For any transformation or development to take place in any sector of an economy be it in developed or developing countries such as Nigeria, a legal framework is required to guide such transformation. It is the legal framework if adhered to that will provide the direction such transformation or reform should go.
It also provide fundamental guideline on the activities of players in the industry, such as what operators as the case may be are expected to do in their operational activities as well as government intervention that will provide level playing ground to ensure that operators are given equal opportunity to compete.
This was the case in the country’s telecommunications sector in 2000 when the federal government under Chief Olusegun Obasanjo decided to liberalize the telecommunications sector. Government then put together a legal framework, the National Telecommunications Policy, which was designed to herald the expected liberalization of the sector. It is also the policy that guides Nigerian Communications Commission (NCC) in its regulatory framework as well as gave opportunity for inflow of both foreign and local investment in the sector.
The September 2000 National Telecommunications Policy assisted in moving the country from 400,000 active telephone lines in 2001 to the present 75 million lines among other achievements.
It is against this backdrop and the need to foster development in the sector as well as address other challenges in the sector, that the federal government through Alhaji Ikra Biblis, Minister of State for Information and Communications, few weeks ago inaugurated a 25-man committee in Abuja to undertake the task of reviewing the current National Telecommunications Policy. He said the policy was being reviewed due to new trends in the industry, which have made the current document outdated.
He said the review is crucial to government’s efforts at developing the telecommunications sector to meet short, medium and long-term goals, initiative measurement of national growth indicators. The committee, chaired by Mr. Isaiah Mohammed, the former executive director, Nigerian Telecommunications (Nitel), has three months to submit its recommendations.
The minister said the previous document had helped Nigeria to surpass the ITU’ teledensity figure of one line to 100 people in three years.
Biblis said: “In less than 10 years, we have more than 75 million active lines in the various networks, and the teledensity figures have gone beyond 50 per cent mark as against the 10 per cent envisaged by the policy in 2000”.
The minister said the review of the blueprint should have been done at least once before now because of the rapid growth in the sector. “Some of the areas the document focused on in September 2000 may have been eroded with time” he said.
The committee comprising experts in the industry, government officials and journalists was asked to examine issues arising from the rapid global telecommunications growth, the evolution of new media and the challenge of information security for the new policy regime.
Mohammed expressed the readiness of members of the committee to meet the expectations of the government.
“In the light of development of the sector and to stay ahead of international recommendations, the committee will ensure that telecommunications is delivered to every part of Nigeria. We have to deliver and we shall deliver,” he sad.
Ernest Ndukwe, executive Vice Chairman, Nigerian Communications Commission, said that he expects the committee to produce an update policy that would transform the industry.
He said: “Telecommunication is a highly fast-changing industry and therefore, we need to keep pace with global trend. The review is a good initiative that will give investors a roadmap for investment in the future.”
Ndukwe listed areas the committee should address as Internet and need to look at a case where the entire country is covered by transmission infrastructure and its broadband infrastructure is expanded”.
Lanre Ajayi, chairman, Nigeria Internet Group (NIG), said that the current policy lead emphasizes on telephone which it has been achieved going by the growth in teledensity. He said what the country need now is broadband infrastructure, stating that the new policy should reflect that, which will therefore bring issues such as online applications, cyber security and evidence act. “How we intend to go about these should be addressed by the new policy,” he said.
He added that the implementation of the existing policy was successful in that the telephone penetration target it set out to achieve was surpassed. He expressed optimism that the new policy expected to address other areas of telecommunications as well as lay foundation for development in the sector will be met when it is final reviewed and release for implementation.
Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (Alton) said the current National Telecommunications policy had a five year action plan and have met and surpassed the expectations of government and stakeholders in the industry. He noted that as at 2000 when the policy was promulgated it was not envisage that the industry will record 75 million active subscriber lines which is an indication of tremendous growth in the sector.
Adebayo who is also member of the review committee added that a review is necessary as technology is dynamic as well as challenges of the industry which is a product of growth in the sector.
He said that there is need to fashion the policy in order to address those industry challenges. According to him, due to rapid changes in technology, there is need for the policy to preempt technology and accommodate foreseen as well as unforeseen developments. It should also protect infrastructure and service providers, as well as address the issue of convergence where technology has brought broadcasting and communications together.
