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No to Telcom Price Hike

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Within the space of a few months the country’s telecommunications sector is abuzz again with pressure from the operating companies who are demanding a 100% price hike for voice and data calls. 

According to reports, the telecommunication operators (telcos) have been pressuring the Nigerian Communications Commission (NCC) to approve the price increase since the first quarter of this year, as they belly-ached over the rising cost of operations.

The series of cost-driven challenges include the rising price of the dollar which has inflated the cost of expanding their capacity as well as network.

That factor has also resonated with the dwindling revenues from decreasing levels of patronage by subscribers.

 Experts said due to rapidly declining average revenue per user for voice calls, which since 2004 has decreased from just over $15 per month per subscriber to a new low of $4 due to the current economic crisis, telcos have been finding it increasingly difficult to make ends meet.

In fact, experts say that in the last 10 years, a drastic reduction had been recorded in call and data tariffs.

To accentuate the challenge is the situation whereby On-Net and Off-Net per minute tariffs which now stand at N12.01k and N12.64 respectively used to be N24 and N75.30k.

In the light of the foregoing, observers contend that if the NCC accedes to the demand of the telcos, the implications would be far-reaching.

In the first place, the consumers of their services would be put under pressure as the charge for calls and data would double.

For instance, it would cost at least N24.00 per minute of call and N2,000.00 per gigabyte of data. Besides, given the slow growth of fresh subscription and low internet penetration, the economy may be worse off for it as a price hike would discourage increase in demand of telecommunication services. 

This newspaper is inclined to identify with the anti-price hike lobby for now, given the fact that a rapid resort to price increase at any instance of finance related operational challenge to the telcos,  is hardly a sustainable practice.

We are inclined to appreciate that the telecommunications sector in Nigeria is still needy of expansion and deeper penetration which the telcos are yet to exploit to the maximum. Rather than increase the prices the issue before them is a matter of market development.

Telecommunication business is a volume-driven enterprise, hence a better approach should be a resort to expanding the market to the rural population to most of whom telecommunication service is still utopian.

According to available evidence, of the country’s tele-density over 70% are urban and semi-urban subscribers.

Meanwhile the urban population is less than 30% of the country’s total population of about 200 million.

This is just as internet penetration in the country is still very low. The implication is therefore clear that there is so much for the telcos to benefit from increased attention to the rural populace.

The foregoing is not to discount the glaring challenges that are associated with running big business in rural Nigeria.

What with the almost non-existent power supply in the rural areas and the issue of security among others, any contemplation of telcos expanding operations to the rural areas may on the surface look unrealistic.

However when it is considered that the Nigerian economy is mostly a rural-driven one the primacy of the rural environment becomes clearer.

Hence, the motivation of juicy returns from investing in a willing and ready market like rural Nigeria is more than enough incentive for telcos to direct their gaze in that direction instead of skinning their current mostly urban-based consumers to the bone.

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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Telecom

Confirmed: Teleology is New Owner of 9Mobile

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Mr Boye Onasanya, chief executive officer of 9Mobile, has confirmed that Teleology Holding is the preferred buyer of the telecommunication company.

 

This came as Barclays Africa, the financial adviser handling the sale of 9mobile, also transmitted an official letter to Teleology Holdings Limited, confirming it as the preferred bidder in the sale of 9mobile.

 

According to Olusanya, Teleology Holdings emerged the best bidder in the sale process, while Smile Telecoms Holdings is considered as reserved bidder if Teleology reneges on its bid for the multimillion-dollar company.

 

In a communication with members of staff, Olusanya said its lenders, presumably Barclays Africa, will now engage Teleology to finalise negotiations on the sale of the company.

 

“In line with my previous communications on the bid process, discussions and negotiations have put the board in a position to name Teleology Holdings as the preferred bidder for our company,” Olusanya said in the memo.

 

“The lenders will now engage Teleology Holdings to conclude other aspects of the negotiation and I will continue to provide updates as and when the milestone occur.”

 

The letter also directed Teleology Holdings to make a non-refundable cash deposit of $50 million within 21 days from the date of the letter, dated February 21, 2018, or lose the bid to the reserve bidder, Smile Holdings Limited.

 

Also yesterday, THISDAY, citing a source at Barclays Africa, said Teleology Holdings Limited has got a letter that served as the official document for the conclusion of the sale of 9mobile.

