Strengthening telecoms regulator’s autonomy for sustainable economic growth
Like many democracies, Nigeria recently marked this year’s Democracy Day on June 12, a day that symbolises freedom from the oppressive rule of the military. An allusion of such symbolism has equally been made to the telecoms sector, which has continued to drive the country’s socioeconomic development and whose independence, stakeholders believe, should be strengthened.
Indeed, stakeholders have for the umpteenth time, raised concerns regarding how the government, especially through its supervising Ministry of Communications and Digital Economy, is stymieing the autonomy of the sector’s regulator, the Nigerian Communications Commission (NCC). This is despite the clear provisions in the Nigerian Communications Act (NCA) 2003, emphasising the need for the regulator’s independence to be observed at all times.
Over the years, the friction is not peculiar to the current administration, as there has always been some sort of friction and incursion into some of the regulatory activities of the NCC by the supervising ministry.
Under the current administration, stakeholders have raised bigger concerns regarding frequent interference into its activities by the supervising ministry. While the commission has, over the years, managed the relationship between it and the ministry, recent development at the NCC, has revealed a new dimension of this development.
The Guardian gathered that the NCC has received a notice from the Ministry of Communications and Digital Economy, requesting the commission to furnish the minister with the regulator’s programmes of activities for the remaining part of 2022.
Speaking on a document making the round with the title: “Request for Information in the Commission’s Public Programmes for 2022,” stakeholders maintained that the ministry has, once again, demonstrated its meddlesomeness into the regulatory activities of the commission by wanting to know about the activities and events of NCC, involving hosting of regulatory activities with its licensees and other external stakeholders.
While the request is not in itself bad or over bearing, the intent behind such request appeared to be what is unsettling stakeholders, going by the antecedents of the ministry with some of the agencies and parastatals under the ministry.
According to stakeholders, this invariably means that any activity of the NCC in that regard must be subjected to the ministry’s scrutiny before going public, which is contrary to regulatory powers of the commission as an independent regulator as contained in the NCA Act 2003.
Besides, this move is seen in the industry as an attempt by the leadership of the ministry to, once again, interfere with the regulatory activities of NCC rather than focusing on the policy direction, which, inter alia, is the main role of the ministry.
The recent directive, according to information gathered by The Guardian, was in relation to a particular telecoms programme organised by NCC, where the ministry, especially the leadership, was not aware.
Defining minister’s role in NCA 2003
A dissection of the NCA 2003 with respect to the role of the minister showed that Section 23 of the Act specifically outlines the role of the minister in the telecoms sector to include (a) the formulation, determination and monitoring, of the general policy for the communications sector in Nigeria with a view to ensuring, amongst others, the utilisation of the sector as a platform for the economic and social development of Nigeria; (b) the negotiation and execution of international communications treaties and agreements, on behalf of Nigeria, between sovereign countries and international organisations and bodies; and (c) the representation of Nigeria, in conjunction with the Commission, at proceedings of international organisations and for matters relating to communications.
In relation to his relationship with the commission, the Act in Section 25, (1) said: Subject to subsection (2) of this section, the Minister shall, in writing, from time to time notify the Commission or and express his views on the general policy direction of the Federal Government in respect of the communications sector. Also, sector (2) states that, in the execution of his functions and relationship with the Commission, the Minister shall at all times ensure that the independence of the Commission, in regard to the discharge of its functions and operations under this Act, is protected and not compromised in any manner whatsoever.
Previous instances of regulatory overlap
According to The Guardian findings, this is not the first time the telecoms industry is faced with this kind of regulatory capture. There have always been precedents where the ministry has tried to encroach into the regulatory activities of the country’s telecoms regulator.
Mid 2009, the NCC, in furtherance of its regulatory activities, sold three 2.3GHz licenses for WiMAX operations to three operators, namely: Mobitel, Spectranet and Multilinks. Before the joy of celebrations could abate following the success of such licensing, the exercise was cancelled by the Minister of Information and Communications, Prof. Dora Akunyili, who claimed not to be properly briefed or carried along. There was something close to a dirge across the industry because such an audacious external intervention had never been witnessed in an industry, acclaimed all over the world, as exemplary.
The telecoms industry had been built on peoples’ credibility, knowledge, sweat and investment, and the NCC wasn’t going to let that go down easily. Ernest Ndukwe, who was the Executive Vice Chairman (EVC), wrote to the minister immediately, pointing her attention to the section of the NCA Act 2003, which confined her involvement in the industry to only policy matters. The matter didn’t settle well with the late Prof Akunyili.
