Telecoms revolution: 14 years after, the journey so far

The auction ran from January 17 to 19, 2001 with Radio Spectrum International (RSI), Charles Rivers Associates, Chief Afe Babalola (SAN) and Mr.Paul Usoro (SAN) as consultants to the Nigerian Communications Commission (NCC). The auction’s success set a very important precedent by conducting the world’s first ascending clock spectrum auction which convinced the global community […]

Telecoms revolution: 14 years after, the journey so far
Telecoms revolution: 14 years after, the journey so far

The auction ran from January 17 to 19, 2001 with Radio Spectrum International (RSI), Charles Rivers Associates, Chief Afe Babalola (SAN) and Mr.Paul Usoro (SAN) as consultants to the Nigerian Communications Commission (NCC). The auction’s success set a very important precedent by conducting the world’s first ascending clock spectrum auction which convinced the global community of transparent government processes by informing the public of the details of the auction exercise.  
The new telecoms era has been supported with the Nigerian Communication Act, 2003, which provides regulatory regime for investors and all the players, even as the country has remained and will continue to be an investment haven in years to come, according to a Pyramid Research study.
 Analysis of the developments in the sector in the last 14 years is a pointer to the positive impacts the sector has been having on all sectors of the economy, notwithstanding existing challenges, which the industry still contends with.
“From whatever point of view one looks at it, the telecoms industry remains one of the most outstanding sectors going by available statistics in the industry,” observes a telecoms industry analyst, Mr Akin Akinbo. “Telecoms industry has been transforming our economy in all spheres since the GSM revolution of 2001.”
The sector has recorded tremendous growth with multiplier effects being felt in all other sectors of the economy, ranging from banking, education, e-commerce/retailing, agriculture, medicine, media, oil and gas, among others, he said.
Industry experts said for the sector to have recorded a growth from 450, 000 connected lines in 2001 to over 135 million active subscribers as at the end of 2014, the industry has, indeed, fared very well.  
Not only this, backed by the NCA 2003, the deregulation has resulted in geometric growth in the local and Foreign Direct Investment (FDI) inflow.
 According to the Executive Vice Chairman of NCC, Dr, Eugene Juwah, “Over $32 billion investment has been recorded in the sector as at June 2014 from $50 million in year 2001. The investment stood at $18 billion in 2010 and $25 billion in 2012.”
 This, he said, represents giant strides, even as he promised that the Commission will continue to regulate the industry in a way to continuously make it more attractive to global investment community.
With this investment, telecoms companies have been able to successfully deploy 68,124 kilometre of fibre optic cabling as at the end of December, 2013 while in 2014 alone, additional 38, 000 kilometre of fibre optic cables were laid, according to NCC.
Experts say this represents an increase of about 44.2 per cent investment in fibre optic cabling by the telecoms companies last year alone.
Meanwhile, in the last 14 years, telecoms companies in Nigeria have also increased their base transceiver stations (BTS) expansion efforts from few thousands to over 27, 000, making it possible for more people to have access to telephone services thus covering many hitherto unserved and underserved communities across the country.
Beyond carrying voice signals, the industry operators are also making their BTS either 2G-enabled or 3G-enabled to be able to carry adequate data services, with the country relying on the 11 terabyte of internet capacity brought into the country by the likes of Main One, Glo1, West African Cable Systems (WACS), among others.
According to data from the Ministry of Communication Technology, between 2013 and December, 2014, 2G-enabled sites have increased from 22, 578 to 28,289 while 3G-enabled sites have increased from less than 10,000 to 15,048 during the same period.
However, a backbone infrastructure project, started by the NCC, through the Universal Service Provision Fund (USPF), has also continued to bridge the gap between the served and underserved or unserved areas in the country, especially areas not considered commercially viable by the telcos.
The NCC project is a subsidy-based project designed to facilitate the connection of rural and semi-urban areas to the national transmission backbone infrastructure with the intention to facilitate the build-out of backbone transmission infrastructure.
