Telecommunications operators in Nigeria have been told by the Nigerian Communications Commission (NCC) to consider restructuring their business models in order to survive in Nigeria’s complex operating environment.
The telecoms regulator says it has become apparent that businesses can only thrive when service providers tap into opportunities by restructuring and providing value for changing consumer needs.
Speaking at the Vanguard Economy Forum on Telecoms, held in Lagos Wednesday, Umar Garba Danbatta, executive vice chairman, NCC, who was represented by Bako Wakil, the head, technical standards and network integrity, NCC, said that the telecommunications industry is currently experiencing dynamics in terms of infrastructure investment and industry growth.
In line with the theme of the forum, ”Unlocking the Revenue and Growth Opportunities in the Telecoms Sector in a Changing Business Model and Digital Technology Environment: Role of Regulator, Operators and OTT Service Providers,” Danbatta said it was high time that telecommunications service providers focused more on quality data provision rather than traditional voice services in order to record increased revenues.
”Voice revenues are in decline and profits are also suffering from decreasing termination rates in many jurisdictions.
”Over-The-Top (OTT) services such as WhatsApp, Snapchat, Facebook, Messenger and Skype are fast replacing traditional voice and SMS as the primary method of communication for consumers.
”The business environment is becoming more complex, and the business models that were created in the past are no longer sustainable as telecommunications companies are presently seeing the gradual erosion of their average revenues per user (ARPU ).
”As a result of the increasing complexity of the operating environment of our industry, telecommunications companies who grew on the back of traditional voice and data traffic are realising that value is moving into other stages in the telecommunications ecosystem.
”The value is moving into completely different markets as consumption patterns change and these consumption patterns are changing rapidly,” Danbatta said.
Experts unanimously agreed that it was necessary for industry players like Telcos, vendors and Value Added Service (VAS) licensees to consider taking steps to change their business models in line with current and forecasted industry trends as may be required.
”In order to remain in business and thrive, there is need for telecommunications companies and vendors to think outside the box and create innovative partnership and low cost business models with themselves and other players in the business ecosystem.
”This will create a win-win situation for all players and enable them to remain in business and thrive despite the industry’s complexities,” Danbatta added.
Also speaking at the Forum, Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said that the telecommunications sector is the backbone for other critical industries to grow and should be regarded as such.
Addressing the threat by the Nigerian Civil Aviation Authority (NCAA) to shut down telecom masts across the country, Adebayo said that Nigeria has forgotten that telecoms remains infrastructure of infrastructure because other sectors including aviation, banking, health, transport rely on ICT to drive their operations, “when critical telecoms infrastructure is attacked, the economy and the people will feel the impact negatively. Blackout becomes imminent,” he said.
ALTON described the move by NCAA as another way to impose unwarranted taxes on the sector, which is already over burdened with multiple taxation.
On SIM card registration, Adebayo admonished the Nigerian Communications Commission for faulting SIM registration done by Mobile Network Operators (MNOs).
Adebayo said NCC would still need to do more explanations because “operators duly followed the procedures, standards and protocols handed the operators at the commencement of the exercise.
