By Olabisi Olaleye
The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, is one regulator that is committed to moving the Nigerian communications industry to a new pedestal. At a recent meeting in Lagos, Danbatta expressed his views on the state of the telecoms industry and what the NCC is doing to address several challenges bogging subscribers, minds including the reasons behind declining teledensity and subscriber base. Excerpts:
Quality of service
Service quality has improved slightly even though there is still a gap between the standard set by NCC and what the operators are offering currently, with regards to Key Performance Indicators (KPIs) set by the NCC.
In the last quarter of 2016, the service quality improved slightly, but we are no where near the stipulated standard set by NCC. Although we are going to enforce full compliance of service quality, there are no deadlines for the implementation because NCC has a tradition of consulting with the operators through its open guideline policy.
In the next few weeks, NCC will be publishing the performances of operators for the first quarter of the year in terms of service quality and the subscribers will see the performances of their service providers. We will first present the scorecard to the operators, discuss it with them, before making it known to the public.
Reversing declining subscriber teledensity
The truth is that the decrease in number is not affecting only subscriber teledensity but it is also affecting subscriber number and mobile internet penetration in the country. The statistics show that subscriber number is decreasing from its initial over 200 million across networks, to about 152 million currently. The reason behind the drop in number is that Nigerians are migrating from 3G services to 4G LTE services that are currently being offered by telecoms operators. Consumers are migrating because they are looking for services that will enable them make free whatsapp calls and get data bundle at a relative cheaper rate to boost their data communication and browsing pattern. Consumers are no longer comfortable paying so much for voice and data services on the 3G network, hence the migration to the 4G LTE, and we see a situation where more Nigerians will continue to migrate and drop some of their 3G lines. So the migration is affecting teledensity growth, subscriber growth and internet penetration.
Auctioning remaining slots in 2.6GHz spectrum
The 2.6GHz spectrum was advertised for auction some time ago because we needed to drive deployment of 4G LTE broadband services in order to improve broadband penetration in the country. Unfortunately, only MTN participated in that auction and it eventually emerged winner of six slots out of the 14 slots contained in the 2.6GHz spectrum. NCC had since allotted the six slots to MTN and the money was paid in naira denomination, at N200/dollar, which was the exchange rate at the time of auction, even though the spectrum licence was advertised in dollar denomination. In order to find out why operators declined to bid, leaving only MTN, we carried out a postmortem test. After the postmortem analysis, we discovered that the reserved price for the auction of the spectrum was on the high side, and that it affected the interests of other operators to bid, as well as the prevailing harsh economic situation, hence several operators declined to bid.
The remaining eight slots will be auctioned on a later date, and we will restrict the auction process to only licensed mobile network operators (MNOs). We have written to all the licensed MNOs, informing them of the commission’s intention to auction the remaining eight slots at the same exchange rate N200/dollar, even though the exchange rate has increased currently. The intention is not to make huge profit, but to provide an enabling business environment for MNOs to thrive. The process is ongoing and as soon as it is completed, we will make it public.
Suspended data price floor
The introduction of the interim price floor for data by the NCC was meant to usher in certain levels of development in the telecoms sector. It was introduced to stem unhealthy competition among telecoms operators. So the interim price floor was introduced as a regulatory measure to address certain ugly incidences in the telecoms sector and to protect subscribers from undue exploitation. The price floor was not meant to hike data cost in the first instance, but to protect telecoms subscribers. As regulator, we welcome competition but frown against unhealthy competition that could stifle telecoms growth.
So based on public outcry, the NCC decided to suspend it and returned to our consultant who is currently doing a cost-based assessment in order to come up with acceptable price floor for data. But one thing subscribers must bear in mind is that low price floor will lead to slow speed of connectivity and eventual poor internet service, while moderate price floor will lead to high speed connectivity. So subscribers should be able to know what they want.
Significance of 2017 as year of telecoms consumer
The NCC is currently carrying out a campaign on the Year of the Nigerian Telecom Consumer, which has been launched in Abuja and Lagos. NCC is using the consumer campaign to inform and educate subscribers with the sole intent of protecting and empowering them to make the right decisions.
As part of efforts to realise the NCC 2017 Year of the Consumer, I have convened a meeting with mobile network operators (MNOs) and infrastructure providers to demand that the quality of services must be improved upon immediately. This is to ensure that the consumer gets value for money and gets satisfactory user experience. There are sanctions for failing to meet KPIs and NCC will not hesitate to enforce them and might consider making them even more stringent.
