The Executive Vice Chairman of the Nigerian Communications Commission, Professor Umar Danbatta disclosed this while delivering the Keynote Address at the dinner hosted by the Board of Trustees of the Nigeria Media Merit Award, NMMA, to flag-off the commemoration of the 30th Anniversary of NMMA as Africa’s foremost media excellence recognition institution, at the Lagos Sheraton Hotel on Tuesday night.
“This represents a teledensity of 109.47%. Besides, basic Internet subscriptions have also grown from zero in the pre-liberalisation era to over 152 million. It is also gratifying that the broadband subscriptions now stand at 85 million, representing a 44.49% penetration,” Danbatta said.
Dwelling on the topic, “The NCC New Strategic Vision (Implementation) Plan (SVP) 2021-2025: A Transformation Agenda”,which signposts thedirection of the Nigerian telecom industry in the next five years,Danbatta recalled the trajectory of the evolution of telecoms in Nigeria.
Represented by the Director, Public Affairs of the NCC, Mr. Reuben Muoka, the CEO of NCC, he recalled the nation’s showing of a paltry 18,724 telephone lines at independence in 1960 to serve a population of 40 million people, translating to a teledensity of 0.5 at that time.
Today, “the Information and Communication Technology (ICT) sector contributed 18.44 per cent to the nation’s Gross Domestic Product (GDP) in the second quarter of 2022. From this figure, telecommunications sector alone contributed 15 per cent,” Danbatta said to place on record the unprecedented contribution of the telecom and ICT industry to GDP.
N200 Billion ICT Bank and other Strategies to Rescue the Nigerian Telecom Sector ￼
By Elvis Eromosele
The Nigerian telecommunications sector must have nine lives. No, it is not a cat. It is however almost always in a near constant mortal struggle with the forces that be – read, government and its agents. The fact that it’s still here means that it has somehow managed to survive, remained sustainable and even dared to thrive. It is a phenomenon that ought to be studied.
Every indicator shows that the telecom sector remains the bright spot in the nation’s weak economy. It drives socio-economic development, boosts productivity and contributes to improving the lives of citizens like no other sector.
The COVID-19 pandemic impacted negatively on the global economy by precipitating lockdown and economic disruptions with transport, tourism and aviation sectors tumbling. The telecom sector however continued to “buga”. It saw an increase in voice service and massive growth of digital channels for daily routine activities ranging from telecommuting to entertainment and social engagements. The sector witnessed the growth and saw huge profits as financial reports from major operators show.
The Nigeria Telecom sector is a gift that keeps on giving. It has witnessed strong growth in recent years and is expected to have continued growth over the foreseeable future. The growth in the sector, according to industry watchers, has been driven by the increasing population, growing demand for communication services, and rising adoption of smartphone services. Some experts have pointed to strong support by the regulatory authorities which in recent times has led to the licensing of the 5G network in the country – a feat some have called the first in Africa.
Investors in telecom operations are smiling at the bank. It is not surprising therefore that everyone wants a piece of the action, even the government.
It must be stated that the government collects the value-added tax, annual operating levies, licensing fees and duties among others. This is in addition to all the other statutory taxes including PAYE and withholding tax.
Now, there are reports that the Finance Minister, Zainab Shamsuna Ahmed, is actively pushing for another tax, a five per cent excise duty on telecoms services. Most right-thinking Nigerians, including, interestingly, the Minister of Communications and Digital Economy, Prof Isa Ali Ibrahim Pantami, have kicked against it. If a recent news report is to be believed, the finance minister is not backing down.
If the government is keen on milking the telecom sector, it should at least step up on its behalf and help tackle some of the long-standing issues that have held the sector back.
The challenges are not new. Many of them have plagued the sector since the liberalization of the industry. Industry experts are quick to point out the fact that these challenges are also opportunities when viewed through the right lenses.
Here are seven of the most pressing challenges, with what I hope are feasible solutions. The government should give it a look-in if doesn’t want to kill the goose that lays the golden egg.
Difficulty in accessing long-term funds for the industry – The government must hasten to establish an ICT Bank. While it should be in the mould of the Agricultural Bank, it should operate like a venture capital entity. So, after due diligence, the ICT Bank will invest in tech starting with a clearly stated exit /pull-out date. I propose an initial take-off grant of N200 billion naira only.
