For consumers of telecommunications services in Nigeria, the intervention of the Nigerian Communications Commission, through its proposed National Broadband Network initiative, should come as a great relief given the prospect for growth in broadband services delivery. Arguably, internet services have improved in the country as the volume of international capacity grew exponentially in the last three to four years, with Main One, Glo1 and the WACS cable replacing epileptic services on the SAT III system managed by NITEL. At 26% or so mobile internet density and 45 million internet users reported by analysts in 2013, there is a marked improvement, although broadband connectivity – both in terms of service penetration and performance – are at an abysmal level with density around 6% and quality of services at best lackluster.
An intervention effort that seeks to support the roll out of critical distribution infrastructure needed to deploy pervasive and more reliable broadband services nationwide should ordinarily portend huge expectations for consumers. Moreso, service providers who have over the years laid the blame of limited drive in broadband services delivery and quality of service at the doorstep of infrastructure challenges in the distribution networks. These players are now poised to benefit from an open access model that promotes infrastructure sharing and enables them to focus on their core service delivery responsibilities, leaving those operators whose core competence is the operation of distribution networks to deal with the daily business of doing so.
It would thus appear a foregone conclusion that all operator and ICT services providers would be at the forefront of the NCC’s initiative, drumming up stakeholders’ support for it and canvassing its expedited implementation. This is against the backdrop of the immense benefit to their businesses, particularly the opportunity to improve their revenue from data services; gradually becoming the major earning booster as voice services revenue continue to decline and ARPUs in that service segment thins out. On the contrary, industry feedback suggests differently. It is no longer news that the major infrastructure owning GSM networks are opposed to the NCC’s idea of open access infrastructure deployment and are actively taking steps to ensure that the project fails to take-off or if it does, fail to achieve the set objectives.
Apparently, from the tone of their media campaigns and body language, large infrastructure owning GSM operators are reluctant to embrace regulatory intervention, particularly those that would further open-up the broadband market in Nigeria and the opportunities that abound in it for the people. Incidentally, these are the same set of operators that have failed to support the growth of broadband services. They view the NCC and government’s intervention and the proposed changes to the market structure as a pariah initiative, preferring that business-as-usual persist at the expense of the country’s chances of improving access to connectivity services and improving the lives of Nigerians – for as long as they profit from the structural imbalance in the broadband ecosystem. It is therefore not uncommon these days that they have become apostles of industry self-regulation, calling on the NCC to allow the market mature and self-embrace a workable infrastructure sharing model, at the same time spewing the now too familiar lines that increased regulatory intervention negatively impacts foreign direct investment in the Nigerian telecommunications sector.
Operators, irrespective of sizes, simply have no basis to suggest that changes in regulation are not required to move the market in the desired direction, particularly where attempts at industry self-regulation have failed at the behest of the same large operators. If anything, regulatory interventions and changes are part of the process of ensuring that competitive growth is sustained in any given telecommunications market. Indeed, they are a salient feature of, and integral to, the sector’s supervisory structures the world over. No Nigerian operator can claim that regulations passed in the early 2000’s, which were instrumental in creating the multi-billion dollar communications giants in Nigeria, should continue to remain the status quo as the nation progresses into the broadband era.
Taking a cue from other parts of the world, all economies trying to move into the information age have changed telecoms regulation to foster sharing of infrastructure and the growth of broadband through competition with infrastructure incumbents. Examples range from Europe, US, Mexico, and Kenya closer to home. It is thus a surprise that after extensive industry consultations, numerous consulting and global benchmarking studies with input from reputable institutions including the ITU and KPMG, the major telecommunication services operators remain adamant and are opposed to the proposal by the regulator to open up the broadband eco-system and foster growth through direct intervention.
One may ask: has Nigeria reached a broadband nirvana in terms of advancement in service access and quality that no intervention is required and we can all sit tight and enjoy the bliss of pervasive access to broadband services? Or is it that these large operators are fledging corporations and the proposed changes in the regulatory rules will affect their survival? The answer is a resounding “NO”.
Clearly, when large operators vehemently oppose industry developments that ordinarily advance their cause and mutually furthers the interest of consumers, the Nigerian consumers and authorities must recognize that the motives are at best self-serving, driven by greed. It is not in the interest of the consumers or the country as a whole. It reflects a desperate ploy to protect, at all cost, huge and closely held bags of profits these players derive from business as usual . They will stop at nothing, including the subversion of public interest and policies that are aimed at protecting those interests.
Curiously, If these players will stop paying lip-service to improving the lot of Nigeria’s broadband services isn’t a 6% broadband penetration level a key market incentive to pursue business opportunities more aggressively in that service segment and embrace the NCC’s initiative? Is it because this requires additional investment on their part or they are comfortable milking consumers off their hard earned money through voice services that 13 years on is more or less still epileptic? Sadly, rather than allow other potential investors enter the market and leverage their infrastructure and services, they spend a pittance of these profits heating up the polity and creating propaganda that changes will destroy the gains the country has enjoyed in telecommunications to date.
Could it also be that the telecom operators are persuaded by the current market model that guarantee 100% or more margins return on their existing infrastructure when they lease transmission facilities to others, as verified by available market data? Is it that they would rather assume a sit tight position, given the prospect of the proposed NCC’s model to liberalize access to common infrastructure at competitive rates and thus reduce the cost of services to consumers? . The process for establishing that framework is still active at this stage and continues to take more constructive feedback from stakeholders, to the credit of the regulator.
Today, global indices on internet readiness shows Nigeria lags behind other African countries like South Africa, Kenya, Ghana, Egypt and Tunisia, despite the huge broadband capacity available at its shores. To move beyond mere abundance of upstream connectivity and achieve a broadband revolution in Nigeria, the regulator must be undaunted in its pursuit of positive changes to the market structure that will stimulate growth and encourage innovations and further investment. The NCC must remain focused, and move decisively and quickly to change the status quo. Certainly, enhancing broadband access will reshape the lives of our poorly educated and unemployed youths, empower the global competitiveness of our businesses and economy and promote the overall well-being of our people.
May 2014 be the year of our broadband revolution.
By: Chukwuemeka Nnadozie
