Intrigues of multiple regulations in Nigeria’s telecom industry

The Nigerian Telecommunication Industry has been witnessing exponential growth in leap and bound with respect to job creation, innovations and contributions to the Gross Domestic Product (GDP) despite all the intrigues that has culminated into multiple regulation of the industry. This forms the fulcrum in this report examined by Tony Nwakaegho

Industry watchers, however has envisioned that the industry which has been adjudged by National Bureau of Statistics (NBS) as the sector that has contributed more to the nation’s GDP in the first and second quarters is been over regulated through the administration of various strategies to drain the resources of telecommunications companies.

This trend formed the nexus in the Nigeria Information and Communications Technology Reporters’ Association (NITRA) third quarterly seminar with theme: “The Impact of Over-Regulation of Telecoms Industry on Service Quality” organised for stakeholders to brainstorm as to how the industry was being regulated.

President, Nigeria Information and Communications Technology Reporters’ Association (NITRA), Mr. Emma Okonji in his presentation said that the contribution of the telecoms sector to the Nigerian economy is immense, but the issues with multiple taxation and regulation are becoming sources of worries to telecoms operators and industry stakeholders.

“It is our belief as telecoms reporters, that over-regulation of the telecoms industry could stifle growth of the Nigerian telecoms sector that has been adjudged as the fastest growing market in Africa and the world.

“As watch-dog of the society, we have a duty as telecoms reporters to protect the gains of the industry and it is for this reason that NITRA thought it wise to bring together, the government, the operators and the subscribers, to find a common ground where the issue of multiple regulations and taxes could be addressed amicably, in the interest of subscribers and for the continued growth of the sector,” NITRA President said.

Engr. Gbenga Adebayo, Chairman, Association of Licensed Telecom Operators in Nigeria (ALTON) said that there is one question stakeholder need to continue to debate: “Shall we continue to regulate Technology or Service: When you regulate technology, you regulate the base / bottom line infrastructure, (i.e. GSM, LTE against, CDMA against Fibre and Fixed Network) when you regulate service your regulate the content and over the top service such as Phone call and text messages over the internet, Facebook, Yahoo, Whattsapp BB messenger and the like).

“While under regulation will lead the chaos and high security risks, over regulation will limit the use and application of dynamics of modern technology and also limit access to global trade and knowledge.  We must continue to debate these issues in order to guarantee the sustainability of our technology development.”

He disclosed that the sector do not have enough base station across the country so there is the need to continue to build more; we do not have enough hinterland fiber across the country there is the need to build more and overregulation can limit this growth; this explains in path while the cost of bandwidth between Lagos and London (over 600 miles away) is far cheaper than cost of bandwidth between Lagos and Ilorin kwara State which is less than 400 kilometers away.

We therefore need to remove all bottlenecks, he added in the way of securing right of way and permits amongst others in other to provide better access, achieve the desired national broadband objectives of 30 percent penetration by 2018 and provide affordable services across the country.

“Today, regulation in the name of revenue generation is a major hindrance to the satiability of the telecom industry and a threat to our broadband penetration objections as well as the entire vision 202020 objectives of the Government.

According to him, today, regulation in the name of revenue generation is a major hindrance to the satiability of the telecom industry and a threat to our broadband penetration objections as well as the entire vision 202020 objectives of the Government.

He lamented that multiple and/or unlawful levies, taxes & charges are increasingly imposed upon telecom operations by myriad Ministries, Departments and Agencies (MDAs) of Government at all levels in a way to subtly regulate the industry, stressing that the frequent enforcement actions of these MDAs to compel payment; challenges in securing site and right of way approvals from state governments, continuing community issues hinder development & maintenance of sites across the Country amongst other issues resulting in extensive disruption of telecoms operations, affecting customer experience.

He advised that stakeholders must eliminate and remove all barriers to telecom operations and development and accord telecom infrastructure as the protections of critical national socio-economic infrastructure and the requisite protection to the industry by ring fencing telecommunications from the influence of various MDAs.

On his part, Mr. Olusola Teniola, president of the Association of Telecommunications Company of Nigeria (ATCON) whose address was read on his behalf by Engineer Tony Nwosu, 1st Vice President of ATCON stated that although the NCC is the statutory authority charged with the regulation of telecoms services in Nigeria, today, the telecoms sector has witnessed incursions into the regulatory space by other agencies including state and local governments. These agencies impose levies and fees on service providers for location towers, right of way, and make other laws that govern infrastructure in their domains. The acts of these agencies have sometimes led to indiscriminate shut down of base stations and operator sites, leading to disruption of services. The issue of multiple taxation and concurrent regulation in the telecoms industry has been a source of concern to industry players and a major source of friction between service providers and the intervening agencies. In some cases, the matters have ended up in the law courts, and till date the issues appear unresolved.

