms Operators of Nigeria (ALTON), which believes than rather than blame the network congestion on consumer promotions and lotteries, the authorities should look elsewhere. Man-made and natural disasters, in the opinion of ALTON, appear to be the major cause of network challenge.

Giving reasons for network challenges, Chairman of ALTON, Mr. Gbenga Adebayo, told THISDAY that the natural disasters were caused by flooding in some Southern parts of the country, while the man-made disasters were caused by spontaneous attacks on telecoms facilities in some Northern parts of the country by gunmen in September this year.
“The impacts of the attacks had since limited the ability of millions of Nigerian subscribers to access telecommunications services, because the incidents affected over 250 telecoms sites that lost connection and many suffered significant damage beyond repairs,” Adebayo said.

According to him, the unprecedented flood in some parts of the country destroyed Base Transceiver Stations (BTS) along its path, leading to significant service disruption in the affected areas, with consequential impact on service availability in some other parts that were not affected by the flood.

“Other than disruption to services, our members have lost equipment worth several billions of naira to the flood disaster across the country, as over additional 300 BTS sites were affected by the flood,” he lamented.
 
Implementing Network Quality Checks
The other point of concern to industry watchers is the failure of NCC to apply the outcome of its own quality checks in deciding to impose the ban on consumer promotions and lotteries.

According to its mandate, NCC has the responsibility to establish minimum service quality standards in service delivery for the telecommunications industry. As stated on the agency’s website: “The service quality standards ensure that consumers continue to have access to high quality telecommunications service by setting basic minimum quality levels for all operators. These standards define the lower and upper bounds of acceptability of such technical issues as transmission rates, error rates, call completion rates, among others and commercial consumer issues such as access to customer care centres, billing integrity and other characteristics that can be measured and improved.”

Early this year, NCC released the results of its Audit Report for March and April 2012. It rated Airtel the best operator for good quality of service. And that was a feat for a network that has experienced seemingly ceaseless boardroom crises, ownership and name changes that only a few of its customers remember that it started as Econet Wireless at the onset of the GSM revolution in Nigeria 11 years ago.

Airtel was said to have recorded impressive performances when compared with the commission’s target on four crucial parameters namely Call Set-up Success Rate (CSSR), Call Completion Rate (CCR), Drop Call Rate (DCR) and Traffic Channel Congestion (TCH). Such a highly rated network is now banned by the same regulatory authority that gave it such a high accolade few months ago, argued another telecoms subscriber to Airtel.
 
The July/September KPI Test
In July and September this year, the NCC conducted what it called a nationwide Benchmark Drive Test (BDT) on the four major operators – MTN, Globacom, Airtel and Etisalat. It was the first of such test and it concentrated on Call Completion Rate, which encompasses the major network KPI (call drop and congestion). The service providers were ranked in Lagos and the six geo-political zones of South West, South East, South South, North Central, North East and North West.

According to the drive test report, Airtel again proved its worth. It ranked No 1 in the three regions of South-south (88 per cent), southwest (88 per cent) and North-east (78 per cent). In the other regions, Airtel came second – Lagos (88 per cent), North-central (92 per cent), North-west (82 per cent) and South-east (75 per cent).

MTN, which started operations the same time with the then Econet Wireless (now Airtel Nigeria), finished third in North-central (74 per cent), South-south (71 per cent), and North-east (58 per cent), and fourth in the other zones – Lagos (72 per cent), South-west (72 per cent), North-west (59 per cent) and South-east (53 per cent).

According to the drive test report, Glo came third in Lagos (88 per cent), South-west (79 per cent), North-west (78 per cent) and South-east (59 per cent) and fourth in North-central (78 per cent), South-south (78 per cent) and North-east (53 per cent).
 
Initial Rating
The latest GSM operator Etisalat, which has a four-year experience in the Nigerian market, also confirmed its standards, had earlier been rated best telecommunications service provider for good service quality by the NCC, based on the service quality Key Performance Indicator audit report released in February 2012.

In the Benchmark Drive Test, Etisalat polled behind Airtel in South-south having recorded 86 per cent, South-west (82 per cent) and North-east (67 per cent). It also recorded first position in the other regions – North-central (94 per cent), Lagos (92 per cent), North-west (90 per cent) and South-east (85 per cent) – with Airtel coming second in each of these areas.

Given that situation, a number of subscribers and consumer rights activists believed that NCC’s technical unit will do well to sit down with telecommunications companies and look closely at the issues of service quality, the environmental and financial challenges that the telecommunications investors face in Nigeria.

For any investor, increasing sales revenue is critical to sustained business operations. Exploiting sales promotion is not criminal. Rather than send wrong signals to potential investors, the NCC should ramp up its consumer education campaigns to keep the consumer properly informed, they said.
 
Subscribers' Concern
Subscribers are now worried that they no longer enjoy freebies, bonuses and discounts on their purchases with the networks and at the same time the quality of service has not improved.


“The NCC has unwittingly struck a double edge sword in the heart of the Nigerian subscriber,” said Olukunle Amoda, a consumer rights activist. “They are not having the benefits for their spend on the networks and at the same time the networks remain congested with subscribers experiencing drop calls at will.”


It appears the NCC is throwing away the baby with the bath water with its sweeping ban. The national regulator is wielding a big stick that is sending the wrong signals to potential investors in the telecommunications sector, some activists said.


“No doubt the blanket ban on consumer promotions will create huge challenges in the
business environment and even for the consumer who the NCC seeks to protect. Healthy rivalry and competition, it must be said, will foster customer satisfaction.”

Benchmarking Telecoms Regulation in Africa
Comparing regulatory policies in other African countries, it was discovered that NCC's action had placed Nigeria as the first and only country in Africa and indeed the rest of the world to place blanket ban on telecoms promos and lotteries.


Tags: Nigeria, Featured, Business, NCC, Eugene Juwah

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