‘Nigeria needs to start preparing for next decade of telecoms revolution’
GBENGA ADEBAYO is the Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), the telecoms industry umbrella body. Adebayo, who has been in the sector since the telecommunications revolution began 20 years ago, in this interview, gave a vivid description of how the sector has fared thus far and the need to prepare for the future. ADEYEMI ADEPETUN reports
How far have we gone with the telecom revolution, which is two decades now?
I think it will be more appropriate today to talk about mobile communication because technology has transformed over the years. We have done very well. The industry has done in all modesty, excellently well. And I think the country has done extremely well too. Not just by the way we accepted the use of GSM but by the way, we have taken joint ownership of mobile services.
Today, it has become what I would call our Commonwealth. The other day, there was a joke that if you are leaving the home in the morning, you have to decide what to leave behind between your wallet and mobile phone. Without thinking too much, you will vote to leave behind your wallet and take a mobile phone. That is just how dependent we have been on mobile communications services. And I do not see how the world will be today without mobile services, I do not see how the country will run today without mobile services.
Therefore, the industry has done very well. The country has done very well. All stakeholders are doing very well. And we are glad to say today that we are in the leading committee of nations in terms of development. Today, the story of GSM evolution is not complete anywhere in the world without reference to the rapid development of communications in Africa, particularly telecommunications in Nigeria.
You may recall that it was before 2001, GSM licenses were granted, but it was only in 2000/2001 that the government had a political will to make it happen. And ever since then, I can say the wheel has been turning at the right speed and place. We are thankful for the significant and positive impact that mobile services have had on our lives.
Since 2010, we have been made to understand that investment in the sector is about $75 billion, but by now, we expect that the figure should have increased. What is the level of investment now?
CERTAINLY, and without taking it too far, I would say we should be quadruple of that by now. The reason is that by 2010, the world hasn’t become fully digitalised. But today, not only is the world digitalised but Nigeria also. Everything we look at today, from the perspective of mobile communications, both in terms of commerce, in terms of import, export and the rest of them.
I would not like to guess because I do not have the data (I think it is best to confirm the number from NCC or the Federal Bureau of Statistics).
However, from where I sit, I will say the impact we have had has gone into several multiples since 2015, in terms of job creation, Foreign Direct Investment (FDI), contribution to the GDP, safety, security, and commerce. Looking at it from all sides, mobile services have had a tremendous impact, both in income and in earnings on the entire economy.
Recently in the neighbourhood where I live, they came to replace the electricity meters by bringing 1000 prepaid meters to the area. This depicts that the days of coming to read electric meters have gone, the days of buying recharge cards for electric meters are now here because of the advancement technology has brought. You can recharge your power using a mobile app. That’s a significant transformation. So, not only is it more transparent, it is cleaner and also easier for everybody. And that is the power of technology revolution.
So, other than what we do want to do as a sector, other sectors are now dependent on telecommunications. Today, the power sector, maritime, transportation, and airlines depend on telecommunications. Basically, I think the only significant driver of all our economy today is telecommunication services. And by that, not only are we saying what we have brought in terms of foreign direct investment, GDP contributions. We also need to see the impact of telecoms services on the earnings of those other sectors.
I cannot remember when I last visited the banking hall, but I do transactions every day. So you can imagine without telecommunication services how that will be. So, in recording the impact and the earnings from our sector, we also need to take into account what are the earnings from those sub-sectors that are dependent on the use of telecommunication services for which telecom operators have had a significant impact on their contribution to the economy. We need to start preparing for the next decades of this revolution.
From the regulatory standpoint, when GSM was rolled out in 2001, the regulator gave five years exclusivity to make them roll out and get their ideas together. How effective was that exclusivity?
THE exclusivity did three things because while operators had exclusivity for five years, they also had obligations against that exclusivity, including the fact that regulators then told us, “we don’t want briefcase operators, we want people with physical infrastructure.” And that is why in the early days when you find mast of operator A, you will find in the same neighbourhood, mast belonging to operator B. Not because they wanted to duplicate the efforts, but there was a regulatory requirement that you must have a physical infrastructure.
Aside from that, part of the conditions was proof of deployment, that indeed you have a national license and national coverage.
In the beginning, NITEL was supposed to provide transmission for the operators. They were licensed as mobile network operators. But the backbone was meant to be provided by the national carrier, NITEL. So, it was also an attempt to make NITEL come into relevance. Many years later, Globacom was also given a Second National Operator license.
But you see, as technology evolved and as operators showed performance in their operation to the regulator, those limitations were removed. This is because it might be that you have an operator present in Lagos, who has good service within Lagos, because the city is a local area for him. When he takes that transmission from Lagos to Abuja, for example, it will be difficult to link to that network because he has to depend on a third party to carry the traffic.
To remove the bottlenecks and as operators fulfill their obligations, those regulatory interventions that were seen as barriers were lifted. This then means that operators could then carry their traffic from one city to another at 100 per cent. So without the exclusivity, the growth that we had may not be as rapid as it was. We must commend the regulators because they saw the barriers and acted fast to remove them through regulatory frameworks. They saw those regulations that would be like a clog in the wheel of progress and they removed them. In recent years, to overcome congestion, national rolling was considered so that if you have coverage in a place, and don’t have enough capacity, you can roll.