Right of way – The goal of the right of way policies should not be revenue generation but to facilitate the speedy deployment of telecom infrastructure. In the short term, states can take a leaf from Ekiti State which reduced telecom’s right of way charges by 97 per cent. For the long term, states should install road ducts on a build-and-lease basis. The federal government can set an example here by installing ducts on all new federal roads and leasing to operators based on an agreed realistic billing scheduled for usage.
Multiple taxations – Again, governments at all levels, need to stop seeing telcos as only cash cows. Efforts must be towards proper harmonization of taxes and levies and so make it uniform across every state and locality. This will undoubtedly aid the planning and deployment of services by operators.
Energy challenge – Yes, the telcos knew that Nigeria had a power problem when they paid for licenses in 2001. But who could have imagined that the issue will persist unresolved, for this long? Currently, the logistics of ensuring round-the-clock availability of power is a nightmare that keeps whole teams awake many a night. A straightforward solution is the establishment of energy parks to serve critical infrastructure. QED!
Local content – Some progress has been made here, especially through the National Office for Technology Acquisition and Promotion (NOTAP). To move forward the government and other corporations need to host local content locally. As a corollary, Nigeria must urgently adopt the doctrine of data sovereignty.
Multiple regulations – This is another problem that is almost as old as the industry itself. The NCC has done a lot of work here. Nigeria must explore a converged regulatory regime as the way out.
Capacity building – Human resources have always been an issue but the recent increase if the rate of migration has made it a mini-crisis. The Nigerian Universities Commission (NUC) and the NCC have their work cut out for them – bridge the gap between academia and industry via curriculum reform involving the industry and internships.
I’ll be the first to admit that these problems and solutions are not exhaustive. The NCC may want to consider calling a stakeholder forum to deliberate on the problems and proffer solutions. The white paper produced can now be the basis of engagement with the government and its relevant agencies.
For the government, the focus should not be only on sharing the existing telecom cake, but also on helping the industry bake a bigger cake.
Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.
Broadband Penetration, National Identity, Key To Attaining Digital Economy– DG NITDA
The Director-General, National Information Technology Development Agency (NITDA), Kashifu Inuwa CCIE, has highlighted broadband penetration and digital identity amongst critical areas to the attainment of digital economy.
highlighted that setting the Digital Identity process on track will ensure effective implementation of the National Digital Economy Policy and Strategy NDEPS, within the stipulated period.
highlighted Broadband Penetration, Digital Identity amongst critical areas to the attainment of Digital Economy. Adding that to achieve positive outcome in regard to Digital Economy, there is need for connectivity, and identify who consumes or provides the services and also you should be able to pay for the services.
Inuwa who said this while playing hosting for the Nigeria Digital ID4D Project Team at the Agency’s Corporate Headquarters Abuja, said for the country to achieve positive outcome in regard to digital economy, there is need for connectivity.
The DG informed the Team that NITDA’s mandate of developmental regulation is in line with what ID4D is working on, while pledging the Agency’s unalloyed support.
He acknowledged that collaboration between NITDA and ID4D as well as other relevant partners will be welcomed with an open arm.
Inuwa reiterated that government cannot do it alone, there by urging ID4D to help in whatever way they can for Nigeria to get this digital identity and implement policies and mandate.
“Identity is key to digital economy. We believe we need each other to succeed. Our mandates are interwoven, we need Identity to succeed, and you also need us for the Identity to be used in digital economy”, the DG said.
While expressing confidence that the Nigerian Digital space will soon compete with its peers globally, Inuwa said “IT is dynamic. That is the reason why we are reenacting our own Bill that was passed in 2007; a lot of vocabularies are obsolete and things have changed, without that enactment, it will be difficult for us to deliver. We need to have a robust Law, because technology is growing and becoming dynamic.”
He also expressed concern with regulating the digital space, which he described as ungoverned space that needs to be regulated in the best way. “The right regulation does not exist, we need to co-create it, because it is not something that you can learn from the previous generation, due to its non-existence during their time, it’s our collaboration that will bring the desired changes in developing the nation’s IT sector,” he noted.
Earlier in his address, the coordinator, Nigeria Digital ID4D Project, Musa Odole Solomon, appreciated NITDA’s stride in sanitising the Nigerian digital space.
Solomon said the ID4D Project objective is to increase the number of persons with a National Identity Number (NIN) and issue a robust and inclusive foundational Identity system that facilitates their access to services.
He added that, “The project is designed following an ecosystem model, and not limited to any single organization. It involves different Agencies of government, private sector and civil society. The project had since identified NITDA as an important ecosystem implementing partner.”
