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Telecoms Industry Still Unstable

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Telecommunications
  • Telecoms Industry Still Unstable

Despite government’s interventions, the foreign exchange policy largely unsettled the telecoms industry in two years of the Muhammadu Buhari administration, writes Emma Okonji.

Before President Muhammadu Buhari was sworn in on May 29, 2015, the value of naira had started depreciating gradually, but the situation worsened in the last two years of his administration, which caused instability in the telecoms industry.

In order to cushion the adverse effect of the high exchange rate of dollar to the naira and scarcity of the greenback on the Nigerian economy as well as stem the continued depreciation of the naira, the Central Bank of Nigeria (CBN) recently came up with some palliative measures like the introduction of new forex policy that granted some key sectors of the economy easy access to foreign exchange at reduced rate.

The telecoms sector was excluded from the priority list of the sectors that benefitted from the new forex measures, despite that the sector depended so much on foreign currencies for its operations. The situation boxed telecoms operators into a tight corner.
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Worried about the situation, the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo said the decision of the federal government to exclude the telecoms sector from the priority list, affected the purchasing power of telecoms operators, who could not order telecoms equipment for network expansion.

According to him, international traffic exchange, equipment procurement, systems upgrade, and network maintenance, all depended largely on foreign exchange, since every telecoms equipment is imported into the country. He said government must begin to see the telecoms industry as a critical sector that needs government attention, rather than see it as a consolidated sector that does not need government support.

Reacting to the issue of forex scarcity, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, admitted that the inability of telecoms operators to access forex adversely affected telecoms growth in the last two years. He, however, said the NCC intervened and secured a priority forex window for telecoms operators, which has never happened before. “The NCC had to step in and engaged directly with the financial regulator, CBN, and an agreement was reached for a priority window for telecoms operators, to enable them have access to foreign currencies in the midst of scarcity. So far, a couple of operators have been able to enjoy that priority window, and NCC will continue to push for more availability of forex for telecoms operators”, Danbatta said.

Broadband plan

The five-year broadband plan that was supposed to drive activities of the Information and Communications Technology (ICT) sector from 2013 to 2018, and make available, ubiquitous broadband for easy access, has not yielded the desired results in the last two years of Buhari’s administration. Although Shittu had said that the broadband plan would be reviewed so as to address its challenges, especially meeting the 30per cent broadband penetration target by 2018, the Chief Executive Officer of Pinet Informatics, Mr. Lanre Ajayi, blamed the inability of the broadband plan to meet target on lack of implementation of key factors that would have led to ubiquitous broadband access for Nigeria.

According to him, the broadband plan had good content but its implementation was poor. He said even at that, the present government has not commenced the process of reviewing the plan, few weeks to the end of the lifespan of the current broadband plan

The Chief Executive Officer of VDT Communications, Mr. Biodun Omoniyi, decried paucity of broadband in the cities, which he said, had led to high cost of broadband services rendered by telecommunications operators in the country, even though the country has excess broadband capacities at its shores.

He said the excess capacities were provided through the landing of broadband submarine cables at the shores of the country from Europe by MainOne, Glo 1, MTN WACS, and SAT-3.

Omoniyi, who blamed the low broadband capacity in the hinterlands on lack of coordinated efforts by the telecommunications operators to build a national backbone of broadband capacity from the shores to the hinterlands, called on the operators to form a synergy that would enhance the trunk capacities of broadband connectivity to cities outside the shores of the county.

According to him, once this is achieved, it would not only reduce cost of broadband services in the country, but would also boost broadband connectivity.

Licensing of InfraCos

The licensing of Infrastructure Companies (InfraCos) by the NCC has been slow in the last two years of Buhari’s administration.

Although the NCC had licensed two InfraCos for the Lagos and North central zones, ICT stakeholders have continued to express worries over the continued delay in the licensing of additional InfraCos, as promised by the NCC. They are of the view that licensed InfraCos were supposed to provide the backbone with which telecoms operators were supposed to ride on in offering broadband services across the country. They, therefore, wondered why the NCC was yet to license additional InfraCos.

Ajayi said the delay is affecting quick rollout of broadband services across the country, since rollout of broadband services largely depends on broadband infrastructure, which InfraCos were supposed to provide. He called on NCC to expedite action in the licensing of additional InfraCos, owing to its importance in broadband development and penetration.

President of the Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, said for Nigeria to realise the National Backbone Network (NBN), the Open Access Model that was introduced by the NCC in deepening broadband penetration in the country, needed to be fully implemented.

Teniola however expressed concerned that both MainOne and IHS that were offered InfraCo licence since 2015, are yet to provide the much expected broadband infrastructure in Lagos metropolis and the North central.

