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MOBILE's CLIMB DOWN HERE, GO UP THERE!
FIXED’s SAY MOTIVE IS TO KILL COMPETITION
Forces of competition and the struggle to retain customers are conspiring to make Nigeria’s mobile service providers to come down on their recharge card denominations. Charges at roadside call-centers which serve low end customers have, however, gone up. At last count MTN and VMobile have now introduced 200 Naira denomination of recharge card down from 450 and 500. But this is happening at a time when call-center charges for mobile calls moved up from N20 to N25 per minute.
A few fixed service providers argue that their mobile counterparts engage in price movements not necessarily to improve their revenue fortune but sometimes to ‘kill competition’. One angry PTO complained to NCC recently that ‘As a wholesaler to them, we have operating costs and collection costs and see no rational in their charging a retail subscriber as low as N10 per minute while we are paying them N11.52. It is very clear that paying them N11.52 and receiving N5.52 constitute a threat to your effort in creating a level playing field’
Nigeria requires $3b per annum to improve QoS
There was consensus at the recent 4th Nigeria Telecom Summit in Abuja that the Telecommunications industry would require an estimated USD$3billion of funding injection per annum in the next five years going by what telecom operators are saying constitute major challenges for dealing with today’s poor quality of serve vis-vis a high 240% growth rate in connection figure in recent times. Nigerian banks claim to have committed $1.4billion into the industry in four years with Guarantee Trust Bank leading the pack with USD$700m into Direct exposure and syndication for mobile operators.
SAT-3 and NITEL Privatisation
Nigeria eventually announced during the week that the Nigerian Telecommunications Ltd, NITEL, would be sold without the SAT-3 infrastructure. Looks like the juiciest asset in the deal is gone. That will matter to many investors but not to equipment manufacturers to whom the present arrangement may means no much difference. The coast may be clear on who gets NITEL.
DIAGNOSES OF THE NIGERIA 4TH TELECOM SUMMIT
Delegates to the recent 4th telecom summit took on issues of Unified Licensing Regime, Technology Convergence, Universal Access (Rural Telephony), Quality-of-Service (QoS), Backbone Infrastructure, The Challenge of institutional funding and Interconnect debts in the industry.
At the end of the Summit, areas of consensus included several matters namely, that:
· Nigeria has the fastest growing telecommunication market in the world; the number one GSM country in West Africa; the number one Fixed Wireless Country in Africa; the most liberalised market in Africa; the best telecommunication regime in Africa with proper enabling laws and regulatory transparency;
· The recent and current trend in Nigerian Telecommunication Industry has been very eventful; and subscriber base has been expanding for all operators by all standards;
· With rapid expansion of subscriber base comes many challenges – especially in regard to QoS delivered to consumers;
· Unified Licensing is a proper approach to move from the current compartimentalized licensing regime and consequent market segmentation to a technology-neutral and service neutral Licensing regime, which is otherwise referred to as Converged Licensing regime;
· Under a Unified Licensing regime, multiple services such as mobile telephony, fixed telephony, internet, broadband, long distance services, etc can be made available by a single service provider;
· Therefore the Nigerian market and industry has a strong need for a robust regulatory framework and environment that provides the certainty of proactive industry regulation to match the dynamics of highly innovation oriented industry such as telecommunications;
· There is rapidly growing Technology Convergence which is blurring the traditional boundaries between telecom, datacom and Video/Broadcasting. Convergence is therefore upon us – leading to unified data, voice, video and multimedia communications; and poses a new set of regulatory challenge such as the case with
VoIP;
· There will come a time when regulations by NBC and NCC may overlap. Under such a situation regulations may have to be merged into a converged law and regulatory platform;
· Nigeria bemoans acute telecommunication infrastructure lacuna in the area of: Telecommunications BACKBONE, steady supply of ELECTRICITY and penetration of RURAL AREAS;
· There is an urgent need to address the Backbone Infrastructure lacuna problem in Nigerian Telecom and speed of deployment as well as robust bandwidth capability would be the key for moving Nigeria to the next level;
· There is need to give incentive and opportunity to the private sector so that they can participate in the Backbone Infrastructure buildup effort for the nation;