He added that the new National Telecommunications Policy must be prepared to accommodate such convergence. He however pledge the committee readiness to carry out the task of bringing out a draft that will address issues in the industry required for development of the sector and the country in general.
Achievements of the current policy
Nigeria is one of the biggest and fastest growing telecom markets in Africa, attracting huge amounts of foreign investment, and is yet standing at relatively low levels of market penetration. Far reaching liberalisation has led to hundreds of companies providing virtually all kinds of telecom and value-added services in an independently regulated market. The mobile sector, which has seen triple digit growth rates five years in a row since competition was introduced, has been joined by a number of additional players under a new unified licensing regime which is expected to also boost the country’s underdeveloped Internet and broadband sector. Third generation mobile and WiMAX wireless broadband services are being rolled out at a rapid pace.
Nigeria has overtaken South Africa to become the continent’s largest mobile market with now over 74 million subscribers, and yet market penetration stands at less than 50% in early 2010. The network operators are investing billions of US$ to expand their networks and improve the quality of service in order to avoid sanctions by the industry regulator, NCC. 3G services have been launched, and increased competition comes from an array of additional players who have entered the lucrative mobile market. Declining ARPU levels are forcing the operators to introduce new services and transform themselves into converged broadband service providers.
Nigeria, today records a strong standing in the world information society due to the quantum growth telecom has ushered in the last decade.
In the past eight years of telecommunications sector liberalisation, NCC sources say subscriptions to telephone services have risen to the current level of over 74 Million active connected lines. This growth and advancement in telecommunications within the last decade has improved the nation’s ICT ranking in the world and has positively impacted all sectors of the nation’s economy. Nigeria has also become Africa’s largest telecom market.
The achievements in the industry so far can be attributed largely to the foresight by government in implementing a successful sector reform and providing the enabling and conducive environment with respect to policies and regulatory regime. The federal government has proven its commitment to promoting a regulatory environment that is independent, fair, transparent and predictable".
Before the licensing of the Digital Mobile Operators in 2001, private investment in the telecommunications sector in Nigeria stood at about $US50 million. Between 2001 and now, the sector has attracted about $US18 billion in direct local and foreign investment. These high investment levels have been attained because Nigeria has become one of the most desired investment destinations for ICT in Africa not just due to the potential of the market but also due to the stable policy and regulatory regime.
The role of the policy maker must of necessity be separate from that of the regulator. The situation where the policy maker tries regulating the industry when there is a regulatory body in place would run contrary to International best practice, and creates regulatory uncertainty which investors do not like.
Maintaining a stable and predictable operating environment is essential for attracting investment and avoiding actions that can constitute a disincentive for investment or challenge the sustainability of returns on investment capital. The telecoms sector is very capital intensive and therefore, to continue network expansion, improve quality of service and increase coverage in Nigeria, emphasis must be on ensuring an attractive operating environment.
Stakeholders are optimistic that the committee with their practical experience in the industry will produce an ensuring National Telecommunications Policy that will usher in the next frontier in the growth and development of the sector.
NCC Moves to Review International Termination Rate for Voice Services
The Nigerian Communications Commission (NCC) has embarked on a cost-based study to set the new pricing regime for mobile international termination rate (ITR) for inbound international voice calls in the country.
The ITR is the rate paid to local operators by international operators to terminate calls in Nigeria.
As part of the process for the rate determination, the Commission has organised a virtual stakeholder engagement forum with relevant industry stakeholders to intimate them with the ongoing cost-based study and the need to cooperate with Messrs Payday Advance and Support Services Limited, the consultants engaged to carry out the study
Addressing the stakeholders in Abuja recently, Prof. Umar Danbatta, executive vice chairman of NCC, said the study has become imperative following the various implementation constraints arising from contending industry and market dynamics that met previous efforts at finding an optimum price for the termination of international voice services in Nigeria.
Danbatta, who was represented at the forum by Adeleke Adewolu, executive commissioner, Stakeholder Management, NCC, said through the new ITR pricing, the Commission will be able to balance the competing objectives of economic efficiency and allowing operators the latitude to generate reasonable revenue.
