Telecom

ISPs Seek Government Support, Task ATCON for More Advocacy

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3 years ago

July 12, 2022

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In a bid to ensure sustainable growth in its sector, the Internet Service Provider (ISP) stakeholders have called on the Nigerian Communications Commission (NCC) to increase governmental support on its sector as over 568 ISP licensees have gone inactive.

This call was made during the panel session at the Telecoms Sector Sustainability Forum organized by Business Remarks media held on Thursday, July 7 2022 in Lagos State.

Expressing his views, Mr Micheal Ayoade, Chief Executive Officier of Dotmac Technologies, tasked ATCON for more advocacy as regards issues militating against their survival and growth in the industry.

According to Ayoade, ISPs are charged a higher rate than others for Right of Way in most states. Using Lagos State as an example, he said license operators pay a cheaper rate compared to ISPs, who are charged ten times more than the agreed N145 per meter rate linear for RoW.

He said ISPs lack unified backup to fight their cause and push for the agreed rate from the state government and taxes demanded by the Federal Inland Revenue Service (FIRS).

Speaking on improving quality of service through laying of fibres and cables, Ayoade emphasized that without ATCON speaking for them in the industry, the cost overhead carried by individual company for survival will eventually lead to their untimely death.

“Collaborations among ISPs is important but not very straightforward because each Internet Service Providers determine their price structure through cost incurred, keeping manpower and other business risks”.

On his part, Mr Tony Emoekpere, Managing Director for MangoNet Integrated Technologies said the ISPs sub-sector is too fragmented to scale up. He berated the fact that ISPs players are close to 1000 in number.

Emoekpere said this shows that indigenous players do not understand the market terrain.

“Local content is a real challenge. The telecommunications business is a long-time investment which requires continuous investment and pressure to upgrade infrastructure.

“You don’t have to own all the infrastructures to provide service. In Orlando, there are just three major ISPs. Foreign companies are taking advantage of this market because they understand the value of collaboration with key players and their area of strength”.

Sharing views Ayoade, FiberOne Broadband Head of Sales and Marketing, Mr Kehinde Joda stated that multiple taxations, high cost of RoW, and operating in silos kill small businesses in the ISPs sub-sector.

While charging the umbrella body, ATCON on more advocacy, Joda said the sub-sector lacks necessary support. There are different tiers of the banking system such as some finance houses and microfinance banks supporting other industries.

Speaking further during the panel session, he said although there is excess capacity landing at the sea shores, there is a need for last-mile internet connectivity in the hinterlands. He also decried the high cost of fuel, vandalism, activities of street thugs, and mobile network operators disruption as part of the challenges ISPs face.

“There will be healthy competition, pricing and collaborations if the Nigerian Communications Commission can make the right policies for ISPs sustainability”, Joda noted.

Also eStream Networks CEO, Mr Muyiwa Ogungboye, represented by Mr Martins Akingba berated the lack of governmental support for the ISPs sub-sector in the telecommunications industry.

He highlighted that the government has not fulfilled its part towards ISPs’ sub-sector growth and sustainability. He, therefore, owns the present existence of ISPs to the resilience and ingenuity of businessmen in Nigeria.

In his words, “there is a certain level of investment needed to be made by the government, that was never made. The government have done nothing to sustain this industry. There is no National Network Backbone for the ISPs to build on.

Akingba noted that the National Infrastructure was built by the Mobile Network Operators (MNOs) who are private business owners.

Moreso, the eStream Boss said it is quite unfortunate that the market takes advantage of the sub-sector because it is too fragmented. NCC needs to step in for ISPs’ growth.

In addition, he stressed the struggle with human capital flight and the huge brain drain in the industry.

He, therefore, urged others to rethink their business models, innovate and become more agile for sustainability and profitability unless they will be forced out of business by the activities of the MNOs.

Akingba further tasked the ISPs to expand into the West African coast, leverage on the opportunities made available to them and also think of sustainability strategies for growth.

WTES Projects Limited Chief Operating Officer (COO), Mr Chidi Ajuzie said the ISPs are struggling because of the regulatory and licensing framework. According to him communities ISPs cannot survive this terrain.

“ISPs in the United States and other countries survive because there is a universal player and universal infrastructure environment in existence. NCC, the government and others concerned need to build a National Uniform Infrastructure”.

He urged ISPs players to become more familiar with industry trends and initiatives both locally and globally to sustain their growth.

Ajuzie also harps on collaboration with players who already own infrastructures for efficiency and faster growth.

ipNX CEO, Segun Okuneye stated that the regulator, NCC needs to watch and support the industry sub-sector to ensure its survival in terms of infrastructures, pricing and creating enabling environment.

“NCC have an obligation to ensure its licensees survival irrespective of the activities of the MNOs. It is sad that states government are missing it when they focused only on increasing Internally Generated Revenue (IGR) because when they forced the ISPs out of business, unfortunately unemployment increase, taxes unpaid and so many things lost.”

Okuneye also advised ISPs to invest wisely and leverage of other backbone to grow and survive.

Equinoxcore Technology CEO, Mr Lanre Olanrewaju lamented the huge decline in turnover, subscriber base, challenges the struggle ISP face and the ever-changing policies.

In her opening speech, the convener of the Forum and Managing Editor of Business Remarks, Mrs. Bukola Olanrewaju said: “Over the years, studies have shown that the licence renewal rate of ISPs in Nigeria continues to drop, even as others take up the licence. In view of the critical need for internet connectivity for the digital economy and for mass digitalisation of Nigeria, the role of ISPs is central also for uptake of internet of things (IoT).”

Internet Service Providers in the Nigerian telecommunications industry have been struggling to stay afloat due to challenges confronting their market to remain in business, expand operations and post profit every financial year. In line with the above, findings also showed that most of the ISPs who served the enterprise market lost revenue during the pandemic because their services were cancelled or suspended, despite procuring wholesale capacity,” she noted.

The event enjoyed the sponsorship and participation of the Nigerian Communication Commission (NCC), Skymax Integrated Network Limited, IPNX, eStream Networks, WTES Projects Limited, MangoNet Integrated Technologies, FibreOne Broadband, Dotmac Technologies, ICSL, NITDA

P) stakeholders have called on the Nigerian Communications Commission (NCC) to increase governmental support on its sector as over 568 ISP licensees have gone inactive.