The Nigerian Communications Commission (NCC) has restated its commitment to the development of the ICT industry and would remain proactive and functionally specific while discharging its roles as stipulated in the Nigerian Telecommunications Act. The Chief telecom regulator and Executive Vice Chairman of the NCC, Dr. Eugene Juwah, stated this at the third edition of the Nigerian Telecoms Executives and Regulator Forum held in Lagos last month.
The Forum is one of the growth initiatives for the telecommunications industry, designed by the Association of Telecommunications Companies of Nigeria, ATCON, for the purpose of creating a veritable opportunity for key industry players to interact with the regulator, with the aim of building a continual good working relationship between industry players and the regulator.
According to ATCON President Dr. Lanre Ajayi, the Forum is also aimed at creating a platform for the regulator to update the industry on the regulatory direction and plans for the industry in the coming years, as well as an avenue for the regulator to receive feedback from the industry with a view to understanding the challenges and prospects industry players have to grapple with and explore to ensure sustained growth of the industry.
This year’s edition saw both telecoms executives and the regulator disagreeing and agreeing with each other on the policy, regulatory, strategy and capacity direction for the industry. However, as the discussions progressed, it became clear some of the disagreements were largely a function of ignorance of the regulator’s mandate, lack of awareness and inaccurate reading of the capacity profile of the industry and policy lacuna, among others.
These were the issues: InfraCo: A Strategy to achieving Open Access Model; Corporate Governance in Nigeria’s Telecoms Industry: A panacea for Survival of Telecom Companies; Local Content in Nigeria’s Telecoms Industry: What should be the Policy Direction? How do we ensure effective Utilisation of Licensed Spectrum?
Discussions clearly revealed the Forum is truly living to its billing. The industry was on the same page with the regulator on InfraCo as the strategy for achieving open access, although there were concerns on competition and status of legacy infrastructure. There was significant consensus that corporate governance code was necessary to ensure survival of the industry and the executives pledged their commitment to abide by the recent corporate Code of Governance released by the regulator, with the legal minds quipping the code deserves urgent review even as its implementation is underway. ATCON says, however, it has a code subscribed to on a primary basis by its members and would commit to the one released by the regulator on a secondary basis.
On licensing of spectrum, the industry appeared satisfied with the way and manner the regulator has been handling licensing in an open, fair and transparent basis, but canvassed the creation of a spectrum market where those who obtained licenses, but could not operationalise them would resell them.
As expected, the hottest debate was excited by issues on and about local content in the ICT industry, where most telecoms executives argued they were being marginalized in the scheme of things. It was clear at this point major stakeholders do not have a common understanding as to what constitutes local content and the philosophy underlying it with some perceiving it as allowing Nigerian companies to provide services while to others it is about allowing them to develop capacities and employ Nigerians. To the first group, local content is about doling contracts to Nigerian companies.
Those who perceive local content as integrating both capacity building and employment opportunities for Nigerians, presented statistics on the Nigerian population, which said that by 2015 it would hit 180 million. Of this there will around 56 million under the age of 14, and those under the age of 34 in the region of 60 million. They reason that in the area of local content, these youthful Nigerians will be important in running small- and medium-scale enterprises in the telecom sector.
“The SMEs and small scale ATCON members who are looking for opportunities should be able to develop capacities and employ more people. It is very important that we think beyond transferring contracts to Nigerian companies,” they say, adding that the NCC has a critical role to play in all of this.
Juwah agreed: “One of the executives talked about the demographics of Nigeria and requirements for employment. I do not think I have much to say here, except that I completely agree that we must create employment. NCC is already doing this. We must reap the benefits of capitalisation. If you remember, we said our CDMAs are dying because they are not well capitalised. They take a lot of loans from the banks and they are finding it difficult to maintain the loans for their operations. So, we need the foreigners who are capable to bring in more capital to do the major work while locals can ride on their infrastructure.
