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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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NCC, NSCDC Ink Agreement on Telecom Infrastructure Protection

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Nigeria Communication Commission and the Nigeria Security and Civil Defence Corps (NSCDC) on Wednesday in Abuja signed a Memorandum of Understanding (MoU) to protect critical Telecom infrastructure from vandalism and theft.

 

Prof Umar Danbatta, executive vice chairman of NCC signed on behalf of the commission, while Abdulahi Gana, commandant-general of NSCDC signed for his organisation.

 

According to Danbatta, the commission is leveraging on the reach of NSCDC to protect telecom infrastructure.

 

He said that the infrastructure were being damaged and at times it could be unintended due to road construction.

 

The executive vice chairman said that the signing of the MoU had further lend credence to NCC’s commitment to secure the lives of Nigerians wherever they live, as well as protecting telecom infrastructure from vandalism across the country.

 

“We are concerned about this infrastructure and, therefore, we pray that through this partnership with NSCDC they will be protected.

 

“ These centres have been put in place to bring relief to Nigerians in distress.  They are provided to offer emergency services between the people in distress and the emergency agencies.

 

On pre-registered SIM Cards,  Danbatta said  that  NCC  would not allow unscrupulous few among the citizens to use preregistered SIM cards to undermine the security of the country.

 

“We must be seen to be doing everything within our mandate to end the use of unregistered SIM cards and, I want to warn those engaging in it to withdraw or the law will catch up with them.

 

“We will do all we can to make sure they are not in circulation. We have taken some measures, in addition to electronic forms to ensure we give a good example of those who willfully use the preregistered SIM cards to  commit fraud.’’

 

He also appreciated the assistance of the Corps to the protection of the centres which served as inter-face with the people.

 

Earlier, the NSCDC commandant-general,  Abdulahi  said that it was the corps mandate to protect critical national infrastructure, adding that they were ready to provide the equipment, and fire arms to protect the national infrastructure.

 

Gana said that the defence corps has offices not only in the 36 states but in the 774 Local Governments.

 

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Government should provide subsidy for LTE deployment in hinterlands- Adeyeye

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By peter oluka

Following the recent deployment of Fourth Generation Long-Term Evolution (4G LTE) network services in mainly in the cities of Lagos, Abuja and Port Harcourt, there are growing concerns on the inability of telcos and tier two service providers to replicate same feat in the hinterlands.

According to industry expert, Smile Communications with 800 MHz band spectrum operating a 4G LTE licence for nationwide coverage, it has the best spectrum to reach the rural areas.

But the odds against service providers are numerous.

In a recent interview with Nigeria CommunicationsWeek, Mr. OlusolaTeniola, the president of the Association of Telecommunications Companies of Nigeria (ATCON), suggested that reforms are needed in the telecom sector in a way that it identifies the opportunities that exists in truly exploring the emerging digital realm.

Nodding in agreement Mr. Aderemi Adeyeye, president, Enext Wireless Inc., traced the inability of operators to move to the hinterlands to lack of motivation or incentives from the government.

Although, the Nigerian Communications Commission (NCC) through the Universal Service Provision Fund (USPF) has tried to support the operators to meet the needs of the underserved areas, experts are of the view there are still economic bottlenecks facing the operators.

Adeyeye said in an interview with Nigeria CommunicationsWeek, “In my view, a company like Smile Communications, by the nature of its ownership structure, shouldn’t be expected to have a national focus at the present. Yes, they want to deploy services and make money in the process; I mean there is a very little money for them from the rural areas, so they focus on the cosmopolitan areas where they could make money.

“We started our work when only Smile had LTE for deployment in Nigeria. You can see the quality of their network going down because the customer base has increased, but they are not investing in improving the quality. At the early stage Smile stood out in terms of Quality of Service (QoS). In Victoria Island, for instance, it stood out. Now Glo, MTN and other service providers are focused on LTE in VI and you can see Smile’s quality nose-diving.

“When you have limited spectrum and want to attract a lot of customers, you either have to improve on the engineering so that the spectrum could accommodate more customers or you have additional spectrum you could use to service a segment of the customer base.”

“I think currently, they are focused on getting the most out of their current investment because they seem not to be improving on the engineering of the 10 MHz. We could see it from our data. The way Smile could go to the rural areas is if government mandated them, which might not be advisable.

“Also, they could be given subsidy to achieve that purpose. We also have Bitflux which has a bigger spectrum with 30 MHz bandwidth and its license is also nationwide, even though the frequency is high at 2.3 GHz.

But, to Teniola, Nigeria cannot afford to miss the new Industry 4.0 paradigm which dwells, solely, on digitization.

“We needia reform of the telecom sector in a way that it identifies the opportunities that exists in truly exploring the emerging digital realm.

“The funding of all this is a steeple chase hurdle to the realization of this new future and it requires continuous change in the way regulation and policies are formulated.

“Right now, we are undergoing consolidation in the market what we seek are for the Government to react quickly to these changes and adapt as the technology adapts to the new Industry 4.0. paradigm”, he said.

 

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NCC, NSCDC Signs MOU on Critical Telecommunication Infrastructure Protection

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Left to Right: Prof. Umar Garba Danbatta, Executive Vice-Chairman/CEO of Nigerian Communications Commission (NCC); and Abdullahi Gana Muhammadu, Commandant-General of the Nigerian Security and Civil Defence Corps (NSCDC) during the sinning of MOU Yesterday.

Nigerian Communications Commission, NCC, in line with the Board’s commitment towards achieving measurable and remarkable improvement in the quality of telecommunications services in Nigeria, received further concrete expression when the CEO of NCC, Prof. Umar Danbatta and his counterpart at the Nigerian Security and Civil Defence Corps, Abdullahi Muhammadu, signed a Memorandum of Understanding at the head office of the NSCDC yesterday.

The signing of the MOU is the climax of series of meetings, visitations and several discussions between the two organizations that will see greater security and protection provided for telecommunication facilities by the NSCDC’s department of Critical National Infrastructure Protection.

Vandalism and theft of telecom infrastructure and facilities have been central recurring challenges to the attainment of the parameters defining the applicable quality of service standards for specific services in the telecommunication industry in Nigeria.

This year, as part of the efforts of the Commission to ultimately halt the criminalities associated with telecommunication service provision, NCC has organised 6 Zonal Sensitization Workshops for Agencies in the security sector to deepen the understanding of each agency’s role in curbing the crimes undermining the quality of service in the telecom sector.

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