 

Although it has been reported that Teleology had been selected as the preferred bidder, but such reports were based on speculations, as Teleology had not earlier received any official document from both Barclays and 9mobile, and not even from the telecommunications industry regulator, the Nigerian Communications Commission (NCC).

 

NCC had on February 1, 2018, clarified that it was yet to receive any information from Barclays Africa and 9mobile concerning the sale of 9mobile, and dismissed as speculations and reports making the rounds then, that Teleology had emerged as the preferred bidder.

 

The official letter signed by Barclays and transmitted to Teleology Wednesday, has, therefore, finally confirmed Teleology as the preferred bidder.

 

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NCC, Others Laud Airtel 4G Launch

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Nigerian Communications Commission (NCC), National Office for Technology Acquisition and Promotion (NOTAP) and Senate Committee on Communications have commended Airtel Nigeria for launching its 4G LTE – aimed at providing fast and reliable internet for Nigerians.

 

Senator Olabiyi Durojaiye, chairman of NCC, in his remark at a consumer launch event held recently in Ibadan, said Airtel’s upgrade and expansion to a 4G network in Ibadan will definitely improve telecommunications services and drive economic growth.

“NCC is happy to celebrate with Airtel on this milestone and on other efforts aimed at achieving robust and extensive network coverage in Nigeria. NCC has taken note of Airtel’s numerous giant strides towards the provision of good communication service – accelerating economic growth in our dear country,” he said.

 

Hon. Saheed Fijabi, Chairman, House Committee on Communications, National Assembly, commended Airtel for continuous innovation and commitment to improve telecommunication service in Nigeria. “Airtel has been one of the companies that have always been complying with local content. We believe Airtel has been doing well and we will continue to give them our support.”

 

Dr. Dan-Azumi Mohammed Ibrahim, director general, National Office for Technology Acquisition and Promotion (NOTAP) also applauded the telco for its customer-centric offering; describing the launch of its 4G LTE has a timely revolution.

 

Chief Moses Alake Adeyemo, deputy governor of Oyo State hailed Airtel for deploying 4G in Ibadan, saying that he is glad that Airtel Nigeria has chosen Ibadan to pioneer the launch of its revolutionary 4G service.

 

Segun Ogunsanya, chief executive officer & managing director of Airtel Nigeria, while speaking during the event, said with the 4G launch, Airtel will power people, businesses and cultural advancement through technology in Ibadan.

 

“Airtel 4G will help drive growth, spread prosperity and empower the highly enterprising people of Ibadan to fulfill their potentials and realize their dreams.

 

“Our commitment is to deliver 4G Service that works to Nigerians as we will dramatically improve mobile Internet experience for telecoms consumers across the country.

 

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Medallion Expands Interconnect, Data Centre infrastructure to Enugu, Others

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Medallion Communications Limited said it is expanding its Interconnect and Data Centre infrastructure to Enugu, Port-Harcourt, Ibadan, Kano and Asaba in an effort to accommodate more service providers in other parts of Nigeria.

Ikechukwu Nnamani, Chief Executive Officer of Medallion, who disclosed this last week in Lagos said the expansion, which is in phases will help boost the experience of telecom users across the country.

“Apart from our Data Centre in Lagos and Abuja, we are also on the verge of expanding the infrastructure to other parts of the country,” he disclosed.

He noted that the expansion is majorly part of the company’s plan to fortify it in readiness for a possible surge that would be experienced by infrastructure companies as a result of the advocacy for local hosting of data and content.

“The biggest push we are making this year is to expand our available infrastructure and services to other regions so they can also participate and benefit. We believe that the moment you get content closer to the users, you achieve two things: better user experience at a faster and better rate and lowering the cost,” Ikechukwu noted.

According to him, Enugu and Port-Harcourt would start operations in the first quarter of 2018, while Ibadan, Kano and Asaba will be operational before the end of third quarter this year.

He argues that a lot of infrastructure is still domicile in Lagos, leaving other parts of the country less attractive in terms of telecom services. He believes that a win-win situation remains the best offer for the industry, saying the more the users across the country get benefit from the services, the more the service provider gets more profit.

Medallion’s expertise revolves round building and operating technologically advanced and secure neutral telecommunications infrastructure that enable the exchange of telecom traffic amongst the different operators in Nigeria.

Its carrier neutral Data Centre infrastructure is the most connected in Nigeria, with over 83 service providers, including International gateway/submarine cables, GSM operators, CDMA/LTE operators, Fixed line/fixed wireless, long distance providers, metro fiber providers, ISPs, VAS and other content providers.

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