A telecoms expert and the Chief Executive Officer of VDT Communications Limited, Mr. David Omoniyi, has appealed to government to come to the aid of Internet Service Providers (ISPs) in the country. Omoniyi said government intervention was imperative at this period to accelerate the country’s broadband penetration drives. Speaking at a virtual forum organised by the Association of Telecommunications Companies of Nigeria (ATCON), the VDT CEO said the ISPs that could be classified as the small and medium enterprises (SMEs) in the telecoms market were dying by the day.
“Indigenous ISPs are disappearing, more than 200 have been licensed so far by the Nigerian Communications Commission (NCC), but less than 20 of them are operating. They are largely SMEs and need support to survive,” he said. Omoniyi added that the implementation of the National Broadband Plan 2020-2025 required the input of every stakeholder to succeed, hence the ISPs, which play significant roles in taking the services to the last mile must be supported. “We need to carry everybody along and one way is to keep the ISPs alive.
We need the majority of them around to keep employing people and to take the service closer to the people. There is a need for targeted intervention for them to survive,” he added. Aside from the mobile network operators, the ISPs play critical roles in providing lastmile connectivity to people across cities, rural communities, and underserved communities and are key to achieving the country’s target of deepening broadband penetration. However, there had been a slide in the number of active ISPs present in the market, and the scope of services they offer, a situation that has raised serious concerns among industry stakeholders and the regulator. While the number of ISPs in the country had consistently declined over the years, the operators have been blaming the bigger operators, especially the likes of MTN, Globacom, Airtel, and 9mobile for their woes.
The operation of the mobile network operators in the retail data market with cheaper prices is said to be the bane of the ISP businesses. NCC, in a recent study by the Emerging Technologies Research, a unit of its research and development department, acknowledged that licence renewal rate of ISPs in Nigeria continued to drop, even as new firms take up the licence. The researchers, therefore, called for a regulated increase in the prices of data to save the ISPs from dying. According to the study, there is currently a regime of “artificially low data prices” in the market due to stiff competition among the operators.
“To solve the issue of artificially low internet/data prices, a regulated minimum price level has to be put in place by the government and the com-mission, for both big and small telecom operators to compete on the quality of the network and customer services they provide,” the study recommended. In the report of the study titled: “An Exploratory Study on the Challenges and Survivability of ISP Licensees in the Nigerian Telecom Sector,” the researchers said: “In view of the critical need of internet connectivity for the digital economy and mass digitalisation of Nigeria, the role of ISPs is central also for the uptake of the internet of things (IoT).
“The study, therefore, undertook a detailed assessment of the challenges facing ISPs in Nigeria, and these were found to include: competition with MNOs offering ISP services, harsh business environment, inadequate National Broadband Infrastructure.”
Besides, they also identified multiple taxation by different levels of government, and unfavourable conditions for the industry in terms of the disparity between advertised Internet speeds and actual speed obtainable on the networks, inadequate provision of redundancy by ISPs to handle network downtime, and lack of compensation for downtime and poor quality of service, as other challenges facing the ISPs in Nigeria. While noting that there is an urgent need for ISPs to develop business niches, improve their customer base through aggressive marketing as well as identifying the right cost of data purchase, and other sound business that will ensure that continuity, the report said the NCC also needed to ensure the conclusion of the study on costbased pricing determination in Nigeria for retail broadband and data services.