The EVC, however, explained that in 2013, the Commission issued a determination stating that mobile termination rate (MTR) rates were the same irrespective of where the call originated, a clause he said was largely misconstrued by operators at that time to mean that ITR should be the same rate as the MTR.
He said this led to operators ignoring the international cost portion, where ITRs were agreed at MTR level without a positive residual to cover the costs of the international leg for local operators.
“As a result of this, the ITRs continued to decline, in line with the MTR glide path and as the ITR was set in Naira, it suffered a further downward slide in dollar terms following the currency devaluation.
“Ironically, the Nigerian operators paid the international operators in dollars to deliver international calls which created an imbalance of payments as the ITR in Nigeria declined,” he said.
As a result, Danbatta said Nigerian operators’ profitability and commercial results were negatively affected putting Nigeria’s ITR below that of most countries with which it makes and receives the most calls, thereby making Nigerian operators perpetual net payers.
“This has, therefore, led to undue pressure on the nation’s foreign reserves, which continue to get depleted by associated net transfers to foreign operators on account of this lop-sidedness, hence the need for Nigeria, with volatile currencies, to regulate the ITR to prevent or mitigate the imbalance of payments with international operators,” the EVC said.
According to Danbatta, where ITR is not properly regulated, it tends to have a negative effect on a market like Nigeria with major supply-side challenges and associated socio-economic implications.
“So, setting a rate substantially above the MTR has resulted in a number of repercussions. One of such is the consumer shift to online channels as calls are increasingly made through Internet Protocol (IP)-based technologies such as Skype and WhatsApp because of high international call prices.
“To this end, an economically-efficient ITR that is cost-based will maximise economic benefits to all stakeholders,” Danbatta told the stakeholders.
Earlier in her remarks, Director, Policy, Competition & Economic Analysis, Yetunde Akinloye, said the forum is aimed at formally engaging with and sharing the perspectives and insights of industry stakeholders and ultimately enlisting their collective support in relation to the inputs and requirements towards the determination of a mutually- realistic ITR in Nigeria.
She noted that the project commenced on March 10, 2020 with a kick-off meeting but was stalled by the challenges associated with the COVID-19 pandemic, necessitating the need to explore emerging channels of engagement to move forward and ensure the completion of the project.
Akinloye reiterated the Commission’s commitment to continuously provide a conducive environment and level-playing field for the effective interplay of factors that would sustain market development and growth, while ensuring the provision of qualitative and efficient telecommunications regulatory services for the benefit of consumers and licensees.
Ericsson Accelerates 5G for Enterprise with Acquisition of Cradlepoint
Ericsson has agreed to acquire Cradlepoint, the US-based market leader in Wireless Edge WAN 4G and 5G Enterprise solutions. The investment is key to Ericsson’s ongoing strategy of capturing market share in the rapidly expanding 5G Enterprise space.
Cradlepoint complements Ericsson’s existing 5G Enterprise portfolio which includes Dedicated Networks and a global IoT platform.
The combined offering will create valuable new revenue streams for customers by supporting full 5G-enabled services for enterprise, and boost returns on investments in the network.
Cradlepoint will become a fully owned subsidiary of Ericsson while continuing to operate under its existing brand. Cradlepoint employees will remain within the company, headquartered in Boise, Idaho. It will be part of Ericsson’s Business Area Technologies & New Businesses.
The acquisition price amounts to an enterprise value of USD 1.1 b. with the transaction expected to close before the end of Q4 2020, subject to closing conditions. The purchase price, which is funded from Ericsson’s cash-in-hand, is paid in full on closing.
Cradlepoint’s sales for 2019 were SEK 1.2 b. with a gross margin of 61%. Ericsson’s operating margins are expected to be negatively impacted by approximately 1% in 2021 and 2022 – where half is related to amortization of intangible assets which arise from the acquisition. Cradlepoint is expected to contribute to operating cash-flow starting in 2022. Ericsson’s 2022 group financial targets remain unchanged.
Wireless wide area network (wireless WAN) Edge solutions connect through 4G and 5G to deliver fast, secure, and flexible connectivity wherever and whenever it is needed for businesses, mobility and critical frontline emergency services. Cradlepoint is strongly positioned in a market with underlying growth of 25-30%.
