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Multiple Regulation, Taxation and Telecom Development

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Operators in the telecommunications space of the country’s economy have not had peace of mind in the last six years in the process of service delivery as they are confronted with several challenges. Unfortunately, most of the challenges have little or no relationship with the process of service delivery. Operators are faced with security issues at base stations, unfriendly host communities, vandalization among others.
In view of all these that operators took measures to address some of the issues which are distracting them from their main business of service delivery. Among some of the initiatives are adoption of collocation, and outsourcing of base stations to infrastructure providers. 
As these initiatives were gradually addressing the known problem that other challenges began raising their head, and they are multiple regulation and taxation.
In a federal system there are issues reserved for either federal or state to legislate on and the ones both have power to regulate. In the case of telecommunications, it is the federal that has exclusive right to regulate the industry which led it into establishing a Commission in the name of Nigerian Communications Commission (NCC) backed with an act to effectively perform that function.
However, events in the recent past suggest that other federal government agencies as well as states are now making effort to usurp NCC’s function in the telecommunications industry which is unknown to the country’s law.
It has become a common practice for any government agency be it federal or state to solicits for one levy or the other from operators while some seek that operators secure approval from them which comes with a fee before they can build infrastructure.
It is not telecommunications operators that are lamenting over multiple taxation, operators in the manufacturing sector have continued to call for a lasting solution to the problem of multiple taxation in the country. According to them, if the problem is not addressed, business will continue to suffer,
With the challenges of poor infrastructure which is killing business in one hand and the headache of multiple taxation have been identified as another major threat to manufacturers and investors.
Speaking on the implication of multiple taxation, Otunba Femi Deru, President, Lagos Chamber of Commerce and Industry, said that as government empowered Local Government to enact law that will create a situation were they will generate revenue, those laws as vehicle license, radio, television among others as law that had affected business negatively, adding that these taxes are becoming rampant and hindrance to business development in the country.
Dr. Emmanuel Ekuem, immediate past president of the Association of Telecommunications Companies of Nigeria (Atcon) called on the government to discourage multiple taxation which is currently the bane of telecom operators in the country.
He said a situation in which operators in the telecoms industry were seen as cash cows should be a thing of the past.
He reasoned that government in the land should note that telecoms business attracts operational cost and that when the number of taxes paid by the operators increase just because all tiers of government want their various shares of the “cake,” it engenders less profits for the operators and compromise quality of service.
Mr. Ayodele Adigun, President, Chartered Institute of Taxation of Nigeria, said that multiple taxation in Nigeria militated against standard taxation practice, which is unhealthy for economic development.
He blamed the activities of quacks in the system for this situation and also described the practice as an evil one, noting that the institute was all out to combat this trend.
According to him, CITN was championing professional taxation practice in the country and also organising an awareness campaign to sensitize the public on the need to voluntary pay approved taxes.
He added that multiple tax and poor infrastructure had also made the environment extremely inclement and uncompetitive for locally made goods against those from other nations.
This situation has got to an alarming rate that operators took the issue to Labaran Maku, Minister of State for Information and Communications, where a representative of Zain, Tobe Okigbo, expressed sadness over the multiple taxation and harsh treatment meted to them by the local government and state officials.
He further maintained that about 14 of the company’s base stations were shut in Rivers State over taxes.
Responding to the concerns raised by operators, the minister said that taxes would not be withdrawn emphasizing the need to pay tax for the government to be able to provide the enabling environment that will enhance the growth of the telecom sector. “Tax must be paid. The issues of quality of service and number portability have been the priority of the Federal Government”, he said.
