News
High Operating Costs: NCC, stakeholders kick as telcos threaten service outage
By Kayode Sanni-Arewa
Telecom operators have warned that the excruciating financial obligations they are burdened with at the moment may push them to adopt load-shedding formula of the power sector in providing telecom services in the country.
But the regulator, the Nigerian Communications Commission, NCC, in a swift reaction, said it would not be arm-twisted by the operators’ threat.
Load-shedding is a formula that the electric power provider uses to relieve stress on a primary energy source when demand for electricity is greater than the primary power source.
It is a service formula which denies power supply to an area at a time just to relieve stress on the power source.
Chairman of the umbrella body of the telcos, Engr Gbenga Adebayo, disclosed this at an event put together by the Financial Derivatives Company, FDC, titled ‘’Telecom Industry 2.0: The Next Investment Frontier in Nigeria.’’
Addressing concerns of debilitating telecom services in the country, Adebayo said the country’s economic woes have impacted the telcos so badly, to the extent that they might not be able to service all their facilities at the same time.
Adebayo said the point at which telcos have found themselves at the moment is where they could only service a part of their facilities at a time, meaning that the area they are able to service will enjoy better services, while other areas not so lucky at the time may just have to bear epileptic services.
Telecoms sector, victim of its own success ’
Adebayo said: “The question to ask is why has government found it difficult to take advantage of different advocacies to sustain a healthy telecom sector despite these advocaies coming from verified data and indicies?
‘’I will say it is because the telecom sector has become a victim of its own successes. The behaviour of the public sector towards using the sector to better the economy is at variance with what is obtainable in other climes.
‘’The behavior of those that superintend over government agencies is poor and anthitetical to progress. Remember that when the operator signed agreement to provide telecom services in the country in 2001, the part Nigerian government signed was to provide 18 hours of power supply to the operators.
‘’That part of the bargain has not been fulfilled since then. Yet, the greater part of our operating expenditure, OPEX is on power.
“Multiple taxation from different government and non-government agencies is another hydra-headed problem, just as the banking sector debt to the telcos have also culminated to the poor state of infrastructure maintenance in the telecom sector.
“As we speak, there is an Association of Telecom Landlords whose primary aim is to fix rental charges for telecom facility deployments. This will be in addition to over 40 different taxes and levies the telcos face in the course of their operations.
“With all these, services will continue to be impaired. Today, we are heading to a situation where telecom services will be provided in parts because telcos may not be able to service all their sites at the same time.”
Price increase has become imperative —MTN CEO
Corroborating Adebayo was the CEO of MTN Mr Carl Toriola who joined the meeting on Zoom.
Toriola said that the severe sustainability challenges the telcos currently face need urgent attention to salvage the entore ICT sector.
He said despite the growth over the past two decades of liberalisation, the sector is now threatened by rising costs and unsustainable pricing.
He said: “Price increase has become imperative, it is now an absolute necessity because the sector is in an intensive care unit and needs urgent rescue to avoid total collapse”.
Expressing concerns that the sector will lose more investments as the rot digs in, Toriola said: our fundamental challenge is that the financial returns expected from the industry are now so low that they threaten its very survival.
“Nobody is going to put in $1 with the expected return of 60 cents on the dollar,” he said.
“There’s no way under the surface of the earth, in the kind of inflationary environment and forex devaluation that we’ve seen, that an industry can maintain prices the same for 11 years.
“The telecoms sector has faced escalating costs across the board — from the cost of capital to the soaring expenses of maintaining infrastructure like base stations and diesel generators.
“Without adjustments to pricing, the industry’s ability to function and attract investment is in jeopardy.”
However, the telcos’ position has drawn reactions from critical stakeholders, including the regulator, the Nigerian Communications Commission, NCC, National Association of telecom subscribers of Nigeria, NATCOMS, among others.
NCC reacts
A reliable source at the NCC said the regulator would not be arm-twisted by the telcos’ threat because they are known to be deploying several tactics to get the regulator to approve tariff hike for them.
He said: “We agree that the operating environment is difficult but it is not only for the telcos, every other sector is going through same hard times. If the operators say they cannot provide quality services because of economic conditions, it is not strange. It is their strategy.
‘’The reason they have not gone to where you have access gaps is because of low revenue they could attract in those places. This latest load-shedding formula is a subtle threat to get the regulator approve tariff hike, which they know is not possible that way.
‘’We cannot be arm-twisted by subtle threats “ the source who didn’t want his name mentioned, said.
