By Chinenye Anuforo, [email protected]
The year 2021 began with individuals, governments, institutions and organisations adjusting to the new normal (a new way of life) brought about as a result of the COVID-19 pandemic.
Nigeria’s information and communications technology (ICT) sector was not left out as it recorded many developments that reshaped the sector. From the ban on Twitter operations in Nigeria by the Federal Government and then ban on cryptocurrency trading, among others, it was a mixed bag of fortunes.
Twitter ban
During the period under review, the Federal Government indefinitely suspended Twitter, a microblogging social site. The ban was imposed when the platform pulled down a tweet by President Muhammadu Buhari threatening to treat secessionist group “in the language they understand.”
The ban has continued to cost the country huge revenue running into over N499.32 billion since it came into effect on June 4, 2021.
The directive was promptly carried out by the telecommunication companies the next day, following an instruction from the NCC.
NetBlocks Cost of Shutdown Tool estimates that Nigeria’s economy loses N104.02 million ($250,600) every hour to the Twitter ban.
Cryptocurrency ban
The Central Bank of Nigeria (CBN) descended heavily on cyrptocurrency trading in the country. This was as a result of the peaceful #EndSARS protest that was later hijacked by hoodlums, leading to widespread arson, looting and no fewer than 100 deaths across the country. The protesters, who had lots of jollof rice and drinks during the cannival-like protests, were said to have raised cash through cryptocurrency trading.
After criticism of the CBN’s action from different stakeholders, the regulator said it didn’t ban its trading: “The CBN did not place restrictions on the use of cryptocurrencies and we are not discouraging people from trading in them, the bank said. What we have just done was to prohibit transactions on cryptocurrencies in the banking sector.”
7.5% VAT on Facebook ads effective Jan 1
Facebook says Nigerians will pay 7.5 per cent value-added tax (VAT) on all ad placements from January 1, 2022.
According to the statement, the charge will apply to those buying ads for businesses or personal purposes.
“Due to implementation of a value-added tax (VAT) in Nigeria, Facebook is required to charge VAT on the sale of ads to advertisers, regardless of whether you’re buying ads for business or personal purposes,” the statement reads.
“All advertisers with a business country of Nigeria will be charged an additional 7.5% VAT on advertising services purchased beginning 1 January 2022.
The statement added that those exempted from VAT would be able to recover the fund if they provided their tax ID.
“If you’re registered for VAT and provide your VAT ID, your VAT ID will show up on your ads receipts,” it added.
”In the event that you’re entitled to recover the VAT, this may help you recover any VAT you paid to the Nigerian tax authorities if you are a VAT registered business in Nigeria,” the company said.
Facebook (now META) is the parent company of Instagram, FB Messenger, and Facebook social media channel.
The new 7.5 per cent VAT charge will also apply to Instagram ads.
Facebook, Instagram, WhatsApp outage
The entire technology world was completely shocked when the tech triumvirate, Facebook, Instagram and WhatsApp went down. The entire global business community was thrown into pandemonium for as long as the outage lasted.
Both big and small businesses that depended on the three platforms for survival were thrown into quandary.
On the outage, CEO Mark Zuckergerg, in a Facebook post, noted that those who could not communicate with families and associates or transact businesses were the real casualties of the shutdown.
“The SEV that took down all our services yesterday (Monday) was the worst outage we’ve had in years.
“We’ve spent the past 24 hours debriefing how we can strengthen our systems against this kind of failure. This was also a reminder of how much our work matters to people.
“The deeper concern with an outage like this isn’t how many people switch to competitive services or how much money we lose, but what it means for the people who rely on our services to communicate with loved ones, run their businesses, or support their communities,” Zuckergerg had said.
During the period under review, Facebook changed its corporate name to Meta as part of a major rebrand. The company said it would better “encompass” what it does, as it broadens its reach beyond social media into areas like virtual reality (VR).
20 years of telecoms revolution
In the year under review, Nigeria also celebrated 20 years of the telecoms revolution. The telecommunications revolution that transformed Nigeria in different ways coincided with the dawn of the new millennium.
A breakthrough in telephone infrastructure emerged in January 2001 when the sector was totally liberalised, paving the way for the licensing of private telecoms operators to offer telephone services previously the exclusive territory of the government-owned Nigerian Telecommunications Limited (NITEL) and its subsidiary, M-Tel, which had attempted to offer mobile, albeit analogue, services.
