Danbatta: Selling pre-registered SIM Cards Illegal

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    The Executive Vice Chairman, Nigerian Communications Commission, Prof. Umar Garba Danbatta in this interview warns Nigerians against selling pre-registered SIM cards, saying it is an act of illegality that undermines national security. He also speaks on the advantages of the Over the Top technology, how telecoms operators are benefitting from high demand of data for the technology, among other industry issues. Emma Okonji presents the excerpts:

    How will you access broadband penetration in the country?

    On the assumption of office in 2015, we unveiled the 8-point agenda for the telecoms industry, among which is the broadband plan. We are key at driving broadband penetration in the country. Before we came on board in 2015, there was a Presidential Broadband Committee set up by the federal government and the committee was jointly chaired by the former Executive Vice Chairman of NCC, Dr. Earnest Ndukwe and the chairman of Zenith Bank, Mr. Jim Ovia. The committee did a good job in coming up with a detailed five- year National Broadband Plan (NBP) from 2013-2018. On page nine of the NBP, it stated that broadband penetration, as at 2012, was between four and six per cent and there were measures through which broadband penetration could be achieved. Achievement of broadband penetration is not the responsibility of NCC alone, but a combined responsibility of NITDA, NigComSat, Galaxy Backbone, including critical stakeholders like telecommunications operators. NCC and other agencies of government were given their roles to play in other to achieve faster broadband penetration. The NBP stated that the country must achieve five-fold in broadband penetration, but this of course depends on the minimum and maximum thresh hold.

    By multiplying four per cent minimum level of broadband by five, which represents the five years broadband plan, it will give 20 per cent minimum broadband target and by multiplying six per cent maximum broadband penetration as at 2012 by the five years broadband plan, it will give 30 per cent broadband penetration, which is maximum target at the end of 2018.

    But Nigeria had in 2017, surpassed the minimum target of 20 per cent, working towards achieving the maximum target of 30 per cent by the end of 2018. This is according to the NBP. As of today, Nigeria has achieved 22 per cent broadband penetration, and it is close to achieving the 30 per cent target.

    The achievement in broadband penetration, gave rise to the first phase licencing of Infrastructure Companies (InfraCos) to drive broadband infrastructure deployment that will enable broadband penetration.

    The licence was planned to cover six geopolitical zones of the country, as well as Lagos that was mapped out as a zone for the purpose. MainOne was licenced to cover Lagos Zone, iConnect, a subsidiary of IHS was granted licence to cover the north-central zone. These two zones were licenced before I came on board as NCC’s EVC, and it was during my tenure that we licenced additional five zones. They included north-west, north-east, south-west, south-east and south-south.

    The beauty of the licence is that it is cheap because the NCC is not keen at making so much money in licences.

    The NBP specified the roles of government agencies in achieving 30 per cent broadband penetration by the end of 2018. To what extent have they been able to achieve their specific roles?

    Yes, all government agencies that are drafted to drive the broadband policy, were given specific roles but I cannot speak for them on the extent to which they have accomplished their roles. However, I know that they are all party to the implementation of the broadband penetration. The National Information Technology Development Agency of Nigeria (NITDA), for instance, has the responsibility to drive capacity building, but NCC is the arrowhead among all other government agencies in driving broadband penetration and we have done so well to achieve over 70 out of the total 30 per cent maximum broadband target for Nigeria.

    What are some of the challenges of broadband penetration?

    There are national and regional challenges to broadband penetration. In these two broad areas of challenges, there are backbone infrastructure challenges as well as challenges of broadband access in underserved and unserved areas of the country.

    In the area of access, we have about 200 access gaps but through the effort of NCC, we have been able to reduce them to about 190 as of today.

    Nigerians living within the current 190 access gap areas, are not experiencing telecommunications services and this is a challenge we need to address as a country.

