Why NCC directive worries telcos

The Nigerian Communications Commission (NCC) recently instructed IHS Towers Nigeria and ATC Nigeria to disconnect any indebted telecommunication companies from their facilities. Following this development, many of the telcos are said to be worried that the NCC’s directive could portend negative effects on their businesses.  Specifically speaking, the telcos are afraid that they may lose […]

The Nigerian Communications Commission (NCC) recently instructed IHS Towers Nigeria and ATC Nigeria to disconnect any indebted telecommunication companies from their facilities.

Following this development, many of the telcos are said to be worried that the NCC’s directive could portend negative effects on their businesses. 

Specifically speaking, the telcos are afraid that they may lose their subscribers as well as huge revenue if they are eventually disconnected from the IHS and ATC Nigeria facilities.

Apparently, some of the telecom operators are owing IHS Towers and ATC Nigeria. And the NCC believes that telcos have no excuse to owe facility operators, hence the approval to disconnect any telco that is indebted.

Meanwhile, the telco’s indebtedness to facility operators has mostly been blamed on the 2016 devaluation of the naira, according to unnamed sources at IHS, ATC and the NCC.

According to them, the devaluation of the naira by as much as 40% automatically resulted in an increase in tower lease rental. And this is because the tower lease contracts were initially dollar-denominated instead of naira-denominated.

Bearing this in mind, therefore, the concerned stakeholders spoke on the need for future agreements between telcos and the facility operators to be signed in naira term as against the dollar. This, for them, is important as it would facilitate better cooperation and ultimately ensure success in the sector.