The project is expected to be implemented in all the 774 local government areas in Nigeria, using targeted subsidies, according to the commission.
Through the project, Minister of Communication Technology, Mrs Omobola Johnson, said about 1, 200 kilometres of fibre optic cabling has also been run so far.
According to the minister, over 170 base stations, in total, had been deployed only through the USPF to un-served and underserved areas by the end of 2014, with each of the base stations serving a cluster of communities.
These metrics have, thus, made Nigeria the fastest growing telecommunications country by the International Telecommunication Union (ITU) ratings for five consecutive years, a feat attributed to the robust and transparent regulatory regime engendered by the NCC.
Perhaps, one area that has been of significant measure of how the industry has fared in the last 168 months of its revolution has been in the area of service tariff, cost of owning communication devices and cost of acquiring Subscriber Identity Module (SIM) card or telephone line.
 According to findings, from N50 per minute of phone call in 2001, the cost has crashed by 78 per cent today as telecoms subscribers now make call for as low as N10 or N9 per minute across networks.
 The NCC adopted in 2013 ‘progressive reduction interconnect termination rates’ whereby new entrants and small operators had termination rates for voice services pegged at N4.90 in April 2013, N4.40 in April 2014 and by April this year it will drop to N3.90 for all networks.
 Also, SIM cards are almost given pro bono by telecoms networks today, whereas, 14 years ago, Nigerians were paying between N25, 000 and N20, 000 to acquire a SIM card with only net-worth individuals being able to own telephone lines.
 The NCC introduced the Mobile Number Portability (MNP) whereby subscribers are at liberty to navigate across networks without losing their SIM number. And because operators are afraid of losing their customers, they have had to improve on their networks by introducing juicy incentives to sustain their subscribers.
 According to the Chief Operating Officer of Computer Warehouse Group Plc (CWG), Mr. James Agada, “Apart from multiple job creation and the multiplier effect on other sectors of the economy, telecoms sector is driving the growth of e-commerce with the likes of Jumia.com, Konga.com, Dealday.com, Kaymu.com, wakanow.com as major players.”
In the same vein, Chief Executive Officer and Executive Secretary, E-Payment Providers Association of Nigeria (E-PPAN), Mrs Regha Onajite, noted that the increasing volumes of e-banking transactions, being driven by the cashless policy of the Central Bank of Nigeria (CBN), “are all resting on the shoulder of the telecoms industry.”
 In a similar submission, Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr Gbenga Adebayo, said the telecoms sector has performed well as an enabler of most of the ICT-driven activities that have brought about efficiency in the country.
 He said: “Today, we bank with ease, we do online cash transfers, we use Automated Teller Machines (ATM), mobile money operators, e-wallet in agriculture, telemedicine, among others, but we forget that all of these activities, in addition to their traditional duty of providing voice and internet service, run on the networks of telecoms companies. Yet, cashless transactions are on the rise every day.”
 Meanwhile, while it barks and places sanctions, the NCC is not a law enforcement agency that could mete out punishment to operators outside the law, at will.
“There have been sanctions on erring operators especially on the issue of QoS and related issues in the last four years. But the Commission wants to go beyond sanctions by ensuring that it helps in addressing the obstacles to smooth operations by the telcos collaboratively,” Juwah said in an interview.
However, while insisting that the sector has not done badly in the last 14 years, the Association of Telecommunications Companies of Nigeria (ATCON) noted that the industry is still bedeviled with myriad of challenges, which, if addressed with the needed velocity, will add a fillip to the sector’s performance in the coming years.
ATCON President, Mr. Lanre Ajayi, listed some of the extant drawbacks in the sector: “A number of challenges are affecting the spread of infrastructure and they include multiple taxation by different levels of government; environmental hostilities like bringing down BTS, especially in parts of the North by terror groups and some government agencies; permits challenge as well as vandalism and theft of telecoms equipments from sites.”