• Friday, March 01, 2024
businessday logo

BusinessDay

Pantami-backed bill seen as backdoor to telco regulation

The Association of Telecommunication Companies of Nigeria (ATCON) has written to the Senate Committee on ICT and Cyber Security requesting that the bill for the amendment of the National Information Technology Development Agency (NITDA) Act be repealed.

ATCON represents over 100 operators in the telecommunication industry. The latest petition to the Senate is coming after months of speculation that an uneasy peace has been brewing in the industry as a result of the move to pass the bill actively backed by Isa Ali Pantami, minister of communications and digital economy, among other grievances.

The Senate Committee also received a petition from the Association of Licensed Telecommunications Operators in Nigeria (ALTON), a sister association of ATCON, describing the bill as an overkill on the industry. According to Gbenga Adebayo, chairman of ALTON, to include telecom operators as entities to be regulated by NITDA would amount to multiple regulations as they are currently being regulated by the Nigerian Communications Commission (NCC).

Industry sources said the recourse to the Senate for intervention indicates an escalation and breakdown in the relationship between the minister and operators who have made efforts to use diplomatic means to get the NITDA amendment dropped.

Stakeholders in the telecom industry consider the revised NITDA Bill as an affront on the NCC, as it tends to usurp the powers of the regulator and thereby duplicate policies for the industry.

ATCON’s statement signed by Tony Izuagbe Emoekpere, its president, notes that the passage of the bill possesses great danger to the telecom and ICT industry in Nigeria as it will ultimately lead to loss of confidence by both local and international investors in the telecom and ICT sector.

“The proposed bill allows for takeover of telecom and ICT infrastructure by NITDA based on their determination that they should do that without going through any legal process and that means any private business can be shut down or taken over by NITDA at will. This will destroy investors’ confidence in the sector,” the association said.

ATCON also noted that the bill seeks to turn NITDA from a mere development agency into a regulator, which infringes on the regulatory activities of other regulators including the banking, financial services, insurance, healthcare, commerce, education, agriculture, and telecommunications.

“The bill calls for levy and penalties on industry operators that cut across these other sectors and that will be in direct conflict to the roles of the established regulators in these sectors,” the petition said.

ATCON’s provision also highlights several places where the NITDA amendment bill replicates the responsibilities of the Communications Act.

Prior to his appointment as minister of communications and digital economy in 2019, Pantami was the director general of NITDA. Following his appointment as minister, Pantami appointed his Technical Assistant, Inuwa Kashifu Abdullahi, as new head of NITDA and has actively pushed to elevate the position of the agency as a regulator.

Last week, Pantami announced that the government has passed a nationwide blockchain policy with the aim of institutionalising blockchain technology in the economic and security sectors of the country. NITDA was given sweeping powers to develop a regulatory tool and also coordinate the National Steering Council. The regulatory power will mean that regulators like the Securities and Exchange Commission, the Central Bank of Nigeria (CBN) and any other regulator that interfaces with any aspect of the blockchain industry and sits on the steering council now reports to NITDA.

NITDA is also coordinating the implementation of the country’s cybersecurity framework. The NITDA amendment bill will confer on the agency the regulatory powers for cybersecurity. The release and implementation of the National Data Protection Regulations already positions the agency as the go to for everything data privacy regulations.

According to multiple sources, there is a long list of grievances the telcos have against the minister. Aside from perceived bias in his appointments in departments across the ministry, many of operators are yet to forget the manner in which Pantami handled the SIM card registration ban in 2020, which wiped off subscription gains the industry made as well as eroded their profits. Recently, the operators also faulted the public support Pantami gave to Starlink, a satellite internet company owned by Elon Musk.

The minister had noted in January that the licensing of Starlink meant that the industry had achieved 100 percent coverage, surpassing the target of 90 percent in the National Broadband Plan (2020-2025).

“Based on the National Broadband Plan, we were to have 90 percent broadband coverage by December 2025,” Pantami said. “However, we recently gave a licence to Starlink to provide services and this has given us 100 percent coverage, about 3 years ahead of schedule.”

Starlink hardware and shipping come at a cost of N276,000 ($600). The monthly subscription is pegged at N19,780 ($43), making it the most expensive internet service in the country.

A telecom executive who would not want to be named said it is disappointing that the minister would prioritise a deal with an entity which has no physical presence in Nigeria and therefore contributes very little to the economy of the country in terms of jobs and tax revenues, over fixing the many bottlenecks that have bedeviled the telecom sector for many years.

Read also: Proposed NITDA Act amendment: We should empower digital economy, not create confusion

Many people consider the cost of setting up Starlink very pricey at least for millions of Nigerians who live in multidimensional poverty. Apart from the cost of acquiring the hardware and shipping, a month subscription at N19,780 is mostly out of reach for millions of poor Nigerians. The Keza deal, however, allows subscribers to pay in installments.

“So where did Pantami get his 100 percent penetration from? If millions of Nigerians cannot afford Starlink, that leaves the telcos to carry them and we all know what the current penetration rate is,” said the stakeholder.

Telcos are not the only group kicking against the NITDA amendment bill. Tech startup founders and the Nigerian Bar Association Section on Business Law have also expressed misgivings with some of the provisions of the bill.

A major headache for these players is the NITDA Fund, which will be used for the “advancement of digital economy and related purposes”. Experts say the problem is not with the purpose of the fund, but with the constitution of the fund. In subsection (a), the bill states that all companies with annual turnovers over N100 million ($240,000) will be required to pay an annual levy worth 1 percent of their profit before tax.

The argument is that companies with N100 million in turnovers haven’t necessarily broken even. Most of them are bootstrapping or fund-raising in their first few years, and whatever profit they make is crucial to their survival. The levy also places an onerous burden on these startups, especially with startups already paying tax to other agencies.

According to some telco sources, passing the NITDA bill presents Pantami the opportunity to finally relegate Umar Garba Danbatta, the executive vice chairman (EVC) of the NCC. Sources in the Aso Rock Villa said the minister had the opportunity to sack the EVC in 2020. Pantami had omitted the name of the Danbatta, who was nearing the end of his tenure. President Muhammadu Buhari, who noticed the omission, requested that the name be included on the list.