ISPs tasked on improved business process
Internet Service Providers (ISPs) need to be encouraged to improve their general business processes practices, long-term growth and sustainability to create new revenue streams, recreate existing products, diversify into new areas for which resources and capabilities are available and establish a minimum market price.
This formed part of the findings in a study on “The Challenges and Survivability of ISP Licensees in the Nigerian Telecom Sector.” The study was authored by the Emerging Technologies Research Unit of the Research and Development Department of the Nigerian Communications Commission (NCC).
The report, which noted that survival and growth are the two main objectives of any organisation in today’s competitive world, said every organisation tries to be different and accelerative from their competitors to achieve their goals and become market leaders.
For licensed ISPs in Nigeria, which NCC puts at 143, as at October 26, 2020, the study said survivability entails overcoming the major challenge of improving customer base and competing with the Mobile Network Operators (MNOs).
In the report, a major ISP CEO in the country, who spoke on the condition of anonymity, disclosed that the major challenge the operators face is the arbitrary fixing of prices by bigger operators just to stifle smaller operators and force them out of the market.
Besides, the study noted that the incursion of telecommunication operators such as MTN, Globacom, Airtel and 9mobile has been a major development in the life of the ISPs.
To solve the issue of artificially low Internet/data prices, which has been another huge challenge, the study recommended that a regulated minimum price level has to be put in place by the government and
the Commission, for both big and small telecom operators to compete on the quality of the network and customer services they provide.
The study observed that as investments in telecommunications infrastructure are essential to economic growth, the Commission should encourage adequate infrastructure build-out as it contributes to the efficient operation of the sector and the survivability of the ISPs.
Further, creating an enabling environment that encourages additional investment in telecommunications infrastructure will be essential to economic growth, as adequate infrastructure contributes to the efficient operation of the sector.
The study urged the Commission to conclude a critical review/amendments to the obsolete portions of the Nigerian Communications Act 2003, which is heavily concentrated on the provision of voice services,
without much direction on the more relevant emerging technologies.
“Today, more emphasis should be placed on competition in the sector in a saturated market, the economy and other services closely related to the telecommunications industry, such as finance, technology and media services,” the report noted.
The study urged the Commission to champion the ubiquitous use of e-Services, e-Governance and e-Business, which would increase the need for Internet service which would invariably lead to more business opportunities, niches, and customers for the smaller ISPs especially in more rural areas which might not be so commercially viable for the MNOs to compete in.
The Commission has been urged to conclude the InfraCo licence award and implementation to grow ubiquitous rollout of fibre, across capital cities and to homes. The study added that customers can also play a part in regulating prices by valuing and promoting services that offer the best customer experience and not those that offer only the cheapest price.
The 50-page report commended the Commission for working assiduously to maintain a level playing field for all licensees and licence category holders in the telecommunications sector in Nigeria.
According to the study, “to further support ISPs by mandating high cost of data, the consumers suffer. By lowering prices of data, consumers are happy, the MNOs might cope or cross subsidize to continue the business, however, the ISPs for whom are the original licence for the provision of Internet services in Nigeria, ultimately suffer. It is indeed a fine line of both regulatory decisions on meeting consumer needs and sustaining the overall economic viability of the sector.”
The report said NCC has its role to play, but so do the ISPs. According to it, some ISPs have thrived even within the emerging challenges brought about by the convergence of datavoice.
“It is therefore ultimately the responsibility of ISPs to ensure they have secured a niche in the ISP market, the right cost of data purchase, and other sound business that will ensure that continuity. On its way, the Nigerian Communications Commission will continue to review, analyse and collaborate with stakeholders to ensure where necessary, adequate support is provided to the smaller ISP players, without unduly compromising the sustainability of the Nigerian telecoms sector as a whole,” the report noted.