"Under my own leadership, am not here to reinvent the wheel. I am here to sustain the good work being done and improve on it by offering very, very transparent, honest and committed leadership that will enable us, the regulators, government, Telecommunication companies and other stakeholders to work as a team and as a family. Whatever you do must translate to quality and add value to the Nigerian society and the end users in the street", he added.
It is unfortunate that officials from government quarters seem not to understand the issue of multiple but are looking at it as tax evasion. The issue is clear and does not need interpretation. Operators are not saying that they won’t pay tax to government and its relevant authorities but duplication of the same tax which they have already paid to government at the federal or state levels is inimical and put pressure on them. The question is, how can one reconcile a situation where a telecom operator whose services are controlled by federal government pays relevant taxes or levies to federal and state governments, and are also forced to pay similar taxes not approval levy by local governments.
As operators are seeking ways to address the issue of multiple taxation that another government agency, National Environmental Standards and Regulations Enforcement Agency (Nesrea) came out with Environmental Impact Assessment for base stations of telecom operators.
The agency has given operators deadline of August 21 this year to obtain this license which comes with a fee for their towers.
Dr. Ngeri Benebo, director general of the agency, who met with telecomm operators in Abuja, said that the incessant environmental degradation is not acceptable even with the benefits of telecommunication in Nigeria.
She charged the operators to come up with individual code of practice that will guide the overall operations of their companies to protect the environment.
She said in the days and months to come, defaulting telecommunication operators, those involved in illegal shipment of hazardous products and wastes, dealers in endangered species, and industries without effective plan for effluent discharges, will face the wrath of the law. This according to her is because the new institutional mechanism to curb environmental degradation is now geared to prevent such abuses.
And to underscore its strong resolve, the agency has already shut down two operating base stations of known telecommunication giants. It has also confiscated products made from endangered species within the Federal Capital City Territory, Abuja.
Thereafter, Mr. Sule Oyofo, spokesperson of the agency in a statement said "there is no more hiding place for perpetrators" in the quest to curb environmental abuses.
Oyofo said as a prelude, retreated the earlier three months ultimatum to telecommunication operators to align their operations according to the dictates of the law.
"I want the inventory and audit of your mast/base stations nationwide within three months," Mrs. Benebo had ordered at a recent consultative forum.
Mr. John Odey, Minister of Environment, had in September, last year, at an interactive session hosted by Nesrea and NCC sought the cooperation of the telecommunications operators to explore options towards safer and better environment-friendly telecommunications operations in the country.
He stated that the agency had at the forum informed the operators about the growing concerns and increasing public complaints their actions pose to human health, safety of property and the environment.
Oyofo, however, regretted that months after that meeting, nothing has changed as Nesrea headquarters, zonal and state offices have continued to be bombarded with public complaints regarding the proliferation and indiscriminate installation of masts and base stations with their attendant environmental, safety and health implications.
It is worthy to note that of all those complains Nesrea claimed it has received from members of the public most probably base on their ignorant of any health implications of such infrastructure, it has not taken the pain to verify if those living close to the base stations are suffering from any sickness associated with emissions from the base stations. But, rather it is interested in forcing operators to conduct and obtain impact assessment which NCC has given them before such base stations are built which amounts to double regulation.
NCC has a department that enforces standard in the manner operators build their infrastructure, instead of Nesrea liaising with that department of NCC to ensure that those issues it said are raised by the public; it is now enforcing its order on companies that are not under its regulatory jurisdiction.
The most worrisome is the way it is going about its enforcement. Last week federal government withdrew the license she gave MTN to build infrastructure in the country which is the fallout of Nesrea disagreement with the telecom operator over environment impact assessment.
In view of all these that stakeholders who spoke to Nigeria CommunicationsWeek are calling for streamlining of regulations in the telecommunications industry as well as harmonization of relevant levies in order not to destroy and discourage investment in the sector which is expected to boom with the envisage abundance of bandwidth occasioned by the landing of undersea cables in the country.

