Telecom
Regulatory Imperatives for Sustaining the Revolution in the Communications Sector
By Tony Ojobo
The telecommunications industry has undoubtedly witnessed tremendous growth and development in Nigeria. It is a sector that directly impacts every aspect of human life, business, education, governance, family, entertainment, etc. Growth in the industry was slow for several years after Nigerian Independence.
The total telephone subscriptions from Independence in 1960 to 2001 was a paltry 400,000 connected analogue lines, translating to a teledensity of 0.04%. This number of telephone lines was considered inadequate for a population of 126.2 million in 2001, according to the World Bank, when the Nigerian Communications Commission (NCC) licensed the Digital Mobile Operators.
Before the advent of digital mobile service in the country, applicants for telephone lines waited for years to get a telephone line. The waiting time in some cases was up to ten years. Customers who needed to make international calls went to the international call centre at NECOM House Marina, Lagos, to make such international calls.
As a young Commercial officer in the Nigerian External Telecommunications (NET) Limited in 1982, I witnessed parents from different parts of the country come to NECOM House on Marina, Lagos, to make international calls to their wards overseas. NET Limited Call centre was one of the few locations where customers could make international calls. The only exceptions were some embassies, oil companies and international banks, and a few individuals with International Direct Dialing (IDD) and Alternate Voice and Data (AVD) services.
Generation Zs (people born between 1981 – 1990) and Generation Alpha (born between 2010 – 2020) would find this amusing; it sounds more like a fairy tale. Yes, those were the days we were still in the dark. The situation persisted even after the emergence of the Nigerian Telecommunications Limited (NITEL) in 1985. The military government formed NITEL through the merger of Posts and Telecommunications (P&T), responsible for domestic/national telecommunications services, with NET Limited, responsible for international telecommunications services.
I can vividly recall that at NITEL, Shomolu Exchange, where I was the Business office Manager, the organization processed applications under what was then known as “Capital contribution”, a scheme where applicants contributed various sums of money, depending on location, to get NITEL services extended to their homes and offices.
In realization of the challenges, and the inability of NITEL, as a monopoly, to provide enough telephone services in the country, the then Military government promulgated Decree 75 of 1992, establishing the Nigerian Communications Commission (NCC) as the industry regulator for telecommunications. The establishment of the NCC set the pace for the deregulation of the sector—the then Minister of Communications’ Engr. Olawale Ige played a vital role in the deregulation exercise. Engr. Ige in the year 2000, eventually became a member of the Board of Commissioners at the NCC.
The Decree specified the following, among others, as the functions of the NCC. Facilitate investments in and entry into the Nigerian market, protect and promote the interest of consumers against unfair practices, and ensure that licensees implement and operate the most efficient and accurate billing system at all times. Other functions include:
- Promoting fair competition in the communications industry.
- Protecting communications services facilities.
- Preventing service providers from misusing market power or anti-competitive and unfair practices, among others.
The Decree further stated the objectives of the Commission to include the promotion and implementation of the national telecommunications policy, establish the regulatory framework for the Nigerian Communications industry and promote the provision of modern, universal, efficient, reliable, affordable, and easily accessible communication services. Some other objectives mandate the Commission to encourage local and foreign investments in the Nigerian communications industry, introduce innovative services and practices in the sector, encourage fair competition, and promote Nigerian participation in the ownership, control, and management of communication companies and organizations.
The Nigerian Communications Act set the above objectives to ensure a vibrant communications sector, with functions and purposes necessary for a potent independent regulator. Industry watchers believe that the Commission’s performance in regulating the industry depends on its ability to align actions with the objectives.
At the return of democratic governance in 1999, the government of President Olusegun Obasanjo was keen on transforming the communications sector. President Obasanjo personally invited investors to invest in the industry during his diplomatic shuttles. Nigeria was smarting from the effect of military governance.
The developed countries were still uncertain of the safety of investments in the country due to prolonged military rule. Some major global telecommunications companies, like Vodafone and others, spurned the invitation, showing a lack of interest in the Nigerian telecommunications market. The international community still viewed the country as a pariah at that time.
Despite the lukewarm attitude received from some international investors, the government was determined to confront these challenges. In a demonstration of its commitment, a Board of Commissioners was constituted for the Nigerian Communications Commission, Chaired by a renowned technocrat, Alhaji Ahmed Joda, and the former President of the Association of Telecommunications Companies of Nigeria (ATCON), a technocrat, an astute engineer, Dr Ernest Ndukwe, FNSE, as the Executive Vice-Chairman and Chief Executive of the Commission. The other members of the Board were Engr. Olawale Ige, former Minister of Communications, Austine Otiji, former MD of NITEL, Engr. Patrick Kentebe, Engr. Shola Taylor, Engr. Isaiah Mohammed, Engr. Zimit, Engr. Don. Udeh, among others.
