Connect with us

News

High Operating Costs: NCC, stakeholders kick as telcos threaten service outage

Published

on

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.

Advertisement

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.

Advertisement

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.

Advertisement

“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.

Advertisement

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.

Advertisement

“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.”

Advertisement

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.

Advertisement

‘’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.

Advertisement

‘’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.

Advertisement

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.

Advertisement

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.

Advertisement

‘’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.”

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

Change Negative Narrative About EFCC Being Used For Settling Political Scores- Reps

Published

on

………Ask Anti Graft Agency To Fight Financial Crimes Within Established Laws

.
……My Staff Are Poorly Paid, EFCC

…., States Why Fight Against Yahoo Boys Fierce

 

Advertisement

The House of Representatives has tasked the Economic and Financial Crimes Commission, EFCC, to purge itself from the negative impression that its being used to settle political scores and concentrate fighting financial and economic crimes within established laws.

The House handed the advise on Tuesday through the Chairman House Committee on Financial Crimes Honorable Ginger Onwusibe who led members of the committee on the 2024 oversight exercise on the commission.

The oversight covered extensive facility tour of departments and critical operational units of the antigraft agency.

In his terse remarks, Hon. Onwusibe challenged the agency to improve its operational activities in combating economic and financial crimes by complying with its 2004 Establishment Act and other relevant applicable laws like the Money Laundering ( Prevention and Prohibition) Act 2022: Terrorism ( Prevention and Prohibition) Act 2022: The Proceeds of Crime Act. 2022, as well as other statutes, that compels it to carry out these roles transparently with accountability and show that the negative maxim being peddled in some quarters that the agency is often being used for settling political scores is incorrect .

Advertisement

The committee assured that it will collaborate with the commission to actualize its mandate by enacting new laws or amending old ones and as well providing budgetary interventions, if it must strive tirelessly to be on top of its challenges

The House urged the agency to collaborate with sister agencies and desist from keeping suspects as- awaiting ‘trial in correctional centres nationwide

“At this point let me add that a recent visit to the Maximun and Minimun Correctional centres in Kirikiri Lagos State, numerous suspects have been awaiting trial for over one year and yet we are all acquainted with the saying that justice delayed is justice denied”

” It is on this note that we call on the EFCC, Attorney General of the Federation and the Judiciary to improve and ensure the administration of justice works and is efficiently delivered to the victims”

Advertisement

The House warned the agency to purge itself of rotten eggs in order to fight economic and financial crimes frontally, thereby stimulating the Nigerian economy

It also urged EFCC to focus properly on its mandate.

” The issue of appropriate and proper focusing on the mandate of the EFCC must relentlessly be on the front burner:

“Orders from competent courts , arrest and debt recovery must be pursued religiously” the House cautioned

Advertisement

But on its side, the antigraft agency said it has not deviated from its focus but rather working hard and fighting financial and economic crimes as enunciated in its mandate.

Chairman of the agency , Ola Olukeyede told his guest in his remarks during the oversight visit that the commission was doing much to fight financial and economic crimes and stimulate the Nigerian economy

He said so far that the agency has recovered over N250bn cash, tens of million of Dollars and other foreign currencies, with over 3000 convictions: 17000 petitions while also investigating over 20000,with about 4000 fresh cases , all being handled by a misery number of staff strenght

He noted that its priority is to improve the country’s image and stimulate its economy, such that there could be improvement in foregin direct investments and stimulation of the local economy.
Olukeyede however, argued that the agency needed more staff strenght, funding , better renumeration for staff because they were poorly paid. He also emphasised on modern day technology to fight the ever dynamic cyber criminals

Advertisement

According to the EFCC boss, it was important to give more salary to EFCC staff and deploy modern technology to fight emerging cyber crime dynamism . He expalined that the agency has increased efforts to fight Yahoo, yahhoo, boys because of their ability to crumble any economy within a twinkle of an eye

According to him, the agency was expanding its drag net to focus on ministries, departments and agencies infrastructural projects. ” “Go to MDAs and see their budget implementstion. It is not up to 20%”

“We want to ensure 50% infrastructural development” the anti graft boss announced, insisting that it would henceforth encourage monitoring of project implementation which was an aspect of preventing financial crimes

He said the agency has dismissed lots of erring staff, and will continue to dismiss and even prosecute them going forward.

