NCC: Tending Nigeria’s N6.4 trillion vault amidst Ebola

By Ehis Gbubemi

The deregulation of Nigeria’s telecoms sector has had an enormous impact on the economic and social development of the country in the last 15 years. This is both unique and amazing because the attempt to deregulate or liberalise many other sectors have not met with a similar success story like telecoms. To mention just few, the unbundling and privatisation of the electricity sector, the oil and gas industry, the divestment of government shares in many other companies have failed to yield any envisaged transitions, let alone, improvement in performance or service delivery by such institutions. The effort to concession or privatise the Ajaokuta Steel Company has become some sort of jinx, thus stalling progress in a sector regarded as the hub of Nigeria’s industrial dreams for decades.

According to the Bureau for Public Enterprises (BPE), total investment in Nigeria's telecommunications sector stands at $40 billion or N6.4 trillion. Director-General of BPE, Benjamin Dikki, identified the deregulation and the investment of private firms in the sector as achievements which have had a serious positive impact on the country’s GDP in the last few years.

"Today Nigeria is enjoying over 123 million active telephone lines compared to 450,000 lines before the reform. The sector now employs over one million Nigerians and has attracted over $40 billion in investments," the BPE boss further emphasised.

The figures quoted above are bound to change at the close of this year or early next year when the Nigerian Communications Commission (NCC), concludes another licensing auction wherein 14 licences in the 2.6GHz spectrum band would be allocated. The process which will see each slot costing $16 million will rake in a cumulative $224 million in revenues. According to the NCC, the spectrum is offered on a technology-neutral basis. The commission says it intends to follow the International Telecommunications Union (ITU), recommendation setting aside spectrum in the 2.6GHz band for the provision of advanced wireless broadband services.

Executive Vice Chairman of the NCC, Dr. Eugene Juwah, while addressing stakeholders at the 2014 Telecoms Executives and Regulators forum organised by the Association of Telecommunications Companies of Nigeria (ATCON) in Lagos, also acknowledged ICT’s significant contribution to Nigeria’s GDP.

Lauding the telecommunications sector for providing the foundation for operational efficiency in other sectors of the economy, Juwah disclosed that the Ebola Virus Disease (EVD), which has killed thousands of people around the globe especially in West Africa, has affected completion processes for the Infrastructure Companies (InfraCos) expected to facilitate broadband penetration in the country.

According to him, the commission is behind schedule in its completion processes for the licensing of the InfraCos because the foreign consultants hired for the implementation processes are scared of coming to Nigeria because of Ebola. Now that Nigeria has been certified by the World Health Organisation (WHO) to be Ebola free, one hopes this drawback will soon be overcome.

Reassuring the gathering on the commission’s determination not to relent, the EVC said: "However, I shall be travelling out soon to meet them. We are hoping to complete the process as soon as possible. Remember we are starting with Lagos and the North Central. The InfraCos will help strengthen Nigeria's broadband drive.”

Juwah listed some of the steps taken to reposition the telecoms sector to include the introduction of open access model; the launch of corporate governance code for the industry; prevention of anti competitive tendencies among industry operators; planned restructuring of the value added services market; auctioning of the 2.3GHz spectrum, among others.

On the open access model, Juwah said the process is meant to address challenges plaguing the sector, especially in regards to broadband penetration, adding that it will also encourage different players to participate fully in uplifting the status of the sector.

Interested applicants for slots in the 2.6GHz spectrum do not have to be network operators in Nigeria in order to qualify to bid in the auction, states the commission in the information memorandum it issued to the public. The memorandum also states that “Each winner who does not currently hold a Unified Access Service License (UASL), which is the operational licence, will be issued one at an additional fee of N374.6 million.”

Officially and unofficially rated as the largest telecoms market in Africa and fastest growing telecoms sector in the world, Nigeria’s ICT sector is full of prospects and potentials. Its impact on the nation’s socio economic life cannot be overstated. For instance, it has provided millions of jobs to the country’s teeming population of the unemployed, thereby bringing succor and relief to many homes. It has significantly reduced the operational costs of both large, medium and small enterprises; impacted positively on sectors such as banking, education, media, commerce as well as reduced the nebulous protocols in governance.

It is a hard task to attempt to draw a list of the tangible and intangible values added to Nigeria’s economy by the advent of a deregulated, liberalised and privatised telecoms sector. Suffice it however, to say notwithstanding numerous challenges including Ebola, it has been another case of “so far, so good.”

Ehis, a financial analyst, writes from Lagos