Ahmed Joda’s Board understood the enormity of the responsibility placed on them and set out to build one of the most respected regulatory bodies in the world. The Board embarked on extensive consultations worldwide with regulators such as the Federal Communications Commission (FCC) in the United States of America and other regulatory bodies worldwide. The Commission also approached the World Bank for assistance and support. It engaged the services of consultants such as Deloitte & Touché, Detecon GmB of Germany, USAID, and Growing Businesses Foundation, among others, to assist with building a strong, independent regulatory body for the communications sector.
Two critical objectives to address were (i) the need for institutional strengthening through the adoption of an appropriate organizational structure and (ii) the engagement of the proper fit of professionals to implement the organizational objectives.
The Board enjoyed the government’s support, which allowed it to operate freely without interference. President Obasanjo’s government respected the regulator’s Independence and did not interfere directly in its regulatory functions. The government of the day had the political will to build a solid and vibrant communications industry.
It neither interfered with the Commission’s recruitment processes nor the regulatory functions of the Commission. The Communications Committees in the National Assembly were very professional and thorough with their oversight functions. All these contributed to the birth of a potent, vibrant, independent regulator.
Topmost on the agenda of the Commission was the licensing of operators to provide services to Nigerians, who long desired communication services. The Board engaged the services Spectrum International Consulting Limited of UK as the Consultant to advise on the appropriate auction method for the spectrum licenses. Simultaneously the Commission was addressing the institutional strengthening, spectrum auction methodology, and engagement of competent human capital to deliver on the mandate.
Some of the factors that contributed to the success of the various exercises in the Commission include the political will on the part of the federal government to transform the sector, the professionalism of the Board of Commissioners, focused leadership, clarity of vision, and an understanding of the assignment, selfless leadership, a commitment to hiring the best hands, and desire to succeed. To remain a professional regulatory body, the Commission should maintain these tested virtues in its regulatory processes.
The organization must ensure that responsibilities are clear and competence is recognized. The Commission should maintain the six core values of integrity, excellence, professionalism, responsiveness, innovation, and commitment in its oversight of the communications sector.
There is a need to underscore the point that recruitment processes should take cognizance of people who possess the required fit for the job. When regulators compromise on getting the right persons for the job, it leads to a decline in standards and effectiveness.
The actions of the supervising Ministry should not in any way undermine the Independence of the regulator. The Commission should be professional in handling matters that could compromise its Independence and thus weaken the organization’s ability to regulate the sector effectively.
The current data from the communications regulator shows the sector’s growth level. The subscriber base for mobile services as of June 2023 is 223,338,215. Fixed wired/wireless services, 96,913, VoIP 228,553, bringing the total number of subscribers to 223,663,521. Recently the Commission licensed 25 Mobile Virtual Network Operators (MVNO) to provide services in the country.
These new licenses issued by the regulator further underscore the maturity of the sector and the opportunities that abound. The revolution in the Fintech space, education, commerce, agriculture, health, security, and entertainment, all enabled by internet technology, cannot be over-emphasized.
The e-enablement in these sectors requires that the regulator should not be hindered from performing its functions. The telecommunications sector, a sub-sector of the ICT sector, which contributed 14.13% to GDP, out of the 17.47% for the entire ICT sector collectively in Q1 2023, should be given its flowers.
The imperative of sustaining these significant milestones in the communication industry is critical. The 22 years of mobile communications in Nigeria have improved the quality of life in commerce, education, security, health, entertainment etc. Digital technology’s impact on Nigerians’ standard of living cannot be over-emphasized. Imagine banking without the internet, the services of online stores such as Konga, Jumia and others.
The introduction of hailing services like Uber, Bolt, and others. What of payment platforms for online transactions, mobile banking, and e-enabled services? There are just too many businesses piggybacking on digital technology. These have happened because the organization’s Board, management and staff laid a solid foundation 22 years ago. The subsequent Boards, management and staff of the Nigerian Communications Commission should continue to build on the labour of these heroes of digital Nigeria.
Sustaining the gains made so far in the sector is the responsibility of all stakeholders, especially the regulator. The revolution in the digital technology space must continue unabated.
Tony Ojobo, PhD, former Director of Public Affairs, Nigerian Communications Commission, and President African ICT Foundation wrote from Abuja
Global spending on telecommunications and pay-TV services will reach $1,544 billion in 2024, representing an increase of 2.4 per cent year-on-year, according to the Worldwide Semiannual Telecom Services Tracker published by International Data Corporation (IDC).
The latest prediction is 1.0 percentage points higher than the version published in the May edition of IDC’s Tracker.
If that forecast becomes reality, the above-mentioned annual growth rate would be the highest recorded in the last twelve years.
The above-average positive revisions of the forecast apply to the regions of the Middle East and Africa (MEA) and Latin America.
