Written by Sopuruchi Nnaemeka
Survival of the fittest has gone beyond Darwin’s principles of natural adaptation to being the driving force of entrepreneurship.
Competition for scarce resources, which in this case are the factors of production - land, labour, capital and entrepreneurship has been quite exhausting for Nigeria’s small telecom companies.
This therefore calls for concerted effort on the part of the sector regulator, the Nigerian Communications Commission (NCC) to device a survival strategy for small operators. Although this appeal may seem preposterous as this is in no way part of the commission’s mandate, it is nevertheless in good fate, considering how the sector has grown in leaps and bounds and how the fringe players could actually fill those gaps and plug the holes left by the big operators.
With the birth of GSM in Nigeria came fixed wireless telephony which is generally more suitable for home and office use. Apart from serving as reminders of the old analogue telephone machines, the fixed wireless sets have been useful as easy and affordable devices - occasionally being even more reliable than GSM. The ease of access of the fixed wireless networks depended on the fact that their frequencies were seldom subscribed to full capacity, not to mention being over-subscribed.
But in the cut-throat competition for market share with the GSM operators, most of the fixed wireless networks have fallen off the train. It is therefore no surprise that after 10 years and counting, it is only MTN, Globacom, Airtel and Etisalat that have remained dominant players in the telecoms sector. Despite offering relatively cheaper and often better voice services, fixed wireless networks such as Intercellular, Multilinks, Starcomms, Reltel, Zoom, and a host of others have gradually fizzled out of reckoning. Visafone remains the only exception out of the whole lot.
While the GSM players have eyes fixed on conquering the mobile spectrum and strategising to push affordable broadband services to rural communities in consonance with the national broadband plan, the fixed wireless operators seem to have resigned themselves to existing on the fringes. Prospecting for strategic advantages may explain why there was a general lack of interest amongst GSM operators in the recently concluded 2.3GHz spectrum auction conducted by the Nigerian Communications Commission (NCC). Of the major GSM operators, only Globacom showed a little more than passing interest while the others withdrew from the bid which was won by Bitflux Communications Limited.
Giving reasons for pulling out of the 2.3GHz frequency spectrum auction, CEO of Airtel Nigeria, Segun Ogunsanya, said the company was more interested in the 700MHz spectrum. The 700MHz Digital Dividend spectrum according to industry experts, is better suited for operators looking to roll out broadband services in the not too distant future. This an similar examples, show how the big operators are able to muscle the fixed wireless networks out of the way.
Part of the challenges the smaller operators have faced is being overambitious - striving to roll out national coverage in a country as huge as Nigeria where there are no pre-existing infrastructure. Rather than identify and go for niche markets, they tend to overstretch themselves and easily get worn out in the process. They could easily fill the vacuum of rural telephony or in urban settings, brace up to corporate organisations as target markets.
As the distance between GSM and fixed wireless operators continues to extend, one hopes that the regulator soon evolves a scheme that will help not only to accommodate but to stabilise these small and medium players. One sees in them the opportunity to bridge the gap of rural telephony as well as the vehicle that will deepen rural internet penetration - simply because the big players have enough on their menus trying to satisfy the ever growing and sophisticated urban markets. Thus, NCC could help speed up the ICT phase of Nigeria’s telecom development by simply lending a helping hand to these small/medium operators.
Going by the sector’s sterling contributions to the nation’s economy, it is imperative to harness every opportunity to encourage enhanced entry, participation and sustenance of growth among players. This will not detract from but rather induce competition towards cost efficiency, better quality, and consumer satisfaction.
This way investment inflow as well as its positive impact on other sectors of the economy such as agriculture, commerce and industry, oil and gas and education can only become more intense and much more than is being expected.
Therefore, the NCC should always endeavour to look back at the small/medium players and help them to tag along. There is no gainsaying that the programmes of the commission in collaboration with the Ministry of Communications Technology will continue to sustain the growth of the industry and its rising contribution to the GDP.
The future lies with ICT and every player whether it be an investor, a regulator, other stakeholders, or just a mere subscriber, is important.Sopuruchi, an economist writes from Enugu
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