Only 188 Out of 756 Licensed ISPs Are Active In Nigeria
With 756 Internet Service Providers (ISPs) licensed by the Nigerian Communications Commission (NCC), only 188 are active, as at March 2022, even as stakeholders tasked the Commission to sustain the sector.
The reasons for the inactiveness of the ISPs ranges from anti-competition issues; low internet access in the Northern region of the country due to security challenges; challenges of Right of Way (RoW) and conclusion of standardization with state governments; multiple taxation; deployment of Customer Premise Equipment (CPE) compatible to all service providers; lack of company Corporate Code of Governance to lack of code of practice for Internet Service provision.
Meanwhile, stakeholders who spoke at the Telecoms Sector Sustainability Forum, organised by Business Remarks Limited, in Lagos state, have called on NCC to create the enabling environment for ISPs to thrive.
The chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON) Engr. Gbenga Adebayo, said the big four operators (MTN, Airtel, Glo and 9mobile), have taken over the business of ISPs in Nigeria.
Adebayo, who was represented by the head, operations, ALTON, Gbolahan Awonuga, said, “The big operators are doing wholesale and at the same time, doing retailing. This is affecting the smaller operators like the ISPs. If the big operators who are supposed to be doing wholesale, are also doing retailing, what will happen to the smaller operators who are supposed to be doing the retail? This legislation is not working well for the smaller operators and if we are not careful, the smaller operators will be thrown under the table.”
Adebayo however tasked the NCC to enforce strict regulation, adding that, the environment is hostile to the smaller operators. “Out of over 700 ISPs, who were given license to operate, we have about 188 active members. If the big operators are crying that they cannot sustain their business anymore, how much more the smaller operators? Several ISPs are about to close their shops if this issue is not addressed. We need to brainstorm together and find ways to ensure that we all sustain our businesses,” he added.
In the same vein, the chief operating officer, WTES Projects Ltd, Chidi Ajuzie said the tier 1 ISPs have deep pockets, adding that they have the capacity to take over the business of the tier2/3 ISPs. “Technically, this is what has happened and that is why we have less than 200 active ISPs in Nigeria, of which 60 per cent of them are struggling,” Ajuzie added.
Ajuzie, however called on ISPs to look into other areas to sustain their business. He urged ISPs to leverage on open access-rollouts and partnership, reduce legacy CAPEX and OPEX, expand serviceable footprint, consolidate multi-vendor maintenance, reduce risk and high cost and maintain integration for end-to-end broadband, among others.
In response, the Executive Vice Chairman (EVC), NCC, Prof. Umar Garba Danbatta said the NCC is working tirelessly to tackle the challenges that have marred the operation of the ISPs in Nigeria, adding that “Deliberate policies and regulations are being looked at in the Commission in ensuring that ISPs and other smaller players in the industry thrive.”
Danbatta, who was represented by the NCC, Zonal Controller, Lagos, Mr. Yomi Arowosafe, said the Commission has formulated the National Policy on Digitalisation, as well as the National Broadband Plan 2020-2025, which can only be facilitated through Internet Service Provision, adding that its implementation can make Nigeria compete favourably in the world economy.
The EVC said some of the measures the Commission has embarked upon to continue to promote fair play and orderly development of the Nigerian Communications ecosystem as well as boost the competitiveness of the industry includes providing the required regulatory frameworks and interventions in terms of policies, guidelines, determinations etc that will encourage fair play in the telecoms industry and encouraging and mandating more openness and transparency in the activities of stakeholders within the industry in order to ensure healthy competition practices amongst competing licensees.
Others are promoting digitalization efforts across the length and breadth of the industry; committed to full realization of the objectives of the Nigeria National Broadband Plan 2020-2025; actively engaging in strategic collaborations with stakeholders who have crucial roles to play in the growth and development of the Nigerian economy with emphasis in the telecoms industry; encouraging industry stakeholders to seek and exploit opportunities and licensing of 3.5GHz which will create an enabling environment for ISPs to strive in Nigeria.
He reiterated that the digitalization of the economy can only come into being when the ISPs are fully encouraged, adding that the Commission is focusing on, to ensure that the enabling environment is created through the development of regulatory instruments that will address the concerns of ISPs in particular and the telecoms sector at large.
Danbatta however applauded Business Remarks Limited for organising the Forum that had in participation, members of NCC, Skymax Integrated Network Limited, IPNX, eStream Networks, WTES Projects Limited, MangoNet Integrated Technologies, FibreOne Broadband, Dotmac Technologies, ICSL and members of the National Information Technology Development Agency (NITDA).
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