NCC had in January 2015, awarded a consortium led by MainOne, InfraCo Nigeria Limited a licences as the fiber infrastructure provider for Lagos, Nigeria’s commercial capital, as well as IHS to cover North-central. The InfraCo licence covers the deployment of metropolitan fibre-optic infrastructures within Lagos and North-central on an open access, non-discriminatory and price-regulated basis.

Service quality

Service quality in the telecoms industry has not been stable in the last two years, even though there had been slight improvement. The President of the National Association of Telecoms Subscribers NATCOMS, Chief Deolu Ogunbanjo, said the telecoms industry is contending with several challenges that are affecting the service quality across networks. He called on the NCC to organise a stakeholders’ consultative forum, where the issue would be addressed.

But Danbatta insisted that service quality has improved slightly even though there is still a gap between the standard set by NCC and what the operators are offering currently, with regards to key performance indicators (KPIs), as set by the NCC.

In the last quarter of 2016, the service quality improved slightly, but we are not near the stipulated standard set out by the NCC, Danbatta said.

He also said in the next few weeks, NCC would be publishing the performances of operators for the first quarter of the year, in terms of service quality and the subscribers would see the performances of their service providers.

Technology startups and small businesses

Technology startups in the ICT industry are faced with the challenge of seed funding in financing their solutions, and in the last two years, majority of them were unable to get investors who believe in their solutions, a situation that has been blamed on policy inconsistencies of the previous and present governments. Most of the technology startups, who are small business entrepreneurs, have good software solutions that could manage organisations’ operations, but organisations are yet to trust such solutions and prefer foreign based solutions at the detriment of local software developers.

Achievements

Despite poor policy implementation that bedevilled the telecoms sector in the last two years, some industry stakeholders are however of the view that some remarkable achievements have been recorded in the last two years.

Adebayo stated that the telecoms industry recorded stable regulatory environment under the NCC in the last two years. He said the NCC was able to sanitise and stabilise the telecoms sectors, through some policies implementation and monitoring, which he said, brought about a relatively steady growth of activities in the sector.

Ajayi also commended the federal government for its intervention on the N1.04 trillion fine imposed on MTN by the NCC, following MTN’s refusal to deactivate 5.2 million unregistered and inactive lines on its network, despite repeated warnings. NCC had fined MTN N1.04 trillion for flouting its orders to deactivate unregistered SIM cards on its network, which NCC said, constituted national security risk. It took the intervention of the Buhari’s government to save MTN from total collapse as it reduced the fine from N1.04 trillion to N330 billion and MTN had since commenced staggered payment of the fine. He said the timely intervention of the government not only saved MTN from total collapse but also saved the jobs of many Nigerians who work directly and indirectly with MTN Nigeria.

Ajayi equally commended the federal government for listening to the nationwide cry of Nigerians, who spoke against the planned introduction of telecoms service tax bill that seeks to hike telecoms tax. He said the idea could have affected telecoms operations and the subscribers who would have been subjected to pay more for telecoms services rendered by the operators.

Ajayi added the timely intervention of NCC in the matter affecting Etisalat and its 13 local bank creditors, was another feat recorded by the federal government, through the NCC.

Etisalat had in 2013, approached 13 local banks for a loan of $1.2 billion for network upgrade and expansion, and the money was sourced in both dollar and naira denominations. Few years after the loan was sourced, Etisalat could not continue with its repayment, blaming the high exchange rate and scarcity of dollar in the last two years.

The banks, however, threatened to take over the telecoms company before the NCC’s intervention.

In refinancing the loan, Etisalat was meant to pay certain percentage of the loan with interest on a quarterly basis, and it was meeting up with that obligation until it started defaulting, due to devaluation of naira, dollar scarcity, and the economic recession.

Ajayi commended the NCC’s intervention in the matter to save Etisalat from total collapse.

Though the past two years of Buhari’s administration was a mixture of pains and gains for the telecoms industry, but the pains far outweighed the gains.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Telecommunications

Truecaller Hits 43 million African Users, Releases a Business Solution

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Truecaller, a caller ID service and phone search engine, has launched an identification solution to help companies prove their legitimacy while calling customers, thus increasing safety and reducing fraud.

Truecaller helps users to see who is calling and automatically screens out spam calls and SMSes.

Truecaller Business Identity, a modern enterprise solution, allows companies to verify their identities using a green checked business badge that accurately displays the company’s profile name, photo, and logo.

“Fraud continues to be a major problem across Africa, and as a company, Truecaller wanted to provide solutions on a business as well as a personal level,” said Zakaria Hersi, Director of Business Development in Africa. “Trust is at the core of everything we do, and because we spend so much of our time on our phones, we need to make sure that our contact takes place in a secure atmosphere, which was also part of the strategy behind our harassment campaign in March this year.”