Subscribers ‘ll hold NCC responsible—NATCOM
But in a sharp reaction, the President of NATCOMs, Chief Deolu Ogubanjo, said the subscribers will hold the NCC responsible if the industry collapses because, according to him, load-shedding will collapse not only the telecom sector but banking, education, health and other sectors which are now dependent on telecom services.
He said: “Telecom has become a legacy with the Nigerian society now, because telephone is life. In several stakeholder meetings, we have advocated that the telcos should be allowed a decent level of tariff pricing to tally with the high operating cost and the regulator is not doing anything about it when it has seen that these telcos are crashing under the weight of operating costs. It is not fair.
‘’It is possible that their OPEX may not be able to carry routine maintenances and what that may lead to is service downtime as we are witnessing now. If anything happens to the telecom sector today, the banking, education, health and entertainment sectors among others will go with it.
‘’This is why the regulator should act fast, else subscribers will hold it responsible if the industry collapses,” he threatened.
huge foreign direct investment into the country.
On infrastructure deficits, the telcos complained they still lacked access to essential telecommunication services due to a myriad of challenges, including multiple taxation and regulations and prohibitive Right of Way (RoW) charges, inadequate electric power supply and vandalism of telecommunications infrastructure.
They also advocated legislation that designates telecommunications infrastructure as critical national infrastructure as a way of protecting assets and network infrastructure in the country, considering the escalating security threats facing telecommunications infrastructure in Nigeria.
The telcos also claimed that telecommunications infrastructure development required substantial investments in network expansion, maintenance, and technology upgrades.
They added that despite the adverse economic headwinds, the industry remained the only one yet to review its general service pricing framework upward in the last eleven years, primarily due to regulatory constraints.
They also argued that for a fully liberalized and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatened the industry’s sustainability and could erode investors’ confidence.
The joint statement also asked government to sustain the culture of independence in the regulatory landscape as safeguard against undue influence and unwholesome incursion into the Nigerian Communications Commission, NCC’s domain.
They believe regulatory independence would inspire trust in the telecommunications sector and encourage investment.
Stakeholders, analysts side with telcos
Meanwhile, stakeholders and telecom industry analysts have supported the telcos’ call for a flexible pricing model, saying it would open doors of more opportunities for the sector.
A senior lecturer and former HOD, Computer and Information Sciences Department, Trinity University, Dr. Falade Muritala Adesola, said: “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.”
News
Katsina gov presents N682bn 2025 budget to State Assembly
Governor Dikko Radda of Katsina State on Monday presented the State’s 2025 Budget Proposal to the state House of Assembly.
This is the second full year budget the governor is presenting to the House, which is in the sum of N682,244,449,513.87, covering Recurrent Revenue and Expenditure.
The Budget’s Recurrent Expenditure stands at the sum of N157,967,755,024.36 representing 23.15% while, Capital Expenditure stands at N524,274,694,489.51 representing 76.85%.
The Governor in his speech, announced that, the total of this budget when compared with that of the 2024, has an increase of N200,535,619,501.61, representing 40% increase.
The Governor, at the beginning of his speech, assured the House that his administration has achieved many of its goals and is on course to meet and exceed its targets.
He insisted that his administration has successfully reversed the tide of insecurity which severely threatened the peaceful co-existence of people in the State.
“Many of our local governments have been restored to normalcy while pushing the bandits to the fringes of the forests and, Insha-Allah, to the end of their existence.
“We have expended a lot of resources in fighting insecurity, and we shall continue to do all we can to protect lives and livelihoods in our dear state. I thank the Honourable Members for your support and dedication to ultimate victory,” he said.
The Governor while ranking MDAs by allocations, revealed that the Economic Sector got N302,246,140,569.76 representing 44.3%, followed by the Education Sector with 95,995,873,044.70 representing 14%.
In the same vein, the Ministry of Agriculture and Livestock Development got 81,840,275,739.70 representing 12% while the Ministry of Rural and Social Development got 58,728,146,293.72 representing 9%.
Other sectors such as the Ministry of Water Resources, 53,832,219,322.46 representing 8%, Ministry of Environment, 49,835,521,799.25 representing 7%, Ministry of Health, 43,881,752,172.75 representing 6%, Ministry of Internal Security and Home Affairs 18,938,508,746.95 representing 3%, Ministry of Works, Housing and Transport 9,684,806,758.56 representing 10%.
