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The NCC, Telcos and the Tariff Discourse

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By Dr. Falade Muritala Adesola

The telecoms sector in Nigeria is viewed by some as a model of regulatory excellence. Other African countries often visit Nigeria to study the sector, aiming to understand the regulatory framework established by the NCC. This regulatory excellence is evident in the growth and success of the telecoms industry, which currently contributes over 16% to Nigeria’s GDP.

Aminu Maida, executive vice chairman, NCC

The telecoms industry in Nigeria is a source of pride for everyone; it’s arguably the only sector that can be considered a successful model of liberalization in the country.

 

Amidst all the successes, the industry is still faced with multiple challenges, including multiple taxation, vandalisation, and changing macro realities. Noteworthy of mention is efforts by the NCC under the new Executive Vice Chairman, Dr Maida to further reposition the industry. Whilst the focus in the past has always been quality of service (QoS) the direction under the new EVC has shifted to quality of experience (QoE) which is more customer-centric and places more demands on the telecoms operators.

The EVC has continued to emphasize this at various engagements with stakeholders in the industry. Beyond advocacy, the visible steps taken so far by NCC under Dr Maida aimed at safeguarding telecom infrastructure deserve commendation.  The recent incident of multiple fibre cut, which resulted in widespread network disruptions for one of the major telecoms operators, prompted swift action from the EVC. His advocacy for stricter penalties against perpetrators led to moves by the government to criminalize cable damages and vandalisation of telecoms infrastructure. This proactive stance not only deters future recklessness but also instils confidence among telecoms operators regarding the safety of their investments.  However, the long-term viability of the industry hinges on a multifaceted approach that will include protection of telecoms infrastructure, which the NCC is currently spearheading, and sustainable pricing mechanism.

The Nigerian economy is currently grappling with new economic realities that continue to threaten its stability. These realities are not unique to Nigeria but rather a global phenomenon affecting countries around the world. A complex set of factors are exerting considerable pressure on the global economy and causing a slowdown in global growth. This is occurring alongside a marked increase in inflation. As a result, businesses are confronted with a range of challenges including rising costs of capital, a tight labour market, and geopolitical risks. These challenges have been worsened by disruptions due to the COVID-19 pandemic, the war in Ukraine, Israel, and the tensions between the US and China. Many countries are revisiting their policies and implementing new strategies to navigate the turbulent waters.

In Nigeria, the struggle to strengthen the value of the naira to the dollar has continued to gallop as the Central Bank of Nigeria (CBN) continues to pursue new approaches to address the situation. However, challenges such as infrastructural deficit and security concerns continue to persist, further exacerbating the issue. Yet, Nigeria continues to face a significant rise in food prices over the past few years, worsened by the removal of subsidies on petrol, amongst other things. This has resulted in a weakened purchasing power for many citizens with attendant effects on businesses.

In recent times, Nigeria’s naira has tumbled across both official and unofficial markets due to increased forex demand, causing a significant spike in prices of goods and services across the country. The National Bureau of Statistics (NBS) reported that items contributing to the inflation’s headline index on a year-on-year basis are food and non-alcoholic beverages (16.42%), housing, water, electricity, gas and other fuel (5.30%), clothing and footwear (2.24%), and transport (2.06%). The NBS explained that the rise in food inflation on a month-on-month basis is due to an increase in the average prices of bread and cereals, potatoes, yams, and other tubers, fish, coffee, tea, and cocoa.

These developments paint a bleak picture of the current economic situation in Nigeria and amid all these, discourse around telecoms tariff review is beginning to take centre stage, drawing attention to the need for a delicate balance between economic realities, quality of experience, which impacts directly on customer satisfaction, and telecommunications industry sustainability. For over a decade, major telecom operators like Airtel, MTN, and GLO have maintained their pricing structures, despite mounting challenges such as currency devaluation and inflation while other sectors have adjusted prices to cope with economic fluctuations.

For instance, entertainment giant, DStv, has increased its prices more than two times in the past year. Netflix has also reviewed its prices. Nigerian Breweries have also adjusted their prices to reflect the current realities, but telecom operators have maintained their pricing despite economic fluctuations, grappling with a devalued currency and rising operational costs.

In Nigeria’s telecommunications sector, diesel consumption is a critical factor influencing service reliability and progression. With numerous sites dispersed across the nation, a substantial portion operates on generators 24/7, necessitating continuous fuel supply. This escalating cost of diesel not only directly impacts operational expenses but also cascades into broader challenges such as site accessibility and infrastructural maintenance. As prices soar across various sectors, the telecom industry continues to grapple with the dilemma of maintaining quality services while operating within constrained pricing frameworks.

The prevailing reality suggests that the long-term viability of the telecoms sector now hinges on striking a delicate balance between affordability and quality of experience for consumers on the one hand,  and profitability and survival for operators on the other hand.

Quality of experience stands at the forefront of consumer expectations in the telecom sector. However, the telecoms operators must continue to invest to maintain superior quality of experience. In the same vein, continuous and increased investment is a function of profitability. The telcos can only invest from their profits. There can be no investment without profitability. One way to gurantee profitability and sustainability of the industry is a review of the existing pricing structure.