· Without appropriate level of Backbone Infrastructure and electricity power supply Nigeria’s hope to participate in global Call center outsourcing and similar digital opportunity businesses will remain a pipe dream;
· Suggested incentive for the private sector participation in Backbone Infrastructure buildup effort (business) include drastic import duty reduction, tax-break provisions, financial interest rate reduction, pioneer status and similar provisions. Therefore the Industry shall have to continue to engage the government on this incentive issues;
· There should be a competition in the Backbone Infrastructure level of Telecommunication business;
· Eventual Backbone Infrastructure solution must include Fibre Backbone with SDH and WDM capacities and capabilities;
· Such Backbone Infrastructure may contain provisions for National and Regional routes/layers;
· It is desirable that Backbone infrastructure buildup effort be based on private-public partnership so that issues regarding right-of-way and construction permit can be easily resolved;
· Alongside Backbone Infrastructure buildup, we must also address LASTMILE Infrastructure challenge through concerted pursuit of Broadband Solutions – such as Wireless Broadband, BoPL, DSL and
Fibre;
· Electricity Power Supply is considered to be the critical components of the Industry Infrastructure challenge in Nigeria. Therefore the Industry must continue to engage the government and the Power-Holding Company to improve Electricity Power Supply to substain the growth of the Industry. There must be regular power supply;
· Nigeria need evolve strategy for addressing the challenge of content creation – so as to move the us from the league of nation of downloaders to league of nation of uploaders. Such strategy shall include local content for web and equipment manufacturing;
· Ensuring as a matter of policy that all tertiary institutes have broadband access which should include training-the-trainers;
· All aspects of the industry is dynamic there should be education at all levels which should be on a continuous basis;
· The Local communities should be made to understand the commonwealth of infrastructure and their need to protect it;
· Strategies for Accelerating Broadband penetration in Nigeria must include Last-mile, Service and Backbone solutions based on Wireless, BoPL, DSL and Fiber;
· Desired government incentives for telecom and datacom buildup in Nigeria includes certainty of proactive regulation, finance and a duty-free policy for telecoms equipment importation is proposed – especially in regard to rural telephony projects;
· Nigerian Communication Commission (NCC) should intensify studies to create opportunities for a SMART SUBSIDY regime to attract investors into rural telecoms service provision;
· Universal Access scheme is accepted as the proper strategy to reach rural communities with telecommunications services;
· Incentives shall have to be given to niche players in the telecommunications industry desiring to take such services to rural areas;
· Such incentives shall have to draw from the USF disbursing in the form of smart subsidy, operational subsidy and other facilitations;
· Operators in the industry are encouraged to share facilities.
Debt Relief Sought For
PTO's
A call went out recently that debt relief measures for Telecom Operators
in Nigeria might be required to avoid significant dislocation in the telecom industry. Engr. Ogbonna Iromantu, pioneer Executive Vice-Chairman of NCC made the call at a NICOMM 2005 talk session Monday. He also expressed concern about the worsening multi-regulation regime in which state governments have been passing bills which practically seek to regulate aspects of telecommunications operations.
Uniform
Interconnect rates for operators?
As part of fallouts from the ongoing reforms being
canvassed and implemented by the Nigerian Communications
Commission (NCC), indications are that a uniform interconnect
rate may be implemented for all voice traffic on
telecommunications networks in the country.
Interconnect rates have been a
point of disagreements in the industry over the last few
years, especially as the Private Telephone Operators have
continued to complain that the present skewed arrangement was
unduly in favour of the GSM operators.
InterSwitch
makes bold move for cashless transactions
Foremost switching and e-payment company, InterSwitch,
in a bold move to encourage more cashless transactions, is
currently offwering merchants free online POS terminals. This
promo is part of the company's push to encourage more
Nigerians take up and use their debit cards.
InterSwitch debit cards are tied
to holders' bank accounts, allowing them to make payments in
realtime without the need to withdraw physical cash. The cards
can also be used to withdraw cash round the clock at any of
the ATMs on the network.
