• Monday, December 04, 2023
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Between the consumer and NCC’s regulation


Over the last decade or so, the Nigerian Communications Commission (NCC) has earned a reputation for itself as one of the foremost regulatory agencies in Africa. Though the Commission was established in 1992, its affairs took a remarkable turn during the tenure of the former executive vice chairman, Ernest Ndukwe, who, buoyed by the liberalisation efforts of the day, successfully charted the course of the Nigerian telecoms landscape today. It is no longer news that under his charge, the Commission pushed the telephone subscriber base from 400,000 lines to over 78 million in less than a decade, attracting $18 billion investment into the telecoms sector. His era freed Nigerians from the throes of NITEL’s inept services and demystified telephone services, hitherto regarded as the sole preserve of the wealthy, making it accessible to all Nigerians.

Within a short period, the sector that used to be subsidised from the Federation Account had added over N300 billion in fees from licensed operators to the same account and the telecom sector began to contribute significantly to the country’s GDP.

Typical of sustainability issues that have plagued the public sector in Nigeria, by the time Ndukwe’s stewardship was over in 2010 through the transition period, the industry made little or no effort to consolidate the achievement recorded in the voice telephony services to deploy broadband services.

Without doubt, it has taken a few years for Ndukwe’s successor, Eugene Juwah, to settle in, but recent regulatory trends in the sector lends credence to the notion that the NCC appears yet again on the right path to bringing succour to consumers’ demand for efficient and affordable telecommunications services, this time around including broadband services. In what most keen industry watchers are beginning to regard as the next phase of ICT revolution in Nigeria, the Juwah-led NCC began by taking a cautious approach in the first two years of his administration to appraise and understand the industry dynamics and its players. The administration has since gone to work with reforms that are beginning to reshape the Nigerian telecommunications markets in favour of consumers.

Signs that the Commission would reform the sector began to emerge when the NCC started to turn on the heat on operators to improve the quality of their services or face sanctions. Latching on well-defined KPIs, the regulator made good its threat when it took an unprecedented step and slammed errant operators with N1.17bn penalty for failure to achieve target network KPIs in 2012. Even as these operators cried foul and engaged in a PR showdown, the regulator held firmly to its position and the fines were paid. The impact of this on the industry is visible from the series of network investments currently being given by the major operators. It is unlikely that these investments would have been made but for the NCC’s intervention, even as it is certain that it was an essential requirement for improving the networks and the quality of their services.

With the fine came a clampdown on frivolous promotions, which had become the order of the day in a bid by the mobile operators to increase market share despite their network facilities’ inability to meet the needs of existing customers. The Commission swung into action by barring operators from further promotion and lotteries until their KPIs, which appeared to have reached an all-time low, recovered to acceptable levels, to ensure that existing consumers receive value for their money.

Not stopping at quality of service, the Commission swiftly sought to address SMS pricing in January 2013 by fixing new rates for domestic Off-Net Short Messaging Service (SMS) at N4, and a few months thereafter slashed interconnect termination rates between operators from N4.90k to N4.40k, with asymmetry in favour of the smaller operators.

April 2013 birthed the long-awaited Mobile Number Portability, a system that offers mobile telecom subscribers the opportunity to move from one network to another without changing their phone numbers. The portability scheme has been lauded as exemplary, and as it is already being reported, would make operators more accountable to individual consumers in a bid to ensure retention on their networks.

Most recently, the NCC released its study on the Determination of Dominance in selected Communications markets in Nigeria. The release followed a series of well-coordinated engagements between the NCC and industry stakeholders, with the involvement of experts as consultants. It unearthed series of market imbalances in the telecommunications sector and determined some of the large mobile operators that are dominant in certain segments of the market, affirming that they also use their dominance to negatively influence the level of competition in the market to the detriment of consumers.

Much as it was already common knowledge that MTN has been dominant in the voice segment of the market by all accounts and regulatory prescriptions, having held more than 40 percent of the market, either by revenue share or subscriber number, for a long time, it took the NCC’s bold leadership to embark on the study and publish its findings to the industry and the general public.

In addition, the NCC study equally declared MTN and Globacom dominant in the leased line transmission market, through their vast ownership of majority of the fibre optic and microwave transmission networks in Nigeria today. Operators, industry experts, and, in fact, government have blamed the near extinction of CDMA operators and the current low level of broadband penetration in the country on the limited access to last mile infrastructure, even though three new submarine cables have landed in Nigeria.

The study uncovered high incidence of failure to share infrastructure by these dominant operators, as well as sharing at exorbitant prices in a few cases where they do, as a key limiting factor to the more effective distribution of broadband services in Nigeria. Once the proposed price cap and price floor that the NCC determination seeks to impose are implemented, and the infrastructure is made available on an open access basis, it should unleash expansion of Internet services to address the current lows in the broadband segment in Nigeria and make such services more affordable for every consumer.

Evidently, the NCC EVC is gradually reviving hope in the Nigerian telecoms sector with his focus on resolving some of the market issues that have for long held the industry back from consolidating the gains made in the early days. At its current pace, NCC is not only ensuring the sustainability of the existing structure, it is also creating a competitive environment capable of promoting additional investment in the sector that will leave consumers with more options for improved services. Above all, it would help rescue Nigerians from the clutches of operators that have for long focused on increasing their profits at the expense of consumers whom they have held hostage with expensive inefficient services.



Omorodion is a telecoms analyst.