This is mainly a consequence of hyperinflation in countries such as Turkey, Egypt, Nigeria and Argentina, in which it has become usual to see average revenue per user (ARPU) figures growing by more than 50 per cent on a yearly basis.
Conversely, the outlook for the markets of Europe and Asia Pacific has been slightly downgraded, mainly due to the deteriorating economic climate in key countries such as Germany and China.
The expectations for the North America have not changed much between the two tracker updates, apart from a minor positive revision in Canada’s market.
The analysis by type of telecom services confirms that the well-known trends persist despite the changes in top-line forecasts.
Mobile remains the largest segment, driven by the growth in mobile data usage and M2M applications, which is offsetting declines in spending on mobile voice and messaging services.
The fixed data services segment will continue growing, driven by the need for higher bandwidth. Spending on fixed voice services will be dropping over the forecast period as the rapidly declining TDM voice revenues are not being offset by the increase in IP voice.
The traditional pay-TV market will decline slightly over the forecast period due to the growing popularity of VoD and OTT, but these services will remain an important part of the multi-play offerings of telecom providers across the world.
The global connectivity services market is expected to maintain a positive outlook over the next five years, with a compound annual growth rate (CAGR) of 2 per cent.
The overall economic climate is expected to improve as the key central banks in the US and Europe will continue decreasing their reference interest rates.
Inflation will continue declining, which will have a positive impact on the purchasing power of the population.
The negative elements of the forecasting puzzle will include saturation of the telecom services markets in major countries, as well as the unstable political situation in some regions, particularly Eastern Europe and the Middle East.
Additional risks are related to the potential shifts of economic policies related to the new US government that might lead to the rebirth of protectionism.
IDC’s latest forecast is more optimistic than its previous one. However, even in this scenario, the growth of the connectivity services market is expected to remain sluggish, prompting operators to seek additional revenue streams.
“There are quite a few promising areas in which operators could expect solid returns. These include fibre optics, IoT, UCaaS, SD-WAN, digital services, LEO satellite services, cloud services, IT security services, network APIs and network sharing, and 5G-advanced,” commented Kresimir Alic, research director with Worldwide Telecom Services at IDC.
“These companies should also increase the pace of digitalisation and software-isation of their business processes, create new go-to-market strategies based on data and intelligence, and deploy innovative business models based on telco-as-a-platform and co-creation within ecosystems.
“Essentially, telecom operators should aim for a complete transformation — from traditional commodity service providers to modern, full-stack technology suppliers. This transformation should position them as leaders in the digital transformation revolution, potentially securing a central role in the new digitalised world,” Alic concluded.
MTN, Africa’s biggest mobile operator, is exploring partnerships with low-Earth-orbit satellite providers to bring internet connection to rural and remote customers in particular, according to Ralph Mupita, CEO of the group.
LEO satellites provide high-speed internet even in areas where terrestrial telecommunications infrastructure such as fibre and mobile broadband is difficult and expensive to deploy.
“To keep customers and businesses connected at all times, we’re going to have to embrace satellite as an additional technology form,” Mupita stated.
He said South Africa-based MTN was carrying out proof of concepts with several LEO satellite operators for possible partnerships.
“We are exploring several, and actually some of them we’re happy to be resellers through our enterprise business to some of our customers in specific countries,” Mupita said.
Reuters reported that MTN is not alone in seeking out partnership agreements. Smaller rival Cell C is doing the same.
South Africa’s biggest operator, Vodacom, majority owned by Britain’s Vodafone, announced a partnership with Amazon’s Project Kuiper LEO satellite last year.
“We’re very aware of the challenges of having to compete as a fixed and wireless operator with LEO satellites over time, so we’re arranging ourselves to be able to sure-proof our businesses in our key markets,” Mupita said.
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In the lead up to Anambra Innovation Week 2024, in a landmark collaboration poised to position Anambra State as Africa’s Silicon Valley, the United Nations Development Programme (UNDP) has partnered with the Anambra State Government through the Solution Innovation District (SID) to establish a cutting-edge Makerspace.
L-r: Ms. Elsie G Attafuah, United Nations Development Programme Resident Representative in Nigeria; Professor Charles Chukwuma Soludo,CFR; Chinwe Okoli, Special Adviser to Governor Soludo on Innovation and Business Incubation, and Christian Udechukwu, Commissioner for Industry, Anambra State, at the foundation laying ceremony for Anambra Innovation Marketplace.
This event was officiated by the Governor of Anambra State, Professor Charles Chukwuma Soludo, CFR and the United Nations Development Programme Resident Representative in Nigeria, Ms. Elsie G Attafuah.
This initiative aligns with Governor Charles Chukwuma Soludo’s visionary agenda of “Everything Technology, Technology Everywhere” and aims to empower youth, drive innovation, and foster economic growth across the state.