Pricing autonomy is a linchpin for industry sustainability. The ability to set cost-reflective tariffs is indispensable for ensuring adequate returns on investment and fostering long-term viability. Telecom operators require a more transparent and collaborative approach to tariff adjustments, emphasizing the importance of a pricing framework aligned with operational realities. The current pricing window, sanctioned by regulators, is a foundation, but the industry needs greater flexibility to navigate cost fluctuations while ensuring service quality and accessibility remain uncompromised.

The clamour for cost-reflective tariffs is not merely about short-term gains but a strategic imperative to sustain the sector’s growth trajectory. The transition from 2G to 5G and with 6G on the way symbolizes the industry’s evolution, made possible by substantial investments that fuel innovation and expand service capabilities. However, without conducive regulatory frameworks that incentivize investment, the industry risks stagnation, jeopardizing future advancements and undermining service availability.

The telecommunications industry in Nigeria is currently at a crossroads where infrastructural challenges, pricing dynamics, and regulatory frameworks intersect, offering a unique opportunity for swift and collective action. A thriving and resilient telecommunications ecosystem has the potential to empower individuals, drive economic growth and enrich lives across the nation of Nigeria. Whilst the industry regulator has delivered commendably, prevailing realities demand a new approach to ensure continued viability of the sector.

Dr. Falade Muritala Adesola is a Senior Lecturer and former HOD, Computer and Information Sciences Department, Trinity University.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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Layer3 Implements World-Class Upgrade for WACREN Cloud Infrastructure

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Layer3 has announced the successful implementation of a state-of-the-art private cloud infrastructure for the West and Central African Research and Education Network (WACREN). This pivotal project, hosted in Nigeria, is supported by the AfricaConnect3 project, co-funded by the European Commission.

Layer3 was selected for this prestigious project after an international bidding and tendering process. The newly established private cloud infrastructure will serve universities, research and education networks across the region, providing a robust, secure, and scalable platform designed to meet the unique needs of the academic and research community.

Key features of the cloud infrastructure include its high performance and scalability, engineered to handle large-scale data and computational needs, ensuring seamless scalability as demand increases. The platform also incorporates cutting-edge security protocols to ensure high-level data protection and integrity.

Other features in this state-of-the-art infrastructure include:

  • Reliability and Redundancy: Equipped with multiple layers of redundancy and failover mechanisms to guarantee high availability and minimal downtime.
  • Customizable Solutions: Offers tailored services adaptable to specific institutional requirements, supporting a diverse range of academic and research activities.
  • Ease of Integration: Facilitates seamless integration with existing IT environments and other cloud services, enhancing operational efficiency.

This world-class private cloud infrastructure is a significant milestone for the educational and research sector in West and Central Africa. By providing a dedicated and sophisticated cloud environment, the project will:

  • enhance research capabilities as researchers and educators will have access to powerful computational resources and collaborative tools, to facilitate groundbreaking research and innovation that will ultimately lead to development in the region
  • improve educational outcomes as universities can leverage the cloud platform to offer more dynamic and interactive learning experiences.
  • boost regional collaboration: The cloud infrastructure will enable regional research collaboration as researchers in different institutions in different countries can work on joint research projects and educational programs.
  • drive digital transformation: By adopting cutting-edge cloud technology, institutions can accelerate their digital transformation journeys and stay competitive in the global education landscape.

“We are honored to have been selected by WACREN and the AfricaConnect3 project for this transformative initiative. Our team is excited to have delivered this world-class cloud infrastructure that will empower the educational and research community in West and Central Africa, driving innovation and excellence. This project underscores our commitment to providing top-tier IT solutions that support academic and research excellence.” said Layer3 CEO, Oyaje Idoko.

According to WACREN CEO, Dr. Boubakar Barry, “This WACREN Cloud upgrade marks a significant step forward for us as it will enhance our capacity to serve national research and education networks (NRENs) and their communities across our region.

“We will leverage the capabilities of this new cluster to drive our suite of community-driven platforms and services.  We look forward to the tremendous impact the expanded infrastructure will have on fostering research and innovation excellence across West and Central Africa.”

For more information about Layer3 and its services, please visit www.layer3.ng.

Layer3 is a leading IT and cloud solutions provider in Nigeria, specialized in delivering innovative technology solutions that drive business growth and efficiency. With a focus on quality and customer satisfaction, Layer3 offers a comprehensive range of services, including cloud computing, cybersecurity, AI-driven network solutions, and managed services.


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NITDA, FCT-UBEB, Collaborate To Foster Digital Literacy In Schools

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In a significant development in Nigeria’s educational sector aimed at boosting digital literacy among school children, the National Information Technology Development Agency (NITDA), is set to collaborate with the Federal Capital Territory Universal Basic Educational Board (FCT-UBEB) towards revolutionising the way young Nigerians engage with technology and equipping them with necessary skills to thrive in an increasingly digital world.

NITDA

The forgoing information is contained in a press statement e-signed by the Head of Corporate Affairs and External Relations at NITDA, Hajia Hadiza Umar.

