Develop New Business Model for Survivability, NCC Urges ISPs

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Emma Okonji

In order to address the mirage of challenges that are threatening the survivability of Internet Service Providers (ISPs) in the country, the Nigerian Communications Commission (NCC), has challenged ISPs to develop new business model in line with current market trends that would help them remain in business.

NCC said the need to develop a new business model, became necessary, following the challenges confronting ISPs, as enumerated by the ISPs at a stakeholders’ forum organised by NCC on Monday in Lagos.

NCC is worried that the number of licensed ISPs in the country is decreasing by the day and that the number of active ISPs that are renewing their licences is also declining, a situation, it said, would continue to affect broadband penetration and growth in the country, if not addressed.

The Director, Licensing and Authorisation at NCC, Ms. Funlola Akiode, in her presentation at the forum, said that between 1996 and 2001, the NCC licensed over 170 ISPs to provide internet services to Nigerians, but expressed her worries that from 2002 to date, the number ISPs issued licences has dropped drastically and the number of renewal of licences also dropped heavily, a situation, she said, raised serious concern within the regulator and the industry stakeholders.

“NCC has witnessed a tremendous decline in the number of applications for the ISP licence. The renewal rate of the licence category also dropped drastically. In the past five years, the Commission has licensed a total number of 103 ISPs nationwide, but only about 10 per cent have applied for renewal of the licence.

“That is one of the reasons why we decided to hold a stakeholders’ forum to find out why about 90 per cent of licensed ISPs are out of business, and why some ISPs have not rolled out services in accordance with the condition of their licences.

“After listening to ISPs and industry stakeholders, NCC feel moved to advise the ISPs to develop a new business model that will help sustain their business and remain competitive in the market,” Akiode said.

According to her, as a responsive regulator, the sustainability of ISPs in the telecommunication business in Nigeria remained the primary interest of NCC.

Apart from guiding us in making appropriate regulatory interventions for the enormous investment in the sector, the stakeholders’ forum would also offer NCC the opportunity to ensure that Internet for all Nigerians is achievable, Akiode said.

Executive Commissioner, Stakeholders Management at NCC, Mr. Sunday Dare, who represented the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta at the forum, said: “The larger telecoms industry, of which ISPs are integral part, is beset with numerous challenges. The issues with power, accessibility of foreign exchange, multiple taxation/regulation, infrastructure vandalisation, as well as high cost and long delays in obtaining rights of way and permits, not only degrade the quality of services provided by our licensees, they also negatively affect the attainment of critical national objectives on the speedy rollout of broadband networks to power socio-economic growth and the enhancement of our industry’s contribution to national GDP.”

ISPs present at the forum, called for uniformity in the cost of right of way, access to funding, reduction in the cost of spectrum for ISPs, approval of spectrum trading and sharing, tough regulatory sanctions for unregistered ISPs who usurp contracts and businesses of registered ISPs, among others.

The ISPs were of the view that uniformity in cost of right of way among federal, state and local government agencies who often impose arbitrary charges on ISPs before allowing them to lay broadband fibre cables in certain locations, would help to standardise cost of right of way across the country. They were also of the view that approval of spectrum trading and sharing would enable them obtain spectrum from operators who are yet to make use of their spectrum licences.

Dare however assured ISPs that NCC was already working on a framework for spectrum trading and sharing, as well as the uniformity of cost of right of way.
Director, Enforcement and Implementation at NCC, Mr. Efosa Idehen said NCC had collaborated with some state governments on how to achieve uniformity in the cost of right of way.