Advertisement

Olukeyede disclosed that it had designed a template on staff integrity, using the Gift- Policy model

.” It is not every thankful gift we should collect” the EFCC boss warned

” I am advocating for more welfare improvement, better welfare, he said.

“We will do more recoveries, more convictions, but we need more resources to do our work, maintaining that, that was his stand on ethics and integrity .

Advertisement

Olokeyede’s demand for more salary wage for staff of the commission, is seen as an incentive to boost welfare and morale to fight financial crimes to standstill.

He stated that there was the utmost need to increase salaries of staff of the commission

The EFCC boss who spoke on his stewardship in the last one year, further added that it increased the war against Yahoo- Yahoo boys because of the consequences of their nefarious acts which could crumble a nation’s economy in a jiffy.

He argued that more technology was required to fight financial crimes.

Advertisement

For instance he explained that it was a common scenario then for thieves and armed robbers to attack and break into banks with guns and Dynamites

” But it is the same common and more easier scenario and task now to have Yahoo-Yahoo boys and bank thieves attack banks with technology in the comfort of their homes or hideouts”

“So we need technology and we also need to increase our fight against these Yahoo boys who can dismantle any economy within a twinkle of an eye

He called on the national Assembly to improve and increase its finances because fighting Financial crimes was a herculean task that requires adequate funding

Advertisement

Olokeyede who apparently was responding to criticisms of the commission’s over concentration on Cyber crimes/ thieves, perpetrated by Yahoo boys, said he has made tremendous impact in enforcement, investigation and conviction with an outstanding record convictions between October 2023 when he was appointed till date

Continue Reading

News

Trouble looming for Obaseki as Gov Okpebholo orders probe of his admin

Published

on

By Kayode Sanni-Arewa

Governor Monday Okpebholo of Edo State has ordered the setting up of a committee to probe the immediate-past administration of Godwin Obaseki for its failure to inaugurate 14 Edo Assembly lawmakers-elect into the 7th Assembly.

Okpebholo disclosed this while giving his inaugural speech as the new governor of the state.

Governor Okpebholo also ordered the State Chief Judge to immediately investigate the initial delay of former Governor Obaseki to inaugurate duly-cleared judges by the National Judicial Council (NJC) last year

Advertisement
Continue Reading

News

Naira may depreciate to N1,993 against dollar – Report

Published

on

By Kayode Sanni-Arewa

Nigeria’s naira has been projected to depreciate further to N1,993 per dollar in the coming days.

This is according to BMI, a Fitch Solutions subsidiary report title, ‘Weak Naira and Structural Challenges to Constrain Nigeria’s Medical Devices Market Growth’.

The report said the forecasted depreciation will be predicated on the 95 percent dependence on imports for pharmaceuticals in Nigeria.

Advertisement

According to the report, the development would erode both the health system and patient purchasing power.

“We expect that the naira will end 2028 at N1,993/$ from N306/$ in 2018.

“As the naira weakens, the cost of importing medical devices will continually increase, eroding both the health system and patient purchasing power, especially to invest in essential medical technologies given the underfunding of the public health sector,” the report stated.

This comes as Naira fell to N1681.42 and N1735 at the official and parallel foreign exchange markets on Monday.

Advertisement

This comes as FMDQ FX transaction turnover dropped significantly from $1.4 billion on Friday to $471.5 million on Monday.

Last Thursday, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, said the country’s external reserves rose to $40 billion.

Despite Central Bank of Nigeria’s interventions and external reserves rise in the last months, the naira has continued to experience fluctuations in the FX market.

Advertisement
Continue Reading

Trending

Copyright © 2024 Naija Blitz News