“In the wireless access infrastructure licence we issued, Nigerians participated and actually won, so Nigerians are getting involved in infrastructure projects that require large capital outlay. In the VAS market, we hope that a lot of Nigerians who are creative and innovative can actually develop applications that can ride on the facilities of the incumbent infrastructure providers under. If you read our information memoranda (IM) it connotes that partnership with a Nigerian company is necessary. First of all, the company must be registered here in Nigeria and for them to participate in the technical bid they need Nigerian partners. Having said that, it is not in NCC that these issues should be addressed; the laws of Nigeria permit 100 per cent foreign ownership of businesses. NCC is not going to change the law. It is an issue that all of us should collectively address and send it to the National Assembly, so that a second look can be taken in this area of foreign investment opportunities in Nigeria. Nigeria is one of those emerging economies where local content is controversial. It is political and also socio-economic and ATCON as a body can also raise it at the appropriate quarters.”
Although the chief industry regulator articulated his responses in the keynote presented, he occasionally veered off his keynote in presenting the regulator’s viewpoint and scarcely his personal view on some of the issues. The NCC EVC made it clear his Commission would not bow to pressures, but would remain open, fair, firm and forthright in the discharge of its responsibilities as permitted by the Telecommunications Act. According to him, while some Nigerian companies are competent and could match their counterparts anywhere in the world, those with this claim are few.
Why is local content not under the NCC? “The issue of local content is not under the purview of the NCC. It is being regulated, operated and implemented by the National Information Technology Development Agency, NITDA. It is part of the mandate of the Act establishing NITDA. So, government has put this completely under NITDA. What we can do as regulators is listen to the telecommunications industry and take whatever is the general view that prevails to NITDA, so that they can include it in their regulatory interventions,” Juwah said.
He said the world was moving towards convergence in ICT, so NITDA was very much in the fold of regulating ICT, just like NCC is also carrying out its own mandate, stressing it was not far-fetched for an establishment like NITDA to get involved in the ICT sector and do things that it was mandated by law to do. Juwah pointed out that NITDA law put local content issues squarely under its purview. According to him, the NCC is part of the Committee that NITDA is putting together to develop the policy and articulate local content issues. However, the delay by the Nigerian government in naming a converged regulator for the ICT industry is not helping matters.
On the competence of local companies in executing jobs in the industry, Juwah said there were competence issues yet. “You know that I am open. And, I will say it based on my experience. I am not an operator; I am only a regulator. I can talk about Nigerians executing budgets in NCC, which at times we do have some Nigerian companies that performed very well. Some of the very well known Nigerian companies actually do disappoint, because they believe they can collect money and not do anything… In fact, the issues became so bad they had to be reported to security services. Otherwise, people would think that it is NCC…
“So, while we are clamouring to do projects, we must be prepared to do them. If you do not do it we will not pay you. If we pay you some mobilization and one way or the other you vacate our APJ, we are going to report you to the EFCC. So that is a competence issue. We have seen a lot of incompetence; I am sorry to say. And, all of us in the course of executing projects do not just collect money and run away. This is real, it happens.”
There were calls that foreign and local companies need to pay disproportionate annual operating levies skewed in favour of locals, exclusivity in the manufacture of SIM cards by locals and seizure of operational licences for regulatory infractions. About these, Juwah said: “Somebody mentioned exclusivity in the manufacture of SIM cards in Nigeria. This is something that will soon come out. It may not be popular these are issues that the policy is driving at establishing so that there will be a local capacity in the production of SIM cards and, may be, higher infrastructure. But it will be difficult for us to approve disparate annual operating levies, AOLs. Our Act mandates us to create a level playing field in our regulatory intervention. It is from the AOLs that the NCC services USPF…it is from the AOL that the USPF obliges corporations to go to unserved and under-served areas and these are areas where we are expecting our local service providers to be active. We have to push out the opportunities and it is left for local companies to take them up; if they don’t take them up we give them to foreign companies.”
While Juwah said the Commission would not shirk its regulatory responsibilities, he admitted enforcing a license seizure regime in Nigeria would be daunting citing socio- cultural and political reasons that could militate against achieving this.happy wheels