The new solution increases trust and productivity in business-to-business contact by providing customers with the assurance that the caller is a Truecaller-verified business.

A checked business on Truecaller gets a verified tick mark icon and can lock their brand name and profile picture in addition to the green Caller ID and green Verified Business badge.

Consumers would be able to tell which calls to trust as a result of this.

Importantly, users will continue to see the amount of spam marks as before, and they will have the option of labeling checked phone numbers as spam or blocking them entirely.

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Telecommunications

FG Lifts Ban on New SIM Cards’ Issuance

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The federal government yesterday reversed its policy banning the sale of new Subscriber Identification Module (SIM) cards.

The Minister of Communications and Digital Economy, Dr. Isa Pantami, in agreement with industry stakeholders, also yesterday revised the National Digital Identity Policy for SIM card registration.

According to him, the activation of new SIM card, banned in December last year, will begin in April.

Pantami directed the Nigerian Communications Commission (NCC) and National Identity Management Commission (NIMC) to ensure the provisions of the National Digital Identity Policy for SIM card registration are strictly followed by all operators and subscribers.

He said the implementation of the policy and issuance of new SIMs and other suspended activities would resume on the same date, provided that verification had been completed and the guidelines fully adhered to.

According to a statement by the Technical Assistant (Information Technology) to the Minister, Dr. Femi Adeluyi, an earlier policy was approved on February 4, 2020, while the revised policy was developed in early March 2021. The policy was further improved and endorsed for implementation by President Muhammadu Buhari on March 26, 2021.

According to the statement, the final amendments to the revised policy, based on the directives of Buhari to make the use of the National Identification Number (NIN) mandatory for all SIM registration, were completed on April 14, 2021.
The policy includes guidelines on new SIM acquisition and activation, SIM replacement, new SIM activation for corporates and Internet-of-Things/Machine-to-Machine (IoT/M2M), among others.

The statement said: “For the corporate registration, institutions will be required to appoint a telecoms master (at the minimum of an executive management level) to provide the operational primary NIN representation. The telecoms master will also be responsible to ensure that the users provide their NINs to serve as a secondary NIN.

“For IoT/M2M activations, SIM security protocols would be implemented on the SIM profile to ensure that SIMs can only be used for point-to-point data services specific to the URL they are working with. All other services will be barred.”
Pantami stated that progress had been made in the NIN registration process.

“Nonetheless, the federal government is committed to supporting all Nigerians and legal residents to obtain a NIN. The biometric verification process has been slower than anticipated, owing largely to the non-adherence of many previous SIM biometric capture processes to the NIMC standards.

“The revised policy will ensure that operators conform to the required standards for biometric capture. The guidelines in the policy have been painstakingly developed and while they are thorough, it should be noted that they have been developed that way in national interest since the SIM is essentially a national resource. Citizens and legal residents are encouraged to bear with the government as the process has been developed in the best interest of the country,” the statement added.

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E-commerce

Walmart eCommerce Sales to Grow by 21% in 2021 to $65 Billion, Nearly a Sixth of Amazon’s $367 Billion

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A massive boom in click-and-collect trends is expected to accelerate Walmart’s pandemic-driven momentum through 2021.

According to the research data analyzed and published by ComprarAcciones.comWalmart’s online sales will grow by 21.2% to $64.62 billion in 2021. Its share of US online sales will rise from 6.7% in 2020 to 7.1% in 2021.

Based on the latest NRF ranking, Walmart is the world’s biggest retailer, followed closely by Amazon. Its total sales for 2020 – both online and offline – amounted to $559 billion, more than $200 billion ahead of Amazon’s figure.

Click-and-Collect Purchases will Grow by 15% to $83 Billion in 2021

Walmart’s US online sales for 2021 will almost double eBay’s estimated $38.67 billion. They will also be higher than the combined total of $60.59 billion that Best Buy, Target and The Home Depot will generate.

However, the big box retailer will be far behind the top US online marketplace, Amazon. Amazon’s sales are projected to reach $367.19 billion, nearly six times the Walmart total. Its share of US online sales will increase from 39.8% to 40.4%. Third-party vendors on the platform will grow sales by 16.5% to $220.39 billion. That will be 60% of total sales.

Among the factors driving Walmart’s growth is its huge brick-and-mortar footprint which drives online sales via click-and-collect. It has more than 4,700 stores in the US and 90% of Americans live within a 10-mile radius of one of them.

The click-and-collect trend saw significant growth in 2020. According to an eMarketer report, US shoppers made purchases worth $72.46 billion using the method. Compared to the 2019 total of $35.02 billion, the figure marked a growth rate of 106.9% YoY. It accounted for 9.1% of all online purchases, up from 5.8% in 2020. The growth is expected to carry into 2021. Total sales are also set to rise by 15.2% to $83.47 billion.

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