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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

PTECSSAN Calls for call for Implementation of Executive Order on Local Contents

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Abdur-Raheem Adebayo Shittu, Minister of Communication

Private Telecommunication and Communications Senior Staff Association of Nigeria (PTECSSAN) has called for the implementation of the President’s Executive Order on local contents.

 

Oladapo Moses, president of PTECSSAN, made the call in an interview with the News Agency of Nigeria (NAN) in Lagos, alleging increase in number of foreigners working in Nigeria.

 

Moses noted that four months after the executive order was signed by President Muhammadu Buhari, there had been no blue print for its implementation.

 

NAN recalls that President Buhari signed the executive order on February 2 to improve local contents in science, engineering and technology components.

 

The order, among others, prohibits the Ministry of Interior from giving visas to foreign workers whose skills are readily available in Nigeria.

 

Moses claimed that since the order was signed, the number of expatriates whose expertise was available in the country had continued to increased.

 

He said that if the trend was allowed to continue, the plans of the current administration to create 740,000 in the country would fail.

 

He said: “The rate at which Ministries, Departments and Agencies grant expatriate quotas to foreign workers is worrisome.

 

“This is a direct abuse of the laws. Imagine an expatriate working in Nigeria as a Security Manager, Fleet Manager, Account Manager and Human Resource Manager. This is sad.”

 

According to him, telecommunication companies keep Nigerian workers as casual or outsource staff while their foreign counterparts, some of who are less qualified, are treated with full benefits.

 

He said: “This is against the laws as no Nigerian worker understudies the expatriates; rather the reverse is the case.

 

“We have companies with 30 per cent locals and 70 per cent foreigners as staff.”

 

Moses said it was wrong to believe that Nigerians in the telecommunication sector “still needed to learn forever, after over a decade of learning and teaching the supposed teachers”.

 

He said that some multi-nationals hid under redundancy policy to terminate employment of the indigenous workers only to bring in foreigners to take over their positions.

 

Moses added: “The result is that Nigerians lose their jobs to foreign workers.

 

“We urge the MDA’s to immediately work with all labour unions in the information sector to nip this development in the bud.”

 

The union leader lamented that the executive order has not been implemented and advised Nigerian telecommunication workers to wake up and be united to be able to tackle the challenge.

 

 

 

 

 

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Internet of Things Spending to Reach $1.2 Trillion in 2022- IDC

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International Data Corporation (IDC) reports on Internet of Things shows that spending will experience a compound annual growth rate (CAGR) of 13.6% over the 2017-2022 forecast period and reach $1.2 trillion in 2022.

 

The forecast is based on the latest research in the burgeoning IoT technology market, which offers business investment opportunities across a spectrum of industries and illuminated through use case implementations.

 

As the diverse IoT market reaches broad-based critical mass, innovative offerings in analytics software, cloud technologies, and business and IT services have expanded rapidly.

 

Carrie MacGillivray, group vice president, Internet of Things and Mobility, said, “The IoT market is at a turning point – projects are moving from proof of concept into commercial deployments.

 

“Organizations are looking to extend their investment as they scale their projects, driving spending for the hardware, software, services, and connectivity required to enable IoT solutions.”

 

The intersection of multiple technology domains is one key to successfully understanding and developing a supply-side product and market development strategy.

 

The IDC IoT Spending Guide is an industry defining market intelligence tool that details end-user adoption and spending across multiple segmentations.

 

Marcus Torchia, research director, Customer Insights & Analysis, said, “The latest IoT Spending Guide release fully aligns to IDC’s Industry Taxonomy.

 

“We now forecast all 20 standard IDC Industries,”

 

“As a result, we are proactively mapping IoT use cases that have segmentations in shared domains, such as in Smart Cities and Digital Transformation investment areas.

 

“As a part of these improvements, IoT supports spending forecasts for 100 use cases.”

 

Forecast highlights show that the consumer sector will lead IoT spending growth with a worldwide CAGR of 19%, followed closely by the insurance and healthcare provider industries.

 

From a total spending perspective, discrete manufacturing and transportation will each exceed $150 billion in spending in 2022, making these the two largest industries for IoT spending.

 

From an enterprise use case perspective, vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) solutions will experience the fastest spending growth (29% CAGR) over the forecast period, followed by traffic management and connected vehicle security.

 

The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT spending for 14 technologies across 20 vertical industries in nine regions and 53 countries through 100 use cases.

 

 

Unlike any other research in the industry, this comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT technologies today.

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ALTON Seek Policy Breather for Ailing CDMA

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Association of Licensed Telecommunications Operators of Nigeria (ALTON) has called for policy flexibility in favour of Code Division Multiple Access (CDMA) operators.

 

Engr. Gbenga Adebayo, ALTON Chairman, said in Lagos that the federal government should give the operators access to capital and other incentives to survive.

 

“With the declining CDMA operation in Nigeria, there is urgent need to help the operators remain in business in order to allow for the continuity of their operations, which has cheaper tariff than GSM service,” he said.

 

Adebayo called on telecommunications regulators to revisit the interconnect rate model and give preferential treatment to CDMA operators.

 

CDMA is a wireless communication technology that allows multiple people to use a single radio channel at the same time with little interference and very high security.

 

Adebayo said that CDMA operators still existed and had subscribers but were not as prominent as they used to be. “The fact remains that the choice of technology being used now does not favour CDMA operators,’’ he said.

 

The chairman noted that CDMA lines were mostly used in the country in the past.

 

He said that the use of the CDMA lines was reduced as a result of stiff competition with GSM operators.

 

Adebayo said that GSM operators churned out innovative and exciting products for subscribers and lowered call tariffs and SIM cards, causing decline in the number of subscribers on CDMA network.

 

Adebayo said that GSM operators’ subscriber base had continued to rise to the disadvantage of CDMA operators. According to statistics released by the Nigeria Communications Commission for 2018, active mobile telephone lines in Nigeria rose from 149 million in March to 160 million in April.

 

 

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