FOREX crisis affecting investment in telecommunication equipment – ATCON President


Mr. Olusola Teniola, is President, Association of Telecommunication Companies of Nigeria (ATCON) in thisinterview with Anuforo Adaobi Love, bares his mind on the poor network services, hike in call and data charges and other sundry charges. Excerpts:

Are the telecommunication companies meeting the demands of ATCON in services rendered to the general public? 

ATCON is an umbrella advocacy body made up of both small and large operators across all segments of the telecommunication value chain. Since the inception of ATCON the telecommunication space has contributed significantly to the country’s GDP. Last count in Dec 2016 amounted to approximately 9% contribution to the country’s recorded GDP. This industry as of Dec 2016 had approximately 153m active subscribers and 83m internet subscribers. All e-payment platforms are operating using the investments made by our members to build the enabling infrastructure and Nigeria can boast of the largest telecom market in Africa – this is a demonstration that telecommunications companies are strong, resilient and adapting to the challenges of operating in a harsh business environment.

What can you say about the current poor network situation in the country as customers are lamenting? 

The network situation that currently represents the underlying enabling platform needs to be upgraded with much more capacity and this requires an increase in CAPEX spend than can be supported in the current economic cycle. The networks are congested during busy hours and data traffic has increased to such an extent that in parts of the network some customers maybe experiencing some level of sub-par performance. Earlier in the year, ATCON predicted that unless our members have access to favorable FOREX rates that further investments in much needed telecommunication equipment may come to a halt. So it appears that in Q2 2017 our predictions have come true and we call on Government to seriously allow telecommunication companies access to favorable FOREX window to aid import of much needed telecommunication infrastructure.

Why has telecom companies increased their charges, both calls and data?

 To the contrary, telecommunication mobile services and other Fixed Wireless Services (FWA) prices have decreased year-on-year despite inflation increasing, cost of diesel to run generators at the base stations increasing, threats of increased multiple taxation being applied and numerous other levies being charged. The underlying cost of providing telecommunication services to our members’ operations for both voice and data within Nigeria is very high and the price charged to the consumer is not in line with the cost of providing these services, so ATCON disagrees with this assertion.

How has the recession affected the telecom companies and what can they to survive this times?

The recession has caused a contraction in the spending habit of consumers and this has meant that the overall revenue attributed to the industry has trended negatively year-on-year. Any further elongation of recessionary effects will further put pressure on telecom companies operating margins and further place more pressure on our member companies to fund Operating Expenditure (OPEX) in an environment where the fixed costs are increasing. Most of our members have to adopt innovative solutions to survive .

What is expected of Nigerians and NCC with regards to the nonchalant attitude of network providers to the poor QoS being provided?

The destruction of telecommunication equipment including optic fiber laid across the country needs to stop and NCC needs to be the vanguard in ensuring that telecommunication equipment including base stations, optic fiber and other critical assets are fully protected by law enforcement agents. Vandalisation and theft of telecommunication assets contributes significantly to dropped calls and adds to the poor quality of service noticed by the public. Nigerians need to be on the watch and look out for those in the society who are hell bent on destroying property and report these people to the appropriate authorities to stop this once and for all. Otherwise, poor quality of service will never go away.

Why is cheaper to call from other countries than Nigeria?

On-Net calls in Nigeria and International calls from Nigeria are competitively priced in Africa. If one is comparing with calls made in other climes outside Africa, then once we have a cost base that reflects 24-by-7 clean power from the power utility companies and do away with powering diesel generators at each base station then we can do a like-for-like comparison. Until then the industry requires a lot more billions of dollars of investment to bridge that gap.

How has the current vacilating nature of the Naira affected ICT business in Nigeria?

More Naira is required to purchase a dollar. So therefore, in a recession where customers and clients are spending fewer naira then this generates fewer dollars, so the net effect is that ICT equipment produced aboard can no longer be purchased at an affordable Naira equivalent rate and this impacts the ability of companies to grow at the rates expected in the past by management.

Has the CDMA any future in the current mix of ICT in Nigeria?

Very unlikely. GSM and LTE technology is pervasive in Nigeria and Africa at the moment. Can it be brought back to use? CDMA is migrating to LTE networks and then LTE-Advanced and 5G technology. The technology battle has already been won and decided.

Which network can your give a pass mark?

All networks are under QoS examination by the regulator (NCC) and once they’ve finished the examination the NCC will issue the results. We are waiting for NCC to release the results in the very near future.