So, all of these are things that were in the mix that helped the development of the sector so rapidly over the last 20 years. So if you look at the progress we have made from nothing to over 200 million subscribers, it has been a function of many things – technology, regulation, policy, investment, protection, and all that. However, we haven’t gone this far without our challenges. Some of them are still there till today. These include multiple taxation, over regulation, vandalism, high Right of Way charges by state actors, erratic power supply, among others.
As a telecoms body, what are the challenges you have encountered to make sure that telecom operators stand their ground while providing good services for subscribers?
I am thankful to God and everyone, particularly my colleagues from the West and South. ALTON has been here from the first day. And I think for me as an individual, I’ve been in the sector from the very first day. It’s been many battles.
First was the battle of interconnectivity. ALTON came as a result of the peculiarities of the problems that the industry faced. The earlier group before us was ATCON representing everybody’s interest. But we identified that there were particular problems we have as network operators that are peculiar to us and we can only solve those problems ourselves. That brought ALTON up. It has been battles over battles.
NITEL was the all-in-all – the regulator, operator, transmission company, and everything. And for operators in the early days to connect with NITEL, which is an access point between us, we have to pay for those links to get connected. Remember in the early days, a lot of reports were mentioned about the non-availability of E1. It was so bad that if you don’t have the right connection, you can have enough capacity as you exchange but if you don’t have the connectivity to the connector through NITEL, you can’t do anything.
And it was so bad that NITEL, despite government support, budget and extra budget allocation on a yearly basis, private operators had to build private telecom operators’ rooms at NITEL exchange. We paid for building the structure, and we bought the equipment ourselves. And when you need access for maintenance to that site or location, you have to go to Abuja to obtain the permit to access the site, which you paid for. In truth, the private telecoms operators’ room is still there in Lagos and Abuja. Some of the early operators still have their equipment abandoned in those facilities. So, the first battle was that of E1.
When NITEL did the transformation from analogue to digital, they had what they call MFCR2 signal, which was the protocol by which the various exchanges see one another. The International Telecommunications Union came and introduced signal number seven (SSL7) and NITEL had all their equipment on MFCR2. So, with this MFCR signaling, we cannot connect with third party equipment., because lot of the systems we bought in the early days were SSL7 compatible, so we have to invest in the signal converter to take NITEL MFCR2 to convert to SSL7 to be able to see NITEL. Guess what, we paid for converting. Even though NITEL required the converters, operators had to pay for the signaling converters before they could access it. You will pay for the converter, the PTO, and E1 to connect to NITEL and then they send you a bill for E1 and God help you not to pay before 30 days, you will be disconnected.
Also, NITEL will not allow us as operators to connect among ourselves. So, in essence, operators A, B, C connecting from the room in NITEL through NITEL becomes an issue. And we said to them, link to you, we don’t have. E1, we don’t have, we have systems that are compatible as operators, allowing us to connect among ourselves, NITEL refused. When you send signals through NITEL from operator A to operator B, you will pay everything to NITEL. Now there would be a commission for the traffic. When NITEL sends traffic onto your network, in essence, when somebody from the NITEL network calls into yours, you don’t receive anything.
So, when you route through them, a link you have paid for, equipment and transmission you have paid for, the transmission you have paid for when you send the network to them, you pay a commission for a reason. When they send signals to you, they pay nothing. Those were some of the battles we fought. ALTON took the stand that for the industry to survive, these barriers introduced by NITEL and others must be removed, and we won.
We have so many unconnected parts of the country because of Right of Way (ROW) and others. What is the state of things now?
Well, ROW at some point became a big problem. At a particular time of this evolution, when you do a fibre deployment, the cost of ROW was as high as 70 per cent of the project cost. So we will take all the elements, excavation, the fibre optic cable itself, backfilling, laying and refilling. When you take all the elements of work to be done, ROW alone, translated to 70 per cent of the total cost.
At a particular period, when we had all the submarine cable in the Atlantic, it was cheaper to buy bandwidth from Canary Island in London than in Lagos due to the high cost of ROW. Thankfully, some of these challenges are now open to the government, and are being resolved at the highest level of the National Economic Council (NEC) and I think some six years ago, they saw the wisdom in our constant advocacy, such that instead of charging N10, 000 per lineal meter, NEC decided that the fair rate is N145 per lineal metre and it was adjusted.
We are grateful to the Minister of Communications and Digital Economy, Dr. Isa Pantami and the Executive Vice Chairman, NCC, Prof. Umar Danbatta. They have gone on extensive road shows to ensure that that federal recommendation is adopted by states. And now we have states, which are even giving ROW for free, some for just a budget head of N1 per linear metre. Some states are still adamant because of the Internally Generated Revenue target; they are seeing telecom operators as cash cows.
Relatively, I think that the problem is easing out gradually, because it has become clearer to those who want to see that there are huge socio economic benefits telecommunication services can offer, which far outweigh the IGR benefits.