ALTON rues foreign exchange crisis, urges for govt intervention

Following the challenges facing the economy, with companies, including telecommunications providers also at the receiving end, a group has urged the Federal Government to urgently address the issue from getting worse.

Chairman, Association of Licensed Telecom Operators in Nigeria, ALTON, Engineer Gbenga Adebayo, who made the observation, said although telecommunication industry has been tipped as one of the sectors that will be the cash cow that will boost the nation’s Gross Domestic Product, but, it is currently bedeviled by challenges ranging from foreign exchange, inflation, data floor price which if not address can run the sector aground.

Adebayo, made the plea during a presentation, question and answers at the Breakfast Meeting organised by Nigeria Information Technology Reporters Association (NITRA) in Lagos recently.

He said that one of the country’s major achievements in the past 16 years, is the revolution recorded in the telecom industry.

Commenting on the foreign exchange, Engr Adebayo noted that the telecom remains the most reliable public infrastructure that need forex because they operate international network from one network to the last mile network, hence if they do transaction that are dollar based they have to settle it in dollars.

He lamented that the industry is facing major challenges in the purchase of foreign exchange to fulfill contractual obligation in equipment supplies and foreign vendors.

“We operate foreign networks; we have obligations not only to vendors, we even have traffic obligations, because when you make an international call to a third party abroad you do that through a second party network and when it is terminated there that your call is redenominated in the currency of that country.

“The effect of forex has led to increase in operation cost, and when they are not able to honour their roaming charges in foreign currency they will be disconnected. Some foreign vendors have issued notice of disconnection, demanding for advance guarantee before they can honour your services since your country is in problem.

“You now have to prepay a deposit in other to accommodate payment when due. We need the foreign currency to services those obligations because we don’t do everything here. In all of these, we can’t increase tariff, we can’t increase rate. We have the disruptive technology OTT that is taking away part of the revenue,” he stressed.

He said that the industry don’t manufacture the equipment such as, RS coverage equipment for BTS, BSC, Core equipment, mobile city centre, Spare parts, Media gate way, Optical fibre, transmission equipment, micro wave, Planning tools, customer planning equipment, SIM cards, network tools, planning tools, among others.

He said these are subsequently integrated to form a network tool for voice services, data, SMS, value added services, and enterprise solutions which are finished goods in the telecom sector.

He said that the telecom sector is often describes as, ‘infrastructure of infrastructure’ and social right capital, which propel productivity in other sectors of the economy.

The equipment, he said, are what gives us the air value that we have because we don’t speak through an open space.

According to him, ALTON wants direct foreign exchange intervention from the CBN because, one policy somersault could lead to crisis in the telecom sector, and even banking services among others.

Adebayo said, “We should not think that the industry is fortified that nothing can happen, because if it does go soar, there is no single network operate that has the head roll to accommodate the overflow from the field of one network provider, when it goes out of service. It can bring down our entire national network.”

“We are committed to improvement to quality of service and for us to implement this quality of service, we need to renew our licences, procure equipment, honour foreign obligation to suppliers and if we don’t do that we can’t improve the quality of service.

What it means is that if we have degradation in our quality of service it might be difficult to optimize these networks again if we don’t have access to foreign exchange,” he emphasized.

The ALTON Chairman, also said that there is a cost and there is price, cost is how much it takes to provide the service, price is the cost plus your margin and that is what makes the price.

What it means, he said is that some of the services offering today, providers are selling at cost and in some cases below the cost.

“When I came on this board we have 35 members, like Nitel, Intercellular, Starcom, Multilinks, among others who came to the industry but due to the circumstance in the industry they didn’t succeed.

Where are those companies today? Where are those providers today? So we have today the big and the mega big. It is some of the providers that change the rules of the game. If you don’t allow the small players to survive competition will not thrive.

When we came the bigger operators were saying per second billing was not possible and we believed it as a myth because they have spoken. But one small operator came and said from today I will start with per second billing and that changed the rule of the game. Imagine if the situation did not allow the small player to compete what would have happened.

I have asked in different for a where are the ISPs? Do we still have ISPs? Who are the ISPs? Because the story is a very simple story. You go to the NCC you apply for a licence to be an Internet service provider, they give you this licence and you go to the operators to go and buy bandwidth to resell and to redistribute to your subscribers. The day after your services are commissioned on site, the big operators come with their mega package half your own price, how will you survive?

“So, we are saying unless we allow for a minimum level of price, it will be very difficult for the small players to survive. When the small players leave, the big players will decide on what they want to do. And you know the truth, the small players will leave on the first day, if the circumstances don’t change; the big players leave the second day.

It is only a matter of time. In those days, it was the topic of the small player. Today, it is the turn of the bigger player. The issue of the data floor is sometime we must go back to because there is no escape from it.

“The other one is what I called the disruptive technologies who have taken away the revenue of the legacy operators because, today, once you have data packet you can do anything that you might want to do.

“So, if you don’t allow the small players to survive, it is only a matter of time when contradiction will catch up with the big players when the small player will leave on the first day because of the hostile environment by the same circumstances of the disruptive technology, the big players will also be affected, he said.”

By Tony Nwakaegho