Both Akunyili and Ndukwe, who hailed from the same end of Anambra State, were very strong personalities. They knew their jobs but they also didn’t want anybody to breathe their air. There was outrage stoked by what would turn out to be a media war between a sister and a brother just to be able to do a damn good job for the industry and prove fidelity to the nation. Both the Communications Policy and the Telecommunications Act were under scrutiny and went through an acid test. In the end, the regulator won.
In October 2019, the Minister of Communications and Digital Economy, Prof. Isa Pantami, ordered the NCC to direct telecoms operators to reduce prices of data packages within five days! Even though the directive was celebrated on the streets, it never went down well with operators, and other industry stakeholders.
The reservation by the industry stakeholders was not because the industry disliked the minister, but for the lack of understanding of the minister on rules and regulations guiding the necessity for issuing such directives by the regulator. For a fact, price determinations are based on an all-inclusive empirical process rather than by a supposed fiat, as demonstrated by Pantami.
Part of the directive, which asked the regulator/operators to crash data price without any recourse to NCC’s regulatory procedure, as enshrined in the telecoms laws, has been described as being antithetical to proper regulation of the industry to ensure sustained growth, a fact industry experts said the minister failed to “acknowledge to demonstrate his understanding of the sector he is supervising.” For instance, findings by The Guardian showed that the NCC has no unilateral power under Section 108-110 of the NCA Act 2003 to prescribe retail price.
An analysis of the sections of the Act showed that the NCC does not have powers to determine the price contrary to the minister’s directive, as the Commission is guided by the Act, and necessary International Telecommunication Union (ITU) recommendations.
In Nigeria, the NCA 2003 and other subsidiary regulations allowed the Commission to ensure that tariffs reflect the costs of providing services. This explains why the NCC, according to industry experts, is mandated to carry out cost-based studies from time-to-time, and as may be deemed fit to fix prices floors and /or ceilings as this also helps the regulator to ensure that no operator underprices to kill its competitors.
Imperatives of regulatory autonomy for telecoms industry stability, growth
Findings showed that from 8.50 per cent telecommunications contribution to the country’s Gross Domestic Product (GDP) in 2015, the figure rose to 14.43 per cent as at H1, 2022. The telecoms contribution strengthened ICT contribution to GDP, which currently stood at 17.92 per cent, according to data from the National Bureau of Statistics.
Consequently, of the about 350 million connected lines, it must be stated that Nigeria currently has 201 million active telephone subscribers. The sector can boast of over $80 billion investments. After successful auction of the 3.5GHz spectrum for the deployment of Fifth Generation (5G) by the NCC, telecom operators have been mandated to start deployment of 5G technology by August. Hopefully, a new revolution is expected to be born in the sector.
Indeed, sustaining these growths requires stability and regulatory autonomy, according to a telecoms expert, Kehinde Aluko.
Aluko said the minister by now, with over three years in the office, should know that autonomy of the regulator, the NCC, is critical if more investments must come to the industry.
“Without industry stability and specialization as it were, I believe it will be difficult to bridge the 114 access gaps in the country, where some 25 million Nigerians are still without basic telephony services,” Aluko stressed.
Few months back, MTN Chairman, Ndukwe, noted at a public function, that the political and financial independence of the regulatory institution would be critical in achieving further industry successes and contributing significantly to the economy.
Ndukwe recalled that the high investment levels that had been attained in the sector was neither because Nigeria suddenly became one of the most desired investment destinations for ICT in Africa nor due to its large population.
He said Nigeria has always had a large population before 2000, “but the massive inflow of investment was largely because of the stable policy and regulatory regime that the industry enjoyed since 2000. This must, therefore, be maintained.”
Maintaining the political and financial independence of the regulatory institution, according to Ndukwe, totally devoid of undue interference, is a basic requirement of regulators, to be able to regulate the market fairly and earn the confidence of investors, consumers and other stakeholders.
“Nigeria must strive to maintain an operating environment that is conducive by avoiding actions that can constitute a disincentive for investment. The telecoms sector is highly capital intensive and, therefore, to continue to encourage timely network expansion, improve quality of service and ensure national coverage in Nigeria, emphasis must be on ensuring an attractive operating environment,” he said.
In the same being, the Association of Licensed Telecommunications Operators of Nigeria (ALTON), while calling for NCC’s autonomy, pointed out that telecoms regulations, all over the world, are a process, stating this shouldn’t be an exception in Nigeria.
In the days of rage as regards minister’s directive on data reduction, the Chairman of ALTON, Gbenga Adebayo, had noted that the minister’s directive appeared dictatorial and capable of eroding the gains of the telecom sector by scaring away existing and prospective investors, who have invested in the industry.
“NCC should be allowed some level of independence to do its work of regulating the telecoms industry,” he said.