 

 


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Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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Telecom

Airtel Boosts NIPR Public Relations Week with Onsite Unlimited Data Connection

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Telecommunications service provider, Airtel Nigeria has collaborated with the Nigeria Institute of Public Relations (NIPR) to provide with unlimited internet access at the institute’s inaugural edition of the Nigeria Public Relations Week.

The trailblazing event themed ‘Leveraging Public Relations as a Critical Asset for Nigeria’s Economic and Reputation Renaissance’ is set to run from Monday, April 22nd to Friday, April 26th, 2024, and will welcome thousands of delegates across Nigeria to the prestigious June 12 Cultural Centre, nestled in the heart of Abeokuta, the Ogun State capital.

Speaking on the strategic collaboration, Femi Adeniran, Director, Corporate Communications and CSR, Airtel Nigeria, expressed enthusiasm about the partnership, stating, “Airtel is proud to support the Nigeria Institute of Public Relations in its endeavor to advance the field of public relations.

“The relevance of public relations practice in Nigeria cannot be overstated, as it plays a vital role in shaping perceptions, managing reputations, and influencing public opinion. Hence, our support is a demonstration of our commitment to empowering individuals and organizations with innovative solutions that drive progress and create an enabling society.”

According to NIPR, through the PRWeek Organizing \Committee Chairman, Mr Yomi Badejo Okusanya, the NPRW will gather over 2,000 experts in the fields of economics, PR, and nation-building to discuss strategies for effectively communicating government policies and initiatives to the public.

Other activities at the NPRW will include conferences, the annual general meeting, workshops, induction of new members, breakout sessions with students as well as traditional rulers and a tour of some legacy projects in Ogun state.

With Airtel’s provision of onsite unlimited data connection, attendees and participants can enjoy unparalleled access to online resources, real-time updates, and interactive engagements throughout the duration of the event. This will significantly support the exchange of ideas, foster networking opportunities, and elevate the overall experience for all stakeholders involved.

Airtel Nigeria remains committed to offering unwavering support for initiatives aimed at driving innovation, collaboration, and nation-building.


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World Earth Day: Kuda Partners with Wecyclers to Clean up Communities in Lagos

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In a landmark partnership aimed at promoting sustainable waste management practices, Kuda Microfinance Bank and Wecyclers collaborated to commemorate World Earth Day on April 22, 2024. The collaboration featured a series of impactful activities designed to raise awareness and foster environmental stewardship.

The activities on the day included a webinar session facilitated by renowned expert in environmental management and head of ESG at Wecyclers, Omobolanle Olowu, during which she shared startling data on plastic pollution in Nigeria. She also discussed the importance of proper waste management and its significance in preserving the planet for future generations, providing valuable insights and practical tips on reducing, reusing, and recycling waste.

In a published study on plastic pollution in Nigeria, the country ranked ninth globally for plastic pollution with an estimated 2.5 million tons of plastic waste generated annually and less than 12% of those waste materials recycled.

Also on the day, Kuda staff volunteered for an environmental cleanup exercise, during which they took to parts of Apapa Road, Ebute Metta to empty gutters and collect plastics and other recyclable materials for recycling.

In addition, volunteers from Kuda gained firsthand knowledge of innovative waste management solutions during a guided tour of Wecyclers’ facility in Ebute Metta. The tour showcased Wecyclers’ pioneering efforts in recycling and waste upcycling, demonstrating how technology can be leveraged to address environmental challenges effectively.

Speaking about the collaboration, Emmanuel Femi-Adejobi, Senior Brand Manager at Kuda, expressed enthusiasm for the partnership’s potential to drive positive change. “We [Kuda] are committed to promoting sustainability and environmental consciousness. We also believe that our responsibility is not only to our customers and other stakeholders but also the environment that we all share. Partnering with Wecyclers allows us to inspire communities to adopt eco-friendly practices,” he said.

“Our initiatives towards achieving a sustainable environment and achieving a green earth goes beyond just recycling. We aim to inspire a broader commitment to waste minimization, reusing materials and proper sustainable waste management. As we commemorate World Earth Day, we encourage our staff, customers and general public as a whole to embrace actions that promote a green, safe earth for all,” he added.

Likewise, Esther Chibueyin Fagbo, Head, Human Resources and Partnerships at Wecyclers, emphasised the importance of collective action in addressing environmental issues. “It is very important for organisations to collaborate on initiatives that help save the environment. We are excited about this partnership because such partnerships are crucial to creating awareness and educating people about the impact of plastic waste on the planet and how they can contribute to a change that we all deserve.”

Kuda’s collaboration with Wecyclers emphasises its commitment to sustainability and championing proactive efforts through education, engagement and action to create an environmentally conscious population and a sustainable tomorrow.


