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Telecoms industry needs more investments — ATCON president

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The President, Association of Telecoms Companies of Nigeria, Mr. Lanre Ajayi, in this interview with STANLEY OPARA, speaks on the challenges facing the industry

Are telecoms operators in Nigeria really doing well in terms of revenue and profit?

The stories of telecoms operators in Nigeria are not the same. While almost all of them seem to be doing well in terms of revenue generation, not all of them could be said to be doing well in terms of profit. The Nigerian telecoms market is huge and the opportunity is there to generate huge revenue. However, the challenge is daunting, leading to high cost of services which eats into expected profit.

Do you think the industry is still growing?

The industry certainly has a lot of room for growth. The voice market which seems to be moving close to saturation still has some uncaptured markets. Though the teledensity is said to be about 80 per cent, this figure is as a result of many users carrying multiple phones. There are still a lot of people out there who do not own a mobile device.

They present some sort of potential growth opportunities for operators. The growth opportunity lies more in the area of data. There is increasing awareness about the Internet and demand is equally on the increase and this presents enormous opportunities and points to the growth potential of the industry

What is the biggest challenge confronting the industry right now?

I think the biggest challenge facing the industry is the issue of multiple taxation and multiple regulation. In my own opinion, taxation by various tiers of government: federal, state and local government in itself is not a bad thing, as long as it is legal and reasonable. What I think is the main problem is the arbitrariness of the taxation.

In most cases, they are unpredictable. You cannot say for certain what your taxes are going to be for certain activities or a certain period. There are no logic and consistent rules. This makes planning difficult and makes the operating environment look unstable

What can be done to address this challenge?

There is the need for continuous dialogue with various arms of government to create the necessary understanding on the need to create a stable, predictable and conducive environment for telecoms operations. This will enable operators deliver good telecoms services to their subscribers bearing in mind that telecoms has become a necessity for economic growth and sustenance of individual well-being.

What are the other industry challenges?

Other challenges include difficulties in obtaining access to the right of way, which is required to install some infrastructure, vandalism of equipment, poor public electricity supply, non-availability of appropriate spectrum for network roll-out. The success of the GSM network roll-out is largely attributed to the ability of the regulator at that time to provide appropriate frequency spectrum at the right time and in a transparent manner to the operators.

 The success of the roll-out of 4G networks for the deployment of LTE technology which is largely going to drive the “Internet revolution” similar to the “GSM revolution” will also depend on how effective the regulator is in making available the right frequency spectrum for the 4G networks. The appropriate frequencies which are 700 Mhz and 2.5 Ghz are currently in the custody of the National Broadcasting Commission.

The suggestion that we would need to wait till the completion of digitalisation of the broadcasting services before we make spectrum available for telecoms operators has to be revisited. While that argument is valid for spectrum being used for broadcasting today, which may include the ones in the 700 Mhz range, I believe the 2.5 GHz can be made available for operators, whose roll-out plans for the 4G network have been put on hold for so long due to lack of appropriate frequencies.

How would you describe the regulation of the telecoms industry?

We are lucky to have a good regulator: the Nigerian Communications Commission, in the industry. The commission has served as a benchmark to other similar organisations in the world, especially in other developing countries.

NCC was one of the first regulators in the world to license the 3G spectrum, one of the first to set up a consumer parliament, one of the first to setup a universal service provision fund and many more firsts. I am happy that NCC has not lost its momentum even with the change of leadership. There is greater attention being placed on the consumers. This is typified by the recent launch of the Mobile Number Portability, which gives the consumer freedom to change their operators without losing their numbers. The consumer also now enjoys lower tariff of N4 for SMS, as a result of NCC regulation, though I have serious reservation with regulators fixing prices in a deregulated industry.

What are some of the areas the NCC need to improve upon?

NCC certainly needs improvement in the area of frequencies allocation. We need to keep the trail blazer trend especially in the developing economies. Facilitating the rollout of 4G network immediately, gives another opportunity.

Do you think operators are getting the required support from the government?

I applaud the effort of the Ministry of Communications Technology in addressing some of the identified challenges, particularly on the issue of rights of way and multiple taxation and regulation. There is the need to sustain the effort of the ministry to ensure that all identified bottlenecks to creating a conducive environment for the operators are removed. Other tiers of government, state and local governments have to give necessary support to enable operators give required services in their domains.

The new thing in the industry is mobile number portability. Do you see the adoption of the scheme becoming popular in Nigeria?

From available reports, the scheme is very much welcome by the consumers, and a number of consumers have taken advantage of the scheme to change their operators. For as long as the consumers perceive they can get a better service or tariff from some other operators, they would always see a need to port. The pasture is always looking green at the other end.

Do you see mobile number portability improving quality of service?

The assumption that MNP would improve QoS could be interpreted to mean that the operators have control over the poor quality of service but could not be bothered and that they would only bother when they are losing costumers. I am of the view that some of the problems causing poor quality of service are beyond the control of the operators. For example, to improve quality of service, there is the need to expand the network to accommodate the ever-increasing traffic.

When the operators lay down their plans, source the required finances and have a need to lay fibre optic cable but could not get a right of way or want to build a base station but could not secure the required permit, how can the operator proceed? Could it be said that it is within the operators control to deploy infrastructure that would mitigate the poor quality of service if they do not have control on rights of way and permits.

Can you tell us what ATCON is doing to grow the telecoms industry in Nigeria?

ATCON is currently putting a lot of emphasis on human capital development. A number of training programmes are being organised for both the technical staff and management staff of the industry. Last month, for example, some international resource people were invited to come and train the industry technical people on IPV6, thereby preparing the industry for migration from IPV4 to IPV6.

We are also embarking on some sort of self regulation by coming up with some code of ethics. The draft of the code of ethics is ready and will soon be sent to members to subscribe to it. To facilitate mutual understanding between the industry and the regulator, we organise periodic telecoms industry executives and regulator’s forum where we exchange ideas with the regulators and share perspectives on issues.

Do you think the industry needs more investments?

Demand for telecoms services will continue to rise, particularly demand for data (Internet). There is the need to service this demand, hence the need for more investment.

The CDMA aspect of the business is doing really badly. What would you prescribe as a model for survival or resuscitation?

The good news is that there is greater opportunity for the CDMA operator to excel now. The imminent convergence of both the GSM technology and the CDMA technology into LTE provides a good opportunity for the CDMA to come out stronger. You will recall that the GSM operator got their licenses at a premium price while the CDMA got theirs at much lower rate. Now that they may have opportunity to use the same technology to provide service to the same market; they are presented with a huge opportunity to compete favourably.


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