    To address the challenges, there is need for capacity building to leverage ICT to do greater things and in better ways. So, we need to sensitise the people and empower them with ICT tools that will make them achieve their dreams. NCC for instance, is pioneering the Advanced Digital Acquisition Programme for tertiary institutions, where we have the highest concentration of talented youths. By the time they acquire the skills, they will be able to develop ICT Applications. NITDA is also involved in ICT training and skills acquisition through its sponsored scholarship programme for students studying ICT related courses, up to doctorate level.

    Interconnectivity is still a major issue in broadband deployment, what is NCC doing about it?

    The advisory committee set up by government to increase broadband access in the country is on course. The committee made up of four licencees of the NCC, namely IHS, MainOne, Phase3 Telecom and Broadbased Telecom, and supervised by Acting President Yemi Osinbajo, has deployed fibre cable in the country and the committee is planning to lay additional 18,000km fibre infrastructure to complement the already 40,000km on ground. This will further complement the 120,000km of fibre optic cable that the country needs to ensure maximum broadband connectivity, that will address the country’s challenges of intra and inter broadband connectivity. Our plan is to make Nigeria a fibre connected nation across all its 774 local government areas. Every local government area in the country deserves to have broadband connectivity and this can be achieved through additional deployment of broadband infrastructure. So, we need targeted deployment across the country.

    What is NCC doing about consumer protection and empowerment?

    We have great plans for consumer empowerment, hence its part of our 8-point Agenda. We went ahead to declare 2017 as the year of the consumer, because everybody in the country is consumer of telecommunication services, including myself. Nigerians welcomed the initiative and majority were able to activate the 2442 short code for Do Not Disturb (DND) initiative, designed to protect the consumers from unsolicited text messages, which was becoming an issue in the telecoms industry. From a little above one million activated DND, it has gone beyond 10 million since 2017. With the activation of the DND short code, Nigerian consumers have powers in their hands to receive or reject messages. They can now reject messages they do not want and accept messages that they want. The number of complains from subscribers have reduced because the NCC is responding fast to consumers’ concerns. Beyond that, NCC still engage consumers through the NCC organised consumer parliament and town hall meetings.

    Delay in the approval of Right of Way by state governments had always been an issue to contend with by telecoms operators who are eager to roll out telecoms services. What is NCC doing about this?

    The NCC is in a conscious engagement with critical industry stakeholders on Right of Way (RoW) issue. I mean critical industry stakeholders like the National Economic Council, under the chairmanship of the vice president of the country, as well as the Nigerian government. I had in the past made presentations to the Nigerian Governor’s Forum, while engaging them on the issues of RoW. The National Economic Council (NEC) had also discussed the issue and came up with a report on harmonised price of N145 per metre length in the laying of fibre optic cable for broadband deployment. No state and no local government is adhering to the NEC report on the harmonised RoW rate, and this is a serious challenge to industry growth and expansion, because state government, federal government and their agencies are imposing high and arbitrary charges on RoW. Even at that, the NCC did not give up the struggle. At the last National Economic Council meeting, there was a very important resolution that came out of the meeting. The resolution was that the harmonised RoW rate of N145 per metre length of fibre cable must be charged as against the current high and arbitrary charges on RoW. This is a major achievement by the NCC, but we still have challenges of fibre cut during road constructions in most states and local governments. Again, we are engaging the states and local governments on the need to protect telecoms infrastructure during road constructions. We need a national telecoms infrastructure bill that will protect telecoms infrastructure across the country.

    The NCC recently signed an MoU with the National Lottery Commission. What value will that bring to Nigeria?

    It will definitely bring a lot of value to the country because lottery is an additional service that adds additional burden to telecoms networks. Lotteries are electronically driven and rides on the network of telecoms operators, through mobile services.

    The Nigeria Labour Congress recently accused NCC of sabotaging its efforts in protecting the rights of workers, by giving tacit support to MTN. How true is this?