The 2017 Year of the Consumer will focus on two areas: improving the quality of service and protecting and educating the consumer. In order to address the challenge posed by unsolicited calls and text messages received by consumers, the NCC has introduced the Do Not Disturb (DND) facility, where consumers are urged to activate the facility by texting the word ‘STOP’ to 2442. NCC also introduced 622 customer toll free complaint line where customers could call free of charge to do follow-up on the text message sent, especially when there is delay in response from the text message sent.
Improved quality of service as well as the protection and empowerment of consumers were core drivers of the NCC Year of the Consumer initiative as enshrined in the 8-Point Agenda of the commission released in 2016. The commission has deployed several activities in its strategic plan to run a successful Year of the Consumer campaign with the support of operators.
Across the country, the grassroots oriented NCC Consumer Conversations now take place in six locations simultaneously across the country once every month. Road shows, radio jingles, town hall meetings and a medley of consumer outreach programmes are ongoing. Continuous monitoring of KPIs and benchmark is ongoing too on a quarterly basis to ensure that the quality of service does not deteriorate.
Etisalat’s indebtedness to 13 banks
Negotiations between the management of Etisalat and its creditors are ongoing. Abu Dhabi’s leading strategic investment company, Mubadala, a major shareholder in Etisalat Nigeria, was in Nigeria to negotiate the $1.2 billion bank loan with the lending banks. The Mubadala team met with NCC and the CBN to discuss the renegotiation plan of the repayment of the loan. I will not want to disclose the details of the renegotiation plan but what I can tell you is that discussions are ongoing on new measures to repay the loan. Mubadala will also be meeting the management of the 13 banks to further discuss how they intend to repay the loan. I am sure that the issue will be resolved very soon.
Access to forex
The issue of forex scarcity is not affecting only Etisalat as a telecoms company but cuts across other licensed telecoms operators in the country. What NCC has done in this regard was to secure a priority window for forex for telecoms operators, which has never happened before. The NCC had to step in and engaged directly with the financial regulator, the Central Bank of Nigeria (CBN), and an agreement was reached for a priority window for telecoms operators to enable them have access to foreign currencies in the midst of scarcity. So far, a couple of operators have been able to enjoy that priority window and NCC will continue to push for more availability of forex for telecoms operators.
MTN fine
MTN had since complied with the payment arrangement of the fine and it has so far paid N110 billion based on the structure of the payment agreement reached between it and the Federal Government. It initially paid N80 billion, and recently paid additional N30 billion into the recovery account of the Federal Government. The payment structure was staggered and spread over three years and MTN, to the best of my knowledge, has not defaulted in the staggered payment structure. But let me say this that the financial position of MTN has improved, having recorded about 7 per cent growth according to its financial report.
Protection against ‘Wannacry’ ransomware
It is a global cyber threat and 99 countries have already been attacked with the ransomware, hence we decided to alert Nigerians on the danger of the virus and the possible measures to address it. NCC, in fulfilment of its statutory mandate to ensure the security and integrity of the national telecommunications network, decided to alert all telecoms operators and their respective subscribers of the recent outbreak of a ransomware virus known as “WannaCry”.
The ransomware is capable of infecting and encrypting all files on a system or any smart device until an amount is paid for a decryption key or other means of retrieval, which may lead to data loss. This situation demands that proactive measures be taken by all players in the telecommunication eco-system to forestall the hazards of critical data loss, financial losses and ultimately network/business disruption.
We have advised all operators to obtain software patch released by Microsoft in March 2017 to fix the ransomware virus, and to also plan scheduled penetration tests on their networks and systems to ensure protection and availability at all times.
Subscribers who use their smartphones as substitutes to computers for internet access should protect themselves and their devices by not opening e-mail attachments/links from unknown sources, by not clicking pop-ups and applets on unknown websites, and by installing effective antivirus software for their mobile devices. The measures are proactive ways to make telecoms operators and subscribers, stay several steps ahead of global hackers who are currently on rampage to destroy established institutions in the financial and telecoms sectors. All operators should continue to ensure that their backup/ disaster recovery strategies are in place and up to date, and ensure continued deployment of effective firewalls, login passwords and antivirus management regime.