Data Driving
Subscribers' Choice of Telephone Service
Providers
In
version two of its data survey which was recently conducted
over the space of two months, DomainStandard Networks reports
that 71% of respondents considered data on their phone lines
as very important. 65% of respondents were willing to switch
over to another network in order to enjoy more comfortable
data tariffs, 30% were not sure, and only 5% were certain of
not migrating.
The survey, whose results which
were released on Friday and the second in line by
DomainStandard, had respondents from major cities across the
country, covered both GSM-based (GPRS) and Private telephone
(CDMA/TDMA) operations, and examined subscribers' attitude to
data services and tariffs on telephone networks. The survey
results also suggest that the NCC's push for a unified
licensing regime, where operators may offer a wide range of
services under a single license, is a step in the right
direction.
Speaking on the results of the
survey, CEO of DomainStandard Networks Mr. Yomi Adegboye said
that it was clear that "there is a growing awareness and
enlightenment in Nigeria that's seeing people ask for more
than just the ability to communicate by voice". Mr.
Adegboye has been at the fore-front of those canvassing for
the adoption of mobile data in bridging the digital divide in
the country.
NIGERIA ADOPTS
UNIFIED LICENSING TO CONSOLIDATE GROWTH
Proceedings at the recent 4th edition of Nigeria Telecom Summit in
Abuja give reason for cheers.
Convergence. Unification. Consolidation. These words competed for
prominence. NCC's and delegates' concurence on several aspects of
development paints the picture of a clear idea of what needs to be
done to exploit convergence
in digital technologies towards expanding access beyond the spheres
of Nigeria's urban centres.
Statistics
and research results furnished by consultants to NCC showing that
67% of Nigerians live in 38,000 rural communities give a certain and
worthy push for action in 'ruralisation' of telephony. And
Ernest Ndukwe, the Executive Vice-chairman of the Commission set the
tone of the Summit when, in a lead paper, he said ‘...We
[therefore], cannot afford to have the
majority of our citizens still unhooked from this vital tool for
development in the 21st Century..’.
Iindustry
leaders who constitute a higher percentage of the delegates
generally see the National Communications Act of 2003 as a very
smart and comprehensive document which not only saw convergence
coming but also regarding access to include the provision of voice,
data, and internet services to the Nigerian wherever he may be, as
important. This is the standard worldwide, and it is heartwarming
that there seems to be a general consensus among delegates to the
summit that unified licensing is a thoughtful masterstroke for
growth within the industry and indeed in the economy. Not a few
delegates wonder what Nigeria, with its acclaimed radical
growth approach, was still doing managing the communications
landscape using more than one regulator.
A
delegate argued that today’s technology is actually for the
beginner but the beginner has to be appropriately organised. Another
warned that the challenge of unified licensing is real and could be
a double edged sword except those who control what happens do
things which show that they appreciate a hidden danger of such
radical approach on innovation and ingenuity. If a guy wants to
provide a new niche service which has a high prosperity rating but
for which his startup financial resources are almost nothing. Do you
frustrate such a guy by asking him to come to take a very high-cost
license because he ‘can do anything he wants to do under a unified
license regime’? NCC’s reaction showed that the Commission is
thoughtful of and indeed ahead of those challenges and that gave all
the joy that delegates left Abuja with.
STARCOMMS, STARCOMMS STARCOMMS
EVERYWHERE
Starcomms, Nigeria’s fixed wireless operator whose network grew fastest
in the last two years, may be taking advantage of its strategic spread
to spearhead what may eventually become a neighbourhood operator
service. Shortly after adding Port Harcourt to its list of
sumptuous locations, the Company sent words to its dealers in Lagos,
Kano and Maiduguri and Portharcourt that it would partner with them not
only to sell products but to bring service-care to consumers through
them. It calls the initiative Starpoint Shop franchise scheme. It also
says there is a joker to come very shortly after the scheme’s takeoff in
Lagos.
ITS NOW
CYBERSCHUULNEWS.COM
To coordinate its e-publications, the publishers of
CYBERSCHUULNEWS family of
e-magazines have adopted the name cyberschuulnews.com as the
coordinating control. They also have thrown the door open to
contributors to the publications in all areas of managing the effort.