    Our duty as telecoms regulator is to protect jobs in the telecoms sector and we jointly demonstrated that with the Central Bank of Nigeria, the financial regulator, in the case of 9mobile, when the banks were threatening to takeover 9mobile because of its indebtedness to 13 local banks to the tune of $1.2 billion.

    In the case of the NLC accusing us of aligning with MTN to short-change the country, it is not true. The NCC has not aligned with MTN in any way to short-change the country. We have a duty to protect telecommunications investment and telecommunications jobs in the country and we are already engaging the NLC on this. NCC will not in anyway stop Nigerian workers from belonging to workers’ union.

    We noticed some delays in the conclusion of the sale of 9mobile, and the possible handover of the telecoms company to the preferred bidder. What could be responsible for this delay?

    The delay in the conclusion of the sales of 9mobile, and the possible handover of the telecoms company to Teleology Holdings Limited, the preferred bidder, could be attributed to several factors. First is about the accumulated debts owed by 9mobile, which must be cleared before handing it over to the preferred bidder.

    9mobile was owing the Commission over N15 billion in annual operating levy (AOL) and numbering fees, which must be cleared according to NCC rule before approval would be given by NCC for the sale of the telecoms company. 9mobile initially wrote the Commission, asking for the transfer of the shares of Emerging Markets Telecommunications Services (EMTS), now trading as 9mobile, to United Capital Trustees, the receiver-manager and the legal representative of the 13 local banks that lent money to Etisalat, now trading as 9mobile.

    9mobile was owing the Commission N12 billion AOL fees for 2016 and 2017, N1 billion for numbering fees for a period of two years, as well as spectrum fees of N2.3 billion.

    9mobile however paid 50 per cent of the total of the over N15 billion it was owing and NCC wrote an initial letter of ‘No Objection’ for the approval of the transfer of shares of EMTS to United Capital, as requested by 9mobile. Again, there was another request from 9mobile, asking NCC to transfer the shares from United Capital to Teleology, and we have to give them another condition before such transfer would be effected. The condition is that 9mobile must show NCC a clear evidence of the registration of Teleology with the Corporate Affairs Commission (CAC), among other conditions like the conclusion of the due diligence evaluation on Teleology by the NCC, to find out the technical capabilities of Teleology to effectively handle 9mobile.  A committee was set up to find out the technical capability of Teleology and its corporate governance structure. As soon as they meet the other conditions, we will again transmit the final approval letter of ‘No Rejection’ for transfer of shares from United Capital to Teleology. The evaluation report on Teleology will soon be made public and we are on course to conclude the process of the sales of 9mobile and we are assuring Nigerians that we will conclude the process if all conditions are met.

    There was a similar issue where MTN bought over Visafone in January 2016, and Visafone later requested that it’s 800MHz spectrum licence be transferred to MTN. How was that resolved, and what is NCC’s position on transfer of spectrum licence?

    Over a year ago, Visafone requested NCC to transfer its equity to MTN, following the acquisition of Visafone by MTN in 2015. They asked for 100 per cent transfer of shares from Visafone to MTN, and we granted them their request after all the conditions were met. Later it occurred to them that they did not request for the spectrum licence transfer, but the transfer of spectrum from one operator to another is not automatic because there are competition issues that must be addressed. We told them that the Commission is empowered by an Act to conduct public enquiry and invite all critical stakeholders including the media to discuss it, and we have done so recently. The outcome of that public enquiry will determine whether their second request on spectrum could be granted. We have concluded on the report of the public enquiry, we are only waiting to get the recommendation of department that conducted the public enquiry. We will surely look at the recommendation before approval will be given or denied.

    SIM card registration is still an issue. What is NCC’s position on this?

