As Telcos Look Forward to Better Business Environment in 2017


Emma Okonji writes that telecoms operators are optimistic that the operating environment will be better in 2017 if the federal government and regulators address most of the challenges bedeviling the sector

As the year 2016 winds down, telecoms operators (telcos) are looking forward to a more prosperous telecoms business in 2017 and they have called on the federal government and the telecoms industry regulator, the Nigerian Communications Commission (NCC), to address their business concerns going forward, to enable them provide better service quality in 2017 and beyond.

Raising some of the concerns, the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, said although telcos struggled to provide quality service under harsh economic environment in 2016, they are hopeful they could do better in 2017, if government act fast to remove all the bottlenecks that slowed down the pace of development in 2016.

He listed some of the bottlenecks to include delay in right of way permit, incessant closure of telecoms sites, harsh regulatory environment, social environment effect among others.
“Should all these be addressed in 2017, the telecoms industry will excel exceedingly in 2017,” Adebayo assured.

Right of way permit
Adebayo, who expressed his displeasure over the delay in granting right of way (RoW) permit to telecoms operators by the federal and state governments in 2016, called on government to consider granting quick approval of RoW to telecoms operators, who are in a hurry to expand their network rollout to unserved and underserved communities. Recounting the ordeals of telecoms operators in relation to RoW permit, Adebayo said most state governments kept demanding for arbitrary fees before granting permit for RoW, a situation, he said, delayed rollout of telecoms infrastructure in some parts of the country in 2016. He called on government at all levels to understand the essential needs of telecoms to the people and to expedite action in granting approval that will enable telecoms operators build and expand telecoms infrastructure in most parts of the country in 2017.

Incessant closure of telecoms sites
Adebayo, who is also worried about the action of some government agencies in closing down telecoms sites and shutting down Base Transceiver Stations (BTS) that belong to those sites, said such action should not be carried over to 2017. Speaking on the implications of incessant closure of telecoms sites for reasons of non-payment of some kind of crazy bills such as environmental impact assessment fees, Adebayo said once a single telecoms site is shut down for any reason, it affects all other BTS that are linked to that site, thus causing disruptions in telecoms service delivery, which invariably will lead to poor service quality.

Adebayo, however, commended the Office of the National Security Adviser (ONSA) for intervening in one of the occasions of telecoms site closure in some states of the federation by giving orders for the reopening of such sites with immediate effect. He called on the federal government, especially the National Assembly members, to quicken the process of passing the bill before it, seeking government’s declaration of telecoms facilities as critical national infrastructure that must not be tampered with.

“ If this is in place, it will dissuade people from willfully damaging telecoms infrastructure at the slightest provocation, and it will also place some restrictions on government agencies that are in the habit of shutting down telecoms sites in the name of regulation,” he said.

Harsh regulatory environment

In the area of telecoms regulation, Adebayo said telecoms operators suffered from harsh regulatory environment in 2016 and called on NCC to be more flexible in handling telecoms matters, rather than imposing huge fines that are capable of grounding telecoms business in the country. Citing the N1.04 trillion fine imposed by NCC on MTN in October 2015, which dragged into 2016, Adebayo said the weight of the fine itself was capable of crippling any telecoms business and commended the federal government for intervening by reducing the fine.

Going forward, especially in 2017, Adebayo said, NCC must consider other means of disciplining the operators, rather than fine.

MTN, Nigeria’s largest mobile operator, was fined N1.04 trillion for failing to deactivate 5.2 million unregistered SIM cards, but was later reduced to N330 billion, after the federal government intervened following series of pleas from MTN.

MTN failed to deactivate 5.2 million unregistered SIM cards on its network, despite repeated warnings from the telecoms regulator, the NCC. The fine for the contravention of a single SIM was N200,000, and when multiplied by 5.2 million SIM cards, it amounted to N1.04 trillion and NCC had no choice than to impose the fine on MTN.

Addressing the issue of the fine the Minister of Communications, Adebayo Shittu said the reduction of the MTN’s fine from N1.04 trillion to N330 billion by the federal government, was done in good fate to save MTN’s business from total collapse and to also protect the jobs of thousands of Nigerians that are on MTN’s payroll.

According to the minister, “We must not throw away the baby with the bath water. If they had packed up and left, let us assume all their staff are not more than 5,000, it means all of those 5,000 will lose their jobs. Also those who made investment, who bought shares, will lose their shares and the Nigeria banking sector would go into crisis.”

Social environment effect

Giving instance of a situation where most talented Nigerians in the telecoms sector and other sectors of the Nigerian economy are trooping out of the country to places where they are being offered with better social environment, Adebayo said the Nigerian government must rise to the challenge in 2017 and ensure that Nigerians remain in Nigeria to do business. He said the situation is causing Nigeria to lose both economic resources and human capital resources to other countries.

Broadband penetration

Commending government for boosting broadband penetration in 2016, the former President of the Association of Telecoms Companies of Nigeria (ATCON), Lanre Ajayi, said there was tremendous improvement on broadband penetration in 2016 and wants government to consolidate on it in 2017 in other to boost 4G LTE deployment in the country, which comes with high speed data connectivity and better voice clarity.

According to recent statistics, broadband penetration between 2011 and 2013, was at paltry eight per cent penetration, but the figure rose slightly to 10 per cent between 2014 and 2015. Mobile broadband, however, climbed to 20 per cent in June 2016, occasioned by the global shift from voice telephony to data communications, as well as the increased number of smartphone devices that are currently in the market, which are the preferred devices to access the internet.

Commenting on the growth of mobile broadband in the ICT sector, Ajayi said the ICT sector witnessed tremendous growth in 2016 and that one major factor that triggered such growth, was mobile broadband, which he said suddenly reached 20 per cent penetration within few months, after several years of stunted growth.

“The ICT sector witnessed tremendous growth in 2016, occasioned by increased broadband penetration, which gave room for the rapid launch of the fourth generation long term evolution (4G LTE) technology by telecoms operators. With increased broadband penetration, most industry players had to launch their 4GLTE, and with this development, many Nigerians now have faster access to broadband and the internet,” Ajayi said.

Operators are of the view that 2017 outlook will be far more promising, should government addresses their business concerns as listed in this piece.