Contributors can locate anywhere in the world and are responsible for
deciding what they want to contribute and also what they want to take
out of it.
Cyberschuulnews commenced in 2001 as an weekly
e-bulleting of THE EXECUTIVE CYBERSCHUUL[ Nigeria’s Premier Institute
for training in telecommunications and Information Technology] with 86
subscribers, all alumni. It eventually extended subscription to a wider
audience and increased the scope and number of the e-magazines to 2 in
2004, 3 in mid-2005 and 4 very recently. These include
cyberschuulnews,
cyberschuulshout,
telecom-E-review
and cyberschuulnewsWEEK.
The Institute no longer plays any role in the affairs of the
publications which are now being produced by collaborators in Abuja,
Manchester and Long Islands.
CORONER'S INQUEST INTO JOSEPH'S DEATH
ORDERED BY COURT
Lagos State Government went to court to request for a coroners inquest
into the actual cause of death of former CEO of MOBITEL and President of
ATCON Engr Charles Alaba Joseph. The request was granted and a
team of three government lawyers has been announced to carry out the
investigation. Engr. Joseph died September 15, 2005 in circumstances
that remain unclear and first autopsy carried on his body reported death
by gun shot while a second which police authorities commissioned said
the engineer must have died after a fall from a height. Not a few people
have contempt for the manner of police handling of the case and it is
now clear even the government of Lagos State shares such worries.
CYBERCRIME LAW
TO EMERGE SOON
The National
Assembly may soon pass a Bill seeking to secure computer systems and
networks in Nigeria as well as protect critical information
infrastructure by providing criminal liabilities and penalties for
undesirable activities carried out using computers and other
information and communication technology devices.
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MINUS ONE:
VODACOM
OPTS OUT OF BID for NITEL
Vodacom has, again, pulled out of the race to buy into
NITEL for which it went into bid with its 50:50 partner,
Telkom of SA. The advertised reason for the pull out is
Nigeria’s insistence to trade both NITEL and Mtel together
whereas Vodacom would have preferred doing business only in
mobiles. Insider contacts in Johannesburg however said that is
not all there is. He promised to confirm the actual reason by
phone or by mail but never did. We did not press either since it
is not important. It is only Vodacom itself that does not know
that it cannot do business in Nigeria.
What is important is that with Vodacom’s withdrawal, it requires
only one other withdrawal to leave the field open for the only
equipment vendor in the contest to coast home. It is strange
that Nigerian officials went into a process that may end up
giving up NITEL to equipment manufacturers rather than tested
operators. They once gave its management to upstart consultants
who spent 18 months to put the firm in severe coma.
MOBILES :
MOST PATRONIZED INFORMATION CHANNEL
eShekel’s, Africa’s leading technology research house,
said recently that a major finding from its most recent survey
is that the mobile phone has become the most patronized
information medium among mobile subscribers in Nigeria. 25% of
mobile phone subscribers utilize their phone more than they
watch TV (24%), listening to radio (21%), browse the internet
(15%) or read the newspaper/magazines (14%).
This result shows the growing consumer shift from standalone,
single function mediums to those that are convergent,
feature-rich, and multifunctional. Devices supporting more than
one function are beginning to have an edge over stand-alone
devices.
Mobile adoption and patronage seems to be helped on by its
growing multi-functionality. Contemporary GSM phones now come
with near-professional cameras. They also serve as address
books, path finders, digital messengers, browser, FM stereo
players, just to mention a few. Mono-functional devices are
gradually ‘going into extinction’, and the mobile is gradually
replacing or supplementing traditional mediums of communication.
eShekels’ report is available on sale at
info@eshekels.com
COMPETITIVE WI-FI- TAKES OFF AT ATLANTA AIRPORT
Various Wi-Fi access points, using mainly
Cisco equipment, were announced opened in
Atlanta airport last week as three service
providers, Boingo Wireless Inc.,
Concourse Communications Group LLC and
Sprint Nextel Corp compete for attention.
The facility is however owned by the Airport
Authority and it must have been done to enhance
competition. Airports which do not offer WiFi
access may be running out of fashion as
passengers' desire for working while waiting for
flights seems to be gaining ground by the day.
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