    The SIM card registration has been concluded and the data uploaded into our dedicated database. What ever is uploaded on SIM card registration into our database is still considered as raw data until treated as real data. There is a software that treats it and ascertain the credibility of the data. If after we apply the software, we identify anomalies, then we must impute the data again or send them back for proper registration. SIM card registration is key to addressing national security and we must address it as such. Nigerians must stop selling pre-registered SIM cards because it is an act of illegality that undermines national security.

    The Federal Inland Revenue Service (FIRS) recently complained that telecommunication operators were not remitting value added tax to government, thereby short-changing government. What is NCC’s view in this?

    We are law abiding and we want all telecommunication operators to be equally law abiding and pay their tax as at when due. On this note, we have advised telecoms operators to pay all outstanding Value Added Tax (VAT) and all other taxes that were meant to be paid to government. We encourage FIRS to invoke appropriate sanctions where there is no compliance in payment of taxes. FIRS is a legal entity created by law and we will not interfere in the discharge of their duties. So, telecoms operators have obligation to pay their taxes.

    Recently, the NCC indicted some telecoms operators that were involved in call masking and refiling, but statistics shows that the big telecoms operators are still involved in call masking. How will NCC address this?

    Call masking and refiling is one practice that NCC is doing everything possible to end because it not only illegal, it also undermines national security. We have indicted and fined some operators that were involved in the practice and we are still investigating to get more of the operators that are secretly involved in the practice. However, our statistics shows that the rate of call masking, where operators deliberately hide the number details and identity of a caller, is on the decline, and we will not rest on our oars until we completely eradicate call masking from the system. We have since established that the sources of call masking is SIM Boxes, which are small electronic boxes with the capacity to receive and transmit voice and data signals. The boxes are portable and those involved in the illegal business, find it easy to move around with the boxes and they are not in one location. Calls are supposed to be routed through Base Transceiver Stations (BTS) but the perpetrators bypass BTS to transmit data and voice signals from their mobile electronic boxes. Having identify the challenge, we need a technology solution that will be able to trace and track call masking across the country and block all such calls. We have since discovered that people are involved in call masking because of the differential in the cost of international termination rate and local termination rate. So, because local termination rate is cheaper, they tend to hide the numbers and details of international calls that are terminating in Nigeria and make it looks as if such international number is a local number in order to pay local termination rate as against international termination rate that is higher.

    Poor quality of service is still being experienced by subscribers, despite efforts from NCC to address it. What are NCC’s plans to put an end to poor telecoms service quality delivery?

    Limited telecoms infrastructure is a big challenge to service quality and Nigeria needs additional deployment of BTS to change the narrative. We need more deployment of telecoms infrastructure to provide the additional capacity that is needed to improve service quality. Other challenges include cable cuts, disruption in electricity supply among others. NCC has the ability and capacity to monitor quality of service across the country. We can use our Key Performance Indicators (KPIs) to identify areas of poor service quality and trace the operator involved in it and direct such operator to fix it up, but the challenge with operators is insufficient telecoms infrastructure. We have resolved to use the option of fine as the last resort to address poor service quality, but we must continue to monitor the networks and encourage deployment of additional telecoms infrastructure.

    What is NCC doing about unused telecoms licences that are in the hands of some telecoms operators?

    NCC has introduced regulatory measure that encourages spectrum trading. It helps operators to trade their idle spectrum through leasing or transfers. The regulatory measure was put in place to prevent owners of spectrum from keeping to themselves, spectrum that is not in use. Spectrum licences are national resources that should not be kept unutilised. The NCC has the capacity to monitor the use of spectrum that we have assigned to operators and if we discover anyone that is not being used to provide telecoms services, we can invoke such licence.

    We call on all operators to take advantage of the framework put in place on spectrum trading, leasing, sharing or transfer.

    Nigeria is the only country that has such regulatory framework and I will be speaking about it in the next Mobile World Congress (MWC) in Barcelona, Spain. We will continue to provide proactive regulation, by taking appropriate steps before the challenge occurs.

    What is NCC’s take about the loss of revenue to telecoms operators through Over The Top (OTT) technology service deployed by fintech operators?