The Makerspace in Awka is designed to democratize access to entrepreneurship and technological innovation. It will create pathways for improved livelihoods by providing young people with the resources, skills, and collaborative environments to bring their ideas to life.
The Anambra Makerspace, strategically located in Awka, will prioritize inclusivity, with special programs tailored for young women, persons with disabilities, individuals with low literacy skills, and youth in underserved areas.
Speaking during the launch of the Makerspace, His Excellency Professor Chukwuma Charles Soludo, the Executive Governor of Anambra State stated that, This Makerspace will unlock new opportunities, drive economic growth, and empower local talent. Through collaborative partnerships such as the UNDP, we will pave the way for innovation.
I believe that technology is the bridge to a prosperous future, and we are immensely delighted to embark on this journey with UNDP. Our long-term vision is to raise a powerful Anambra Digital Tribe who will drive economic transformation through innovation, position Anambra as Africa’s Silicon Valley and make a significant impact on the global stage.
The value of Anambra’s Makerspace’s in entrepreneurship development is multifaceted.
The Makerspace will provide young entrepreneurs with the tools and resources needed to turn ideas into tangible prototypes, facilitating the testing and refinement of products. Breaking barriers to innovation, the space enables entrepreneurs to experiment and iterate without significant upfront costs. Thus, entrepreneurs are equipped with the resources to ignite ideas, permitting prototyping, testing and refinement of products.
What’s more, the Makerspace is forward-looking and promotes technological know-how through offering trainings and workshops, enabling skill refinement and keeping entrepreneurs abreast with emerging technologies.
In her remarks, Ms. Elsie G. Attafuah, UNDP Resident Representative expressed that the groundbreaking ceremony was “A landmark for young entrepreneurs, artisans, and innovators of the state and region at large.” Furthermore, she reflected on the significance of Nigeria’s youthful population, expressing that its talented youth are an invaluable asset and “The ability to create and innovate locally is not just a matter of choice; it is essential for economic resilience and growth.” Ms. Attafuah acknowledged the support of the Anambra state government and private sector partners, dedicated to ensuring the Makerspace remains sustainable, accessible, and impactful.
She extended gratitude to the Mastercard Foundation for its support in the establishment of the Makerspaces. Redefining entrepreneurship, Ms. Attafuah stated that, “The Makerspace puts young women, persons with disabilities, persons with low literacy skills and those living in non-urban areas at the forefront, for economic growth synonymous with social progress – leaving no one behind.”
The Makerspace is a launchpad for ideas that address real-state challenges extending to wider challenges of the nation. As such this space will bridge the gap between education and employability, enhancing the quality of life for all who live in Anambra and Nigeria. Empowering communities and preserving Nigeria’s rich culture, the space blends art, technology, and local craftsmanship, igniting creative capabilities in the region.
The Special Adviser to Governor Soludo on Innovation and Business Incubation, Chinwe Okoli, expressed enthusiasm for the partnership:
“We are immensely delighted to have UNDP support Mr. Governor’s vision for the Solution Innovation District as we continue to build the Anambra Innovation Ecosystem. The Solution Innovation District is designed to attract opportunities like this from leading institutions, further cementing Anambra’s position as a hub for innovation and creativity.”
She highlighted the Makerspace’s cutting-edge features, stating, “The facility will be equipped for robotics, textiles, and electronics, with dedicated sections for design, prototyping, and advanced technological experimentation.
“It will also include collaborative zones for brainstorming, ideation, and project pitching. Importantly, the Makerspace will integrate designs that celebrate Anambra’s rich heritage while meeting global standards.”
The project stems from the UNDP-Anambra Stakeholders Meeting on Digital Transformation and Tech Development held in August 2024.
This strategic dialogue highlighted critical gaps in the state’s innovation ecosystem, particularly within tertiary institutions, and laid the foundation for this transformative partnership.
The Makerspace will bridge these gaps by fostering collaboration among academia, industry, and government while serving as a launchpad for the commercialization of groundbreaking ideas.
The Makerspace will incorporate green building materials, energy-efficient systems, and sustainable waste management practices. By involving local youth and artisans in its design, construction, and operations, the project not only nurtures local talent but also reinforces its commitment to environmental stewardship and community ownership.
The Makerspace is a highlight of the upcoming Anambra Innovation Week 2024, scheduled for November 25–29, 2024. This event celebrates the state’s remarkable strides in technology and innovation under the theme “Creating the Future of Africa Now” serving as a premier platform to showcase and celebrate Africa’s dynamic innovation ecosystem.
The Makerspace aligns seamlessly with the vision to position Anambra as a regional leader in technology, entrepreneurship, and creativity. Local firms will lead the remodeling, repurposing, and furnishing of the facility, which is set to become fully operational within six months.
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