Other sectors he said are in the sum of 230,759,902,908.71 representing 31% of the total proposed budget
News
NNPC’s failure to fix refineries might encourage Dangote to be monopolistic
Despite bickering between the Dangote Petrochemical Industry and the Nigerian National Petroleum Corporation Limited (NNPCL), a group of Nigerians in Diaspora has entertained fears that the leading regulatory agency might be secretly encouraging Dangote Refinery to be monopolistic in oil distribution in the country.
Dr. Donald Illiya, Global President of Nigerians in Diaspora Movement
(NDM), in a statement signed Monday morning from London, United Kingdom, said the public faceoffs between the NNPCL and Dangote refinery is confusing, and might be to distract Nigerians, while the regulatory body encourages Dangote to be the sole oil distributor in Nigeria, by suppressing the state owned local refineries and hold them continually in comatose.
“The Nigerians in Diaspora Movement have watched with perplexity the choreographed performance between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Petrochemicals Refinery, which is meant to keep exploiting Nigerians by making them pay more than reasonable pump prices for refined petroleum products.
“For us, taking in the state of the nation’s economy and the ongoing cost of living crisis, we are of the view that Nigeria’s fate is tied to the state of government-owned refineries, which must be made functional to cause a consequential drop in the prices of fuel and a positive knock-off effect on the cost of living.
“From our review of the murky situations around the refining, importation, supply and pricing of petroleum products, we are constrained to conclude that NNPCL and its officials are aiding Dangote Refinery to emerge as a monopoly by failing to revive domestic refineries while obscuring this fact by being publicly hostile to each other”, the statement said.
The group, while asserting high level of corruption in the energy sector, said, despite spending over N17 trillion to rehabilitate the Port Harcourt, Warri and Kaduna refineries from 2002 to 2022, and still spending more, even under the present regime of President Bola Ahmed Tinubu, the local refineries have remained comatose.
“We are concerned that the unfolding drama is part of a larger plot to conceal the fact that NNPCL has kept its track record as a cesspit of corruption, which is most prominent in the phantom turnaround maintenance of the government-owned refineries. From when NNPCL Group CEO, Mele Kyari assumed office in July 2019, the administration of President Muhammadu Buhari approved $1.5 billion for the rehabilitation of the Kaduna, Port Harcourt, and Warri refineries. Another N54.66 billion was spent on refinery rehabilitation from January to June 2022.
“More funds have disappeared into the private coffers of those managing NNPCL such that additional monies have been spent even under the current government, bringing the total expenditure on refinery repairs to approximately N17 trillion on turnaround maintenance of the nation’s three refineries between 2002 and 2022.
“The only output Nigerians have had from this huge expenditure are the ever-changing delivery dates for the refineries to resume operation. In November 2023 a December 2023 target date was announced for Port Harcourt Refinery, and by December of that year, March 2024 was announced as a new date only for this to be altered at least three other times.
“The completion of repairs on Kaduna Refinery was set for the first quarter of 2024, but the refinery has only produced stories on why it is being delayed. Warri Refinery has not fared any better, as a similar first quarter of 2024 target date for commencement of operations, as announced by Mele Kyari, turned out to be folklore”, the group added.
They are of the opinion that, “It is consequently plausible that the failure to make these refineries functional is beyond incompetence and the theft of the funds meant for repairing them. It is now glaring that the refineries are being kept moribund to create a favourable condition for the emergence of a monopoly. This is a tragic turn of events at a time when jurisdictions worldwide are taking bold steps to prevent predatory and monopolistic tendencies to protect citizens and businesses”.
Nigerians in Diaspora Movement, therefore, urged “President Bola Tinubu to take decisive steps to purge the rot in NNPCL so that domestic refineries can resume production and ward off the dangers of succumbing to a monopoly, which also presents a single point of failure for the nation’s fuel supply”.
News
16 Days of Activism: Speaker Abbas Decries Increasing Violence Against Women
-
News24 hours ago
Obasanjo narrates how he escaped becoming drug addict
-
Metro14 hours ago
Farmer allegedly beats suspected thief to death in Ondo
-
Metro14 hours ago
Army destroys 34 illegal refineries in Niger Delta
-
News14 hours ago
Many Pastors Are Not Enjoying Their Marriages Due To Wives’ Behaviours – Bamiloye
-
News14 hours ago
Abia bans unauthorised free medical outreaches
-
Foreign15 hours ago
Hezbollah launches largest attack on Israel, hits Ashdod naval base, Tel Aviv
-
Sports15 hours ago
Lukaku keeps Napoli top of Serie A with Roma winner
-
Sports15 hours ago
Mbappe on target as Real Madrid cruise to Leganes win