How to sustain Nigeria’s $68b telecoms sector, by experts

The Nigerian telecoms sector has indeed witnessed astronomical growth in telephony access and data penetration. Today, active telephone lines are well over 150 million with close to 100 million Nigerians having access to the Internet. The country’s teledensity is put at 109 per cent with investment in the sector put at over $68 billion.

The impact of telecoms sector on other sectors such as banking, e-commerce, agriculture, education, oil and gas and so on and the volume of jobs the sector is creating has been described as unprecedented.

The onerous task to sustaining the growth tempo of the telecom’s sector has therefore, become the responsibility of the entire populace.

Already, the Nigeria Police Force (NPF) has called on communities to see telephony infrastructure in their localities as communal assets. The NPF urged communities to report anybody suspected to be a vandal.

Besides, a telecoms expert, Kehinde Aluko, stressed the fact that the industry must be adequately protected, especially from predators, including government agencies, which see operators as ‘cash cow’ that must be milked to death.

Aluko said virtually all other sectors rely solely on the ICT sector for one level of growth to another. “In fact, it is interesting to know that telecoms operators such as MTN, Globacom, among others have evolved to become large ICT firms, enabling various integrations in the economy.  So, I think, we need to ensure that these firms are protected with right policies. However, that is not to say they should take laws into their hands.”

According to NIBSS, Interswitch, ePayment platforms have all been enabled by the power of telecommunications

To the President, Association of Telecommunications Companies of Nigeria (ATCON), Olushola Teniola, said the sector has contributed and committed $68 billion of capital investment since the liberalisation of the industry in 2001, and this has been achieved using a light-handed regulatory approach.

According to him, as of Q3 2016 q-o-q contribution to GDP averaged around N1.4 trillion with a forecast of a contraction in those numbers in Q4, due to the macroeconomic situation in the country. It is projected to drop in-line with the decrease in consumer spending.

The industry has contributed immensely to other sectors growth and several operators’ Foundations have helped the needy and developed Corporate Social Responsibility (CSR) programmes to assist the more vulnerable and less-advantaged communities across Nigeria.

Citing the case of MTN, which has come under government’s touch light of late, Teniola said the effect of managing or regulating dominant operators in any jurisdiction is never an easy task.

He said for instance in the United Kingdom, OFCOM is imposing some interventions to Broadband pricing at the wholesale level in between OpenReach and Other Licenced operators (OLO) versus BT. So some of the areas being addressed by NCC and the government are very similar to what is happening in other countries where dominance exists in certain markets like the telecommunications industry.

According to him, the regulatory stance taken by NCC has been to act in an ‘ex-post regulatory’ manner (i.e. attempting to control anti-competitive behaviour where it exists).

He stressed that NCC is also trying to clean up the industry in terms of governance, compliance and ensuring smaller operators can survive, including late entrants to this very highly competitive market, adding that the regulator is currently in a balancing act and we look forward to engaging with them to address some of the pertinent issues from reoccurring.

Teniola said there are concerns around how the sector can continue to attract more FDI against the backdrop of where the industry has grown to and the need to ensure a level playing field exists for all private investors who bring in much needed funds for the continued growth of the Nigerian ICT landscape.