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Defending the Foundations for Connectivity

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By Engr. Gbenga Adebayo

In 2001, when the first GSM call was made in Nigeria, how many of us would have envisaged the digital world that we live in today?

Defending the Foundations for Connectivity

Gbenga Adebay, chairman, ALTON

The pace of growth and the rate of adoption of telecoms solutions in Nigeria has been revolutionary. It is a globally acknowledged case study that we should be proud of and a clear demonstration of what can be achieved.

Almost all of us today are reliant on the network connectivity that it has enabled in different shapes and forms. From the simple need to communicate with loved ones, to the digital platforms that enable our access to and consumption of entertainment, financial products and other critical services.

Our reliance on these systems is becoming more and more acute, whether it is citizens, governments, or corporations.

System downtime is increasingly disruptive and offline manual redundancies are often in the advanced stages of being phased out. The pace of this transition is not slowing down. With the core infrastructure in place, innovation is driving the exponential growth of services that ride on it. From the fully adopted social media that has changed the way we interact, to the emerging Artificial Intelligence (AI) revolution.

While this innovation is enabling exciting new possibilities, there is a tendency to focus on those opportunities, to the detriment of the core infrastructure on which it rides.

It is imperative that we retain a focus on the optimisation of that infrastructure and enable continued investment in its development.

We have seen how the transition from 2G, through to 3G, 4G and 5G have each enabled the development of more and more sophisticated solutions.

The continued development of core infrastructure has to be sustainable, and over the last few months we have begun to see the challenges that the operators that provide it are facing.

Both MTN and Airtel have declared significant foreign exchange (FX) losses in Nigeria, and the stress is not linked to them alone.

The entire ecosystem is battling with a range of challenges that must be addressed. If we fail to do so, the downstream impact on innovation will be severe. Telecoms infrastructure requires a base level of investment to maintain its current capabilities, and significant additional investment to expand and grow. It is capital intensive and that capital has to be generated through sustainable business models.

At the heart of the challenge the industry faces is the issue of rising costs.

Recent financial losses are directly linked to the cost of operating towers that rely on inputs like diesel, which have increased significantly as the Naira has depreciated.

The provisions large telecom companies have had to make, and the consequent losses and impact on their reserves is a red flag.

It tells us that business as usual is not sustainable. If we continue as we are, then those companies will struggle to continue to invest in and maintain existing services.

But those costs are not the only challenge. General cost inflation, multiple taxation, regular and damaging vandalisation of infrastructure and the costs associated with regulatory compliance all help contribute to the high cost of operations.

We cannot continue to follow a path that asks those companies to simply accept those rising costs. It is no longer sustainable, and we have reached an inflection point.

This is a critical moment for the industry.

How we approach and resolve it will define the future of Nigeria’s digital economy.

If you want to be able to enjoy the benefits that digitisation brings. If we want the infrastructure that enables AI and helps us drive growth, then we must take action now.

Cost-reflective tariffs, like it or not, are simply non-negotiable. We have seen the impact of price controls in other segments of the economy, like power.

If providers cannot operate sustainable business models, then they stop investing. When that happens, the existing infrastructure starts to crumble.

For power, a consumer can choose to take ownership of the solution by buying a generator, or a solar panel.

For fuel, the government can step in as the provider of last resort and manage a subsidy regime that mitigates the impact on the population. Those options are not available in the telecoms sector. There is no self-help solution.

We fully understand and appreciate the financial stress that Nigerians are experiencing today. The cost of living is the single most significant factor in most people’s daily lives.

But those people are still able to enjoy the benefits that connectivity brings, at the price they paid before these challenges became so acute.

Imagine a future in which the gains of the last twenty years are reversed. Nigeria, and Nigerians simply cannot afford it. The pain that we would feel under those circumstances would be exponentially worse.

We need to find a long-term, sustainable and manageable solution to this problem. Prices will need to rise, but action needs to be taken in a measured way, through sustainable conversations and partnership with the government. It is time to address this head on.

 

Engr. Gbenga Adebayo is chairman, Association of Licensed Telecom Operators of Nigeria (ALTON).


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