The licensing of private operators was the result of a week-long spectrum auction, code-named Digital Mobile Licensing (DML) Auction, which took place in January 2001, in Abuja, and was conducted, by the NCC, under the leadership of Dr. Ernest Ndukwe, during the era of President Olusegun Obasanjo.
The auction exercise climaxed on January 19, 2001, with Econet Wireless, MTN and Communication Investment Ltd (CIL), announced as winners.
However, each company, having paid a non-refundable deposit of $20 million to enter the auction, was required to pay a balance of $265 million within 14 days, for the total license price of $285 million, to formally issue the licence – or forfeit the earlier deposit.
While Econet and MTN met the payment deadline, CIL failed to fulfil the obligation; and its license became encumbered or forfeited. M-Tel, however, had its license awarded to it on a platter being a government company at the time.
Thus, Econet and MTN paid $285 million each into the Federal Government coffers as Digital Mobile License (DML) fees. The licences were valid for 15 years, and the government raked in over $800 million at the time. They deployed commercial service in August 2001.
Today, Nigeria moved from meagre 400,000 NITEL lines in 2001 to over 300 million connected telephone lines within the space of two decades. The sector has equally seen over $80 billion investments, both foreign and local within this period.
MTN Nigeria outage
MTN Nigeria also suffered service outage. MTN later blamed the development on 3G, 4G technical error. It said the network error shifted all 4G customers onto the 3G band and impacted the whole network. It, however, assured that its technical teams have rectified the problem.
The telecoms company also announced compensation for its subscribers to make up for the Saturday October 9, network disruption.
MTN Nigeria users witnessed hours of network disruption caused by an outage that left customers without a connection.
Its CEO, Olutokun Toriola, who blamed the service outage on a technical glitch, said: “Our technical teams have traced the cause of the problem to an error that shifted all our 4G customers onto the 3G band. This overloaded the 3G band, causing a domino effect that impacted the whole network. Our engineers were able to resolve the problem. I know that recently other technology companies have suffered outages. I want to reassure you that last Saturday’s event is in no way connected to those. This wasn’t sabotage, it was a regrettable error.’’
Toriola apologised once again to customers for the inconvenience, stating that new measures were being implemented to mitigate a repeat of such an event.
“On behalf of the entire MTN team, I want to start with a heartfelt apology. We are truly sorry for the disruption this caused for so many in our MTN family. We know that millions of people rely on us to stay connected to their loved ones, to manage their businesses, to coordinate their lives. We take that responsibility, and privilege, very seriously. That’s why we are putting new measures in place to make sure we never experience anything like last Saturday again,” Toriola said.
5G licensing
Ahead the deployment of the fifth generation (5G) technology in the country, Mafab Communications Ltd and MTN Nigeria Plc in the period under review emerged the two successful winners of the 3.5 gigahertz (GHz) spectrum auction for the deployment of 5G technology to support the delivery of ubiquitous broadband services.
The two winners emerged in a keenly-contested 3.5GHz spectrum auction conducted by the Nigerian Communications Commission (NCC), in collaboration with the Federal Ministry of Communications and Digital Economy.
The executive vice chairman, NCC, Prof. Umar Danbatta had explained that the two winners entered into another stage of auction called the Assignment Stage, in order to determine the operator that would take a particular lot out of the two lots that were auctioned. He said the winners were expected to pay the full licence fee by February 24, 2022, and that the payment must be made in Naira denomination.
MTN Nigeria sells of 575m shares
MTN Nigeria also in 2021 completed the sale of 575 million shares held in MTN Nigeria by MTN Group to retail investors to broaden the shareholding base of the telecoms company.
Its Chief Executive Officer, Karl Toriola, said the sale of the shares was not designed to raise funds for the company but to deepen its shareholding and enable more Nigerians partake in the prosperity of the company.
The offer closed December 14, 2021. Priced at N169.00 per share (the offer), the minimum subscription was for 20 shares and lots of 20 shares thereafter. The offer included an incentive in the form of one free share for every 20 shares purchased, subject to a maximum of 250 free shares per investor. The incentive was open to retail investors who buy and hold the shares allotted to them for at least 12 months, post the allotment date.