Börje Ekholm, President and CEO Ericsson, says: “Portfolio-near acquisitions are an integral part of our earlier communicated strategy. The acquisition of Cradlepoint complements our existing offerings and is key to our strategy of helping customers grow the value of their 5G network investments. Ericsson is uniquely positioned to build on Cradlepoint’s leadership position in Wireless Edge and the wireless WAN market.
Combining the scale of our market access and established relationships with the world’s biggest mobile operators we are making a strong investment to support our customers to grow in this exciting market. I would like to extend a very warm welcome to all Cradlepoint employees.”
George Mulhern, CEO and Chairman, Cradlepoint says: “We have led the way in bringing the power of cellular networks and technologies to enterprise and public sector customers – helping them connect beyond the limits of traditional wired WANs. Ericsson with its global 5G leadership is a great match for us and I am very excited to continue to scale and expand our business together.”
Founded in 2006, Cradlepoint has more than 650 employees, providing wireless WAN solutions that deliver enterprise-grade connectivity. In addition to the company headquarters in Boise, Idaho, USA, the company operates a research and development center in Silicon Valley, California, and new market offices in the United Kingdom and Australia.
Cradlepoint’s subscription model combines cloud-delivered software with hardware endpoints, support and training.
Ericsson’s long-standing collaboration with Cradlepoint dates back to the launch of 4G in the U.S. market more than a decade ago.
Startups & Investors Set to Meet Virtually at the ISN Hubs Annual Gathering & Demo Day
Innovation Support Network, Nigeria’s largest Hub network, is giving ten startups from across the country the opportunity to pitch before local and foreign investors at its inaugural Demo Day on September 24.
The ISN Demo Day is part of the two-day ISN Annual Gathering 2020 which would be holding virtually from 23 – 24 September, 2020.
The ISN Annual Gathering is the biggest convention of Hub founders, administrators, key partners and stakeholders and is targeted at growing visibility, building sustainable models and driving collaborations for the growth of Hubs as Entrepreneur Support Organisations in the country.
This year’s Annual Gathering “Stronger together – developing frameworks for collaboration” is very relevant at this time when Hubs and other members of the tech and innovation ecosystem need to become more collaborative.
In addition to the Annual Gathering, ISN Hubs would be hosting the ISN Hubs Demo Day on 24 September 2020.
Selected startups from within the ISN Hubs network would pitch virtually to an audience of investors, Corporates as well as members of the Development & Impact Community.
According to the Chairman of ISN Hubs, Tomi Davies, the ISN Demo Day is an opportunity for Angel investors to get a front-row view of some of the startups including a few outside of Lagos and Abuja, which they previously may not have had access to.
“This is a great opportunity for Hubs to showcase the startups that they are supporting, for startups to show what they are working on and the solutions that they are creating and for investors to get a better understanding of what is happening in the Nigerian tech and innovation ecosystem. It’s a win-win-win for everyone”. He concluded.
The first ISN Annual Gathering was held on 23 and 24 October 2019 at the Civic Center, Lagos. This year, due to the prevalence of post-COVID limitations on public events, the Annual Gathering would be held virtually on 23 and 24 September 2020.
Fayo Williams, partnership director, ISN, stated that “moving the event online has actually created an opportunity for us to reach a larger audience – not just across Nigeria but indeed, across the World.”
The event would hold for two days via Zoom and would feature two-panel sessions on Understanding the Innovation Support Ecosystem as well as Stimulating demand for homegrown solutions on September 23.
As a follow on to the second session on Day 1, the ISN Demo Day would hold on September 24. Register here to attend.
Innovation Support Network (ISN Hubs) is a not-for-profit Business Member Organisation made up of over 100 entrepreneurship, impact, innovation and technology Hubs across Nigeria.
ISN Hubs champion policy, drive collaborations and promote structures that help grow Nigeria’s innovation ecosystem. A Hub is an environment which provides Entrepreneur Support Services to startups by providing access to four critical resources: skills, infrastructure, funding and network. Hubs include business incubators, startup (or seed) accelerators, co-working spaces, makerspaces, hackerspaces and other structured innovation environments.
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