Business

Telecoms: Growing amidst challenges

As Nigeria marked 61 years of independence, stakeholders in the telecommunications sector count the gains and the growth trajectory amidst myriad of challenges that have seen the industry players plead for help on many occasions. SAMSON AKINTARO reports

From the monopolistic Nigeria Telecommunications Limited (NITEL), which was established in 1985, Nigeria gained independence telecommunication- wise through the liberalisation of the sector in 2001. This has helped the country leapfrog from the meagre 450,000 fixed lines back then to now over 187 million active mobile lines and over 140 million internet users. Looking back, Nigeria has, no doubt, made remarkable progress in telecommunications and the use of Information and Communications Technology (ICT) tools in general. Economically, the country continues to gain tremendously in many ways as it boosts the GDP. These have, however, not translated to full independence for the country as far as technology is concerned. The country is known to be fully dependent on imported technologies, despite the increasing efforts of local experts in developing homemade technologies and that has been a disturbing trend that successive administrations have failed to stop.

Contribution to GDP

The Nigerian telecoms market is ranked as the largest and fastestgrowing in Africa and among the 10 fastest-growing telecom markets in the world, an indication of its robustness to return on investments. From a private sector investment of about $50 million in 1999, the telecom industry in Nigeria had, by end of 2017, attracted not less than $70 billion in private sector investments and Foreign Direct Investment (FDI), according to Nigerian Communications Commission (NCC). The Executive Vice Chairman of NCC, Prof Umar Danbatta, who disclosed this recently, said the telecom sector’s contribution to GDP has been growing at about $5 billion every quarter. Over the years, the sector’s contributions to GDP have been on the increase. In the second quarter of this year, for instance, telecommunications contributed 14.42 per cent to the country’s GDP.

Other gains

hairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, while recounting the gains and challenges of the telecoms sec-tor since independence in 1960, said for 41 years from the time Nigeria gained Independence to the time of GSM rollout in 2001, the country was able to connect only 400,000 lines, which he attributed to an era where it was declared by government that telecommunications was the exclusive right of the affluent in the society. “For 41 years of independence, which was before the rollout of GSM services in Nigeria, the country had 400,000 lines, but at 61 years of independence, which was after the rollout of GSM services, Nigeria has over 200 million telephone lines. This means that in the past 20 years, when GSM was rolled out, the Nigerian population has increased and more people now have access to telephone lines. This goes to show that GSM is a tool and bedrock for faster development in the telecoms sector, which other sectors now rely on for growth and development. “In the past 20 years of GSM rollout, telecoms has also added to the country’s Gross Domestic Product (GDP) and it has made great contributions to Nigeria’s economy. “So, we are bold to say that telecommunication has done well and has remained one of the pillars of modern development and economic emancipation of Nigeria,” Adebayo said. He further said that looking inward, it was obvious that ICT had become the future technology that countries must adopt. “Given the foundation, which ICT has enabled, one can quickly say that in another 10 years, Nigeria will be among the comity of nations that will be leading in modern science and development, with telecommunications becoming one of the pilots of such development,” Adebayo noted. According to him, the growth and development that have been enabled by the telecoms sector since independence have been tremendous.

The pains

However, 19 years after telecoms liberalisation, many challenges are still standing in the way of Nigeria harnessing the full potential of telecommunications.
The issue of poor quality of service remains a major headache for most telecoms consumers in the country today and that is a result of several challenges militating against efficient services delivery. Briefing the Senate Committee on Communications recently on some of the issues in the sector, the Executive Vice Chairman of NCC, Prof. Umar Danbatta, cited power as one of the biggest challenges facing telecommunications operations in the country. With the poor power supply from the grid, Danbatta said service providers were spending a huge amount of money on a daily basis to power their base stations. The EVC noted that the issue of multiple regulations and multiple taxations continued to hold the sector back. “The unfair taxes and billing levied on telcos constitute a drawback to infrastructure deployment in the telecoms sector. “However, he said engagements were on-going with different tiers of government and government agencies at federal, state and local government levels,” he said. Other challenges highlighted by the EVC include security issues, theft of equipment, transmission cable cuts, delays in securing approval for sites for new base stations, harassment by some government agencies, especially at the state level, and the issue of Right of Way (RoW).

Quality of service

The ALTON Chairman, Adebayo, noted that though there had been improvement in service quality since 2001, various environmental factors that are beyond the telecoms regulator and operators are still impeding service quality. According to him, “for Nigeria to have unhindered service quality, all critical factors must be looked into, which, he said, include electricity supply, roads, government policies on Right of Ways (RoWs) and multiple taxations.” Adebayo, therefore, advised government not to tax telecoms operations to death, as currently been seen in some states of the federation. Adebayo, who commended the Federal Government for the approval of 5G network rollout in Nigeria, said: “At 61 years of independence, government has made the right decision to approve the policy on 5G rollout for Nigeria. “This is because 5G is the nextgeneration network that will speed up development. Countries without 5G will be stifling their growth and development. So, the approval of 5G rollout in Nigeria by the Federal Executive Council (FEC), which coincides with the 61st independence celebration of Nigeria, is quite significant and this will provide a solid foundation for the future development of ICT in Nigeria.”

Local content still elusive

In the last three years of the current administration, the sector has not been short of the regular rhetoric on local content in ICTs, which has not translated to any meaningful change. With about 200 million population and diverse culture, Nigeria is a veritable market for any product or service and, with that, it is not surprising that the best of technology products from around the world always find their way into the country. Indeed, there is no latest technology anywhere in the world that a Nigerian is not already using and this is why billions of dollars is leaving the country every year on ICT importation. According to the current Minister of Communications and Digital Economy, Dr. Isa Panatami, Nigeria spends $2.8 billion yearly on the importation of ICT products and services. Products being imported include telecommunications, audio and video, computer and related equipment; electronic components, software and many others. Corroborating this, the Director- General of the National Office for Technology Acquisition and Promotion, Dr. Ibrahim DanAzumi, also recently declared, though conservatively, that 90 per cent of technologies being used in Nigeria were imported. Not long ago, the Office for Nigerian Content Development (ONC) in Information and Communications Technology (ICT) also declared that the preference for foreign ICT products and services was causing Nigeria a loss of over N1trillion in foreign exchange yearly.

Government policy

Even though the issue of local content and over-dependence on foreign technologies have always been at the front burner for years, there seems to be no clear-cut policy to change the situation, except for a few government statements and directives that end up disappearing soon after. However, stakeholders are hopeful that the most recent policy on the digital economy and the National Broadband Plan 2020-2025 with offer the country great opportunities to develop local capacities in ICT if well implemented.

Last line

Although several milestones have been recorded in the last 61 years of independence, it is not yet uhuru for Nigeria in telecommunications/ ICT. A lot still needs to be done in terms of policy implementation to address challenges militating against the sector’s growth.

 

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