By Olabisi Olaleye and Steve Agbota [email protected] 8094000013, 08111813040
Recently, the ICT industry was rudely woken by the exit of Mubadala, shareholders in Emerging Markets Telecommunications Services Ltd, trading as Etisalat Nigeria.
Perhaps, if government policies had been more friendly, Etisalat Nigeria may have survived the challenges that led to the shake-up.
Recently, during a meeting with telecommunications reporters under the aegies of Nigeria Information and Communication Technology Reporters Association, Mr Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria, said government need to intervene in the plight of telecom operators before the country experience another exit.
According to him, one of the most far-reaching achievements of Nigeria in the last 16 years was the revolution in the telecommunications sector.
“The industry is facing major challenges in purchasing foreign exchange to fulfill contractual obligations to equipment suppliers and foreign vendors. This situation is adversely impacting our network operations and also some recent developments in the industry have alluded very clearly to the risks at hand.
“The prevailing scarcity of foreign exchange has occasioned a situation where the banks are unable to obtain it for an upward period of six months,” he said.
Adebayo noted that, owing to the prevailing economic situation in the country, ALTON members cannot transfer the increased cost burden to the consumers, thereby contracting profitability and ability to make further investment to drive growth in the industry.
The ALTON boss further disclosed that, due to unfavourable credit terms, there have been delays in paying equipment suppliers and other foreign vendors, who have now resorted to imposing unfavourable payment terms on telecommunications service providers in Nigeria.
“Some of the foreign vendors had issued notice of disconnection of service, which could disrupt service availability with attendant impact on customers’ experience,” he said.
Adebayo disclosed that ALTON had made requests to the Central Bank of Nigeria to include telecommunications equipment and invisibles among the list of items/sectors to benefit from the 60 per cent FX availability supply from banks “to ensure the continued provision of world-class telecommunications services to the consumers. And there is need to revisit the suspended data floor price.”
Data floor price is a means of controlling anti-competitive behaviours by operators considered to have attained the dominant status in the industry. In his view, there is the need to revisit the suspended data floor price in order to save the telecom industry.
Statistics available has shown that bigger players lost some market share when the floor price was set and smaller operators got some space in the marketplace.
Internet service providers have been badly hurt by the current indeterminate floor price as they are left to compete at prices below their costs.
Demand for data has increased in recent times following the rapid growth of mobile phone subscribers in the country as there has been an influx of smartphones and other data-consuming gadgets into the Nigerian market.
The social media over the top (OTT) like Facebook, Whatapp, Instagram and Snapchat have taken over most of the voice revenues. The activities of the social media operators have greatly eroded the revenue of the legacy operators.
Adebayo stressed that the industry was going through a lot of challenges and, “it is now inevitable for the NCC to review the data floor price that was suspended. This is necessary to save the industry.
“Mobile data revenue is growing while the growth of mobile voice revenue is declining.”