    I read and hear arguments about OTT service such as WhatsApp, Skype, Facebook, Instagram, among others, where the providers of such services ride on the network of traditional telecoms operators to deliver voice and data services to the people at no cost. Traditional telecoms operators who have invested heavily in their network, which the OTT service providers are utilising, have called for the regulation of OTT services, complaining that the service is eating deep into their revenue generation. The International Telecommunication Union (ITU) is still looking at the implications and the gains of OTT services to consumers and the operators and the NCC cannot act in isolation over the OTT service delivery, which I think the consumers are enjoying because it is completely free of charge.

    But what the operators will not say is the manner and way that OTT service stimulate demand for data. We have noticed tremendous increase in data usage for the past 12 months because people must buy data to access the free OTT service. Again, the operators will not say how the OTT service stimulate demand for network expansion, and this means making more money. Again, Nigeria is on the global LTE map because of the huge use of data. LTE is a network of data associated with high speed use of data. So, data usage has doubled in the country and operators are making money from the increased data usage. We know the challenge of the other side of the coin, where OTT service providers are riding on telecoms infrastructure that they did not invest in to provide free data and voice services. There is need to strike a balance and the International Telecoms Union and the Commonwealth Telecommunication Organisation are currently looking at it because it is a global issue, and developed countries like the US have not come up with any regulatory framework on OTT.

    Investment in telecommunications appears to be decreasing. What could be responsible for this?

    Foreign Direct Investment (FDI) into Nigeria in telecoms is still on the increase. I do not have the figure for 2017, but government is doing things to further boost FDI through the Executive Order on the ‘Ease of Doing Business’. Again, telecoms contribution to GDP is on the increase. We are making efforts to woo investors to come and invest in the telecoms sector of the country.

    What is the current situation with interconnect debt between operators. Does an operator have the right to disconnect another operator for accumulated interconnect debts?

    Today we see increase in the accumulation of interconnect debts among operators. Some operators are heavily indebted to others over interconnect termination fees, but our position is that those owing interconnect fees must pay such fees without further delay. Interconnect debt is made of two components: the facility and infrastructure components. When calls are terminated on other networks, the networks where the calls are terminated must be paid their termination fees. The NCC is worried about the accumulated huge debts from interconnectivity, which currently stood at over N165 billion and we have summoned operators and advised them to pay up their interconnect debt promptly. But be that as it may, no operator can disconnect another operator on the ground of interconnect debt, except by the express permission from NCC. Disconnection will be a measure of last resort and cannot be done without the approval of NCC.

    Part of the negotiation between MTN and the federal government over the 2015 MTN fine was that the telecoms company will be listed on the Nigerian Stock Exchange, but MTN is yet to be listed. What happens if it fails to list by 2019 when it will complete payment of the fine money?

    If it fails to list by 2019, that will be a breach of the settlement agreement that the NCC reached with the telecoms company. It was an agreement that was signed, sealed and delivered, so anything short of it will be breach of agreement. In terms of payment, MTN is meeting up with the payment agreement plan for instalment-based payment. So far it has paid N165 billion, which is 50 per cent of the total fine of N330 billion. They are due to pay another N55 billion by December this year and will complete payment by 2019. The initial fine was N1.04 trillion, for failure to deactivate unregistered SIM cards from its network, but the fine was later reduced to N330 billion at the end of all negotiations.

    Internet Service Providers (ISP) are reducing in their numbers due to harsh market condition. What is NCC doing to resuscitate them?

    We have seen distortions in the ISP market, especially where telecommunication operators have diversified into offering internet services to their subscribers. The distortion is squeezing smaller operators out of market, but one way that could better address the distortion is to divide the market into wholesale and retail trading to separate the bigger operators from the smaller operators, but I do not know if the market is matured now for such separation. A time has however come for NCC to look at the situation and sensitise the market.