As per the statement, the Director-General of NITDA, Mallam Kashifu Inuwa Abdullahi , made this known when he hosted a delegation from the Head-to-Head Debate Committee of FCT UBEB led by its Ag. Executive Chairman, Dr Alhassan Sule, at the Agency’s corporate headquarters in Abuja to discuss possible areas of collaboration.

Mallam Abdullahi , who was represented by the agency’s Director of the Information Technology Infrastructure Solutions (ITIS) department, Oladejo Olawumi, stated that the collaboration aligned with a pillar of NITDA’s Strategic Roadmap and Action Plan (SRAP 2.0) 2024-2027 which was to Foster Digital Literacy and Cultivate Talents.

While stating that the pillar was key to the proposed educational board’s debate competition, the NITDA DG emphasised the importance of integrating technology into education to capture the interest and potential of young people.

“Children today, often referred to as digital natives, intuitively use technology and unlike us, who are digital migrants, these children seamlessly adapt to new gadgets and platforms. Therefore, it is essential to embed digital knowledge in their learning environment,” he noted.

Abdullahi disclosed that the agency had been providing infrastructure and resources to facilitate educational transformation as well as digital learning centres across all states of the country.

He added that the Digital Literacy for All programme was a national initiative of the agency which was designed to extend digital education resources to all corners of the country and urged the visitors to key into the programme while he asserted that it would be instrumental in enhancing digital literacy skills among students and out-of-school children alike.

Highlighting the agency’s focus on emerging technologies, Abdullahi stated that extensive research and development were being conducted in areas of Artificial Intelligence (AI) and Robotics which were pivotal for future skill sets.

While referring to a recent collaboration between the agency and the Abuja Enterprise Agency on a Robotics competition organised for secondary schools in Abuja to spur interest in Robotics and technology among students, he said “I think we can work together in this area and make sure that Robotics interest is geared up among the youth.”

Elaborating on the Agency’s ongoing initiatives toward achieving 70 per cent digital literacy in the country by 2027, he further disclosed that the agency was working to integrate digital literacy into the national educational curriculum and providing hands-on experience with technologies like AI and Robotics.

While stressing the importance of addressing the needs of out-of-school children, he mentioned “We are developing programmes in partnership with various stakeholders to attract these children through incentives like school feeding, coupled with digital literacy and other educational training.”

Abdullahi noted that the multifaceted approach would ensure that children were not only fed but also equipped with essential digital skills that would pave the way for a more inclusive and technologically proficient future.

In his earlier remark, Dr Sule commended the agency for their various strategic initiatives to ensure a sustainable digitally transformed economy in the country.

While stating that the head-to-head committee was saddled with the responsibility of conducting the FCT Basic Schools debate competition, he noted that 900 students in the FCT would contest in a debate.

Sule said that finalists from the competition would be moved to a reality house which will be aired live on different media platforms where they would be trained on AI and Robotics.


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Group Seeks Restructuring of N15Bn USPF

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Association of Telecommunications, Information Technology, Cable Satellite Network Operators and Allied Services Employers of Nigeria (ATICEN) has again called on Dr. Bosun Tijani, minister of Communications, Information and Digital Economy,  and Aminu Maida, executive vicecChairman of the Nigerian Communications Commission (NCC), to make the Universal Service Provision Fund (USPF) work for the purpose it was created and be more accountable about the rural telephony projects.

Dr. Bosun Tijani, minister of Communications, Information and Digital Economy

According to the Association, the Fund should be restructured or scrapped if it continues to fail to achieve the purpose for which it was created. It noted that despite the Fund, the digital gap was still wider in the rural areas.

In December last year, the USPF committee led by the Minister unveiled a project on rural telephony powered by solar – one of the many initiatives that USPF aimed at expanding the communication network to rural areas across the country.

It would be recalled that stakeholders in the telecoms industry had called for the investigation of the Fund allegedly misappropriated. The USPF was established in 2003 with an initial N15 billion to promote the widespread availability and usage of network and application services throughout Nigeria.

The NCC charges telecom operators 2.5 per cent of their turn-over as licensing fees, of which 40 per cent of the licensing fees is transferred to the designated fund called USPF.

However, despite the Fund, a wider digital divide still exists in the rural areas as many rural communities in the country are yet to be adequately connected to the country’s telecommunication system.

This lapse has been attributed to the misappropriation of funds partly budgeted for that project by some officials who held sway in the sector in the recent past. Sensing the mismanagement of the fund, some players in the sector called on the Presidency and the National Assembly to investigate the utilisation of the Universal Service Provision Fund (USPF) earmarked to bridge the infrastructure gap in the rural area.

They made the call following the non-impact of the Fund established by the Federal Government to facilitate the achievement of national policy goals for universal access and universal service to information and communication technologies (ICTs) in rural, unserved, and underserved areas in Nigeria.

The Fund is being managed to facilitate the widest possible access to affordable telecommunications services for greater social equity and inclusion for the people of Nigeria.

It would be recalled that a sum of N15.174 billion was recommended for approval as the Universal Service Provision Fund’s 2019 budget. Since it was established, the industry players said it had never had any impact on the telecoms industry, claiming that the fund had not been used for the purpose it was established.


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