Commenting on the regulatory issue, Mr Babajide Odekunle, General Manager, Lagos State Infrastructure Maintenance and Regulatory Agency, (LASIMRA) represented by Adekunle Isaac Adeyinka, Head Commercial, stated that the Agency is the forerunner in Lagos State empowered to regulate public utilities within the geographical boundary of Lagos State, adding that no telecom site has been shut by the agency,  rather the Agency has been collaborating with all the industry players on the best way to move the industry forward.

The Executive Vice Chairman, NCC, Prof Umar Garba Danbatta in his remarks which was read by Mr Tony Ojobo, Director, Public Affairs, NCC, said “We are serious with our job at the NCC. But we also know the reason for our existence; to create and nurture an industry that serves the needs of our people. That thought is uppermost in our minds as we strive to create accessible and affordable telecommunication services across the country.

“We do also agree that some sister agencies tend to be over zealous in trying to help us do our job and in the process create unnecessary difficulties for our operators. However, this is being addressed at the various levels of government and I can promise that the story will be much better very soon.

“In spite of a seeming convolution of activities which affect the health of the industry, we stand here to acknowledge that there is always a good story to tell about the sector. As experienced reporters of the industry before being organizers of this event you are the ones who help tell most of the stories.”

He listed three items which include: Facilitate Broadband Penetration, Improve Quality of Service and Facilitate Strategic Collaboration and Partnership as the rope that will tie all the issues.

“For over a decade, some of the most intractable problems of the industry were the discordant relationship among government agencies, and the relationship between the industry and the various governments and environments where they operate.

Taking a dispassionate look at the situation, the Commission under the new management decided to reach out to other agencies and the state governors with the view to convince them to take another look at the industry and create environments that will favour operators and thus be able to contribute more in terms of investment, employment and taxes. This course of action, which we will want to describe as quiet diplomacy, is helping to bring some needed stability to the sector.

“We have met with their Excellencies under the Governors Forum. We have told them about the existence of a document put together by the National Economic Council which spells out charges on telco infrastructure rollout. This document stipulates charges of N145 per metre of fibre and another N20 for maintenance. There are some states where they charge as much as N8, 000 per metre length of fibre!

“We are reaching out to their Excellencies, the Governors, individually to drive home our point of view and we are happy to announce here that the states we have visited understand our story. We were in Kaduna State where, His Excellency, Mallam Nasir el-Rufai who in other times has done so much for the telecommunications industry, is in strategic alliance with us to improve the fortunes of the industry, and by extension that of the State. We were in Kano State; and also recently visited Ogun State. In these States we noticed infrastructure gaps where the Commission can make intervention through some budgetary provisions, and highlighted issues that trouble the industry. Some of the issues are right of way, double taxation or even some kind of environmental charges resulting in closure of base stations. They have all promised to work with us.

“Ogun State presented and interesting story. Before our visit to His Excellency, Governor Ibikunle Amosun, about 47 base transceiver stations had been shut down by the Ministry of Urban and Regional Planning. Once the implications of such closure were explained to the His Excellency, and a strong intervention made by the Commission, he immediately directed the Commissioner in charge to take action and reopen them.

“One of the operators owed N370m on ground rent for those base stations. The Governor was magnanimous enough to slice it to N120m. Such is the result that our quiet diplomacy is yielding.

“But you look at it. There are various actions that result in over-regulation. What we are not careful to study sometimes is how those actions negate the efforts of the operators and degrade the quality of the networks.

One of our focus areas is to facilitate Broadband penetration and be able to meet the nation’s 30 per cent Broadband rollout target by 2018. This can only happen in a harmonious environment where the operators are encouraged to rollout, where the regulator and other important relevant stakeholders are not encumbered with unnecessary distractions.

“We want to create a win-win situation for the telecommunications industry and the host communities of service providers but over-regulation will continue to be a barrier. My charge to you today as reporters and valued stakeholders of the industry is not to begrudge anybody for their actions but to use your knowledge of the industry to explain why certain actions should not be taken. It is in our collective interest for the industry to continue to post strong figures attesting to the impact of the telecom sector in our social and economic development.”

All the stakeholders were unanimous that for the telecom industry in Nigeria to continue to thrive and maintain its leadership position in the country’s Gross Domestic Product, there will be need for all agencies and government at all levels to collaborate to move the industry forward.