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Multiple Taxes, RoW, Others Stagnate N21.45tn Telecom Investment

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  • Multiple Taxes, RoW, Others Stagnate N21.45tn Telecom Investment

Telecom stakeholders are expressing fears that the government’s policies will not only scare away potential investors, but can make the industry to crumble, OZIOMA UBABUKOH writes

Investment inflow into the Nigerian telecommunications industry is witnessing a lull without appreciable Foreign Direct Investment since the industry hit the N21.45tn ($70bn) investment mark last year, according to investigations.

The development is coming following the various challenges confronting the industry, which are becoming intractable for the telecom umpire, the Nigerian Communications Commission.

The challenges stifling the FDI and local investment inflows into the industry include multiple taxes, multiple regulations and Right of Way problems.

According to the President, Association of Telecommunication Companies of Nigeria, Mr Olusola Teniola, mobile operators currently pay on the aggregate 23 different taxes to various agencies of government at the federal, state and local levels.

“The challenges are also going to conspire against the six infrastructure companies already licensed by the NCC to deepen broadband penetration, because they won’t be insulated from the challenges facing existing operators in the industry,” he said on Sunday.

This also explains why the plan by the NCC to hit the 30 per cent broadband penetration by end of this year remains dicey, according to industry watchers

The industry has only been able to reach 22 per cent broadband penetration till date, though far above the minimum threshold of 20 per cent set for countries around the world to be met by 2018 by the Broadband Commission of the International Telecommunications Union.

The Director, Legal and Regulator Services Department, NCC, Mrs Yetunde Akinloye, bemoaned the various threats affecting the industry’s growth, especially the issue of multiple taxes and regulation.

According to her, after approval is given by the state authorities to telecom companies to build their infrastructure, operators still face challenges of having to deal with the payment of all kinds of frivolous levies imposed by local authorities and the so-called ‘area boys’.

“Refusal to do their bidding means the operators won’t be given the permission to peacefully lay out their infrastructure,” she said, noting that despite this, “demand for telecom services continues to grow in the face of infrastructure that is not growing.”

Akinloye said, “Government authorities and different agencies impose these levies in order to boost their revenues and we have met with the Nigerian Governors’ Forum to educate them on the implication of not allowing operators to build infrastructure in their states.

“This is because they are asking them to pay all sorts of taxes and levies, majority of which are not backed by any law in the country.”

The RoW is another problem facing the operators and which is putting pressure on their readiness to roll out more infrastructure, according to findings.

Right of Way is the permit given to a mobile network operator to lay fibre optic cables along the road and to build base stations in order to improve service delivery.

On this, findings showed that operators had not been able to make appreciable mileage in the area of more fibre optic deployment and base station roll-out

Information obtained from the Association of Telecommunications Companies of Nigeria showed that most state governments were denying the operators access to build additional base stations, while the already built ones were being shut down indiscriminately.

In Abuja, for instance, as in many states, findings showed that most operators had not been allowed to build additional base stations in the last five years, whereas building additional base stations is a sine qua non for improved service delivery across networks.

The PUNCH recalls that the Executive Vice Chairman of the NCC, Prof. Umar Danbatta, had in the last one year visited some state governments and pleaded for the RoW to enable the telcos to build base stations as well as reopen shut stations.

However, few months after, some of the state governments have gone back to either shutting the already existing base stations or denying the telcos access to build more.

Danbatta stated, “This singular action of not granting Right of Way will not only keep stagnating telecom investment, it will also not help in deepening broadband penetration.

“We need to engender a more robust conducive regulatory environment that attracts foreign investors into the country’s current $70bn (N21.45tn) telecom industry, release more spectrum to drive wireless Internet communication, license more players in the broadband infrastructure space and work with stakeholders to ensure that the challenges facing operators are obliterated.”

Teniola also called on the government to remove obstacles facing telecom operators in the course of deploying Internet infrastructure.

Teniola said, “We need increased support for telecom companies and other players in the entire Information and Communications Technology spectrum so that they can roll out infrastructure that can help us deepen Internet accessibility and availability faster.

“Aside from the 23 different taxes and levies that telecom companies currently pay, they are also faced with the perennial cases of vandalism, indiscriminate closure of their Internet infrastructure, denial of Right of Way as well as lack of direct access to foreign exchange.”

Industry analysts say the National Broadband Plan 2013-2018, being implemented by the Federal Government through the telecom regulator, is further helping in deepening broadband penetration.

According to data from the NCC, broadband penetration increased from six per cent in 2013 to 21 per cent in 2016 and with a target to reach 30 per cent penetration by end of this year.

“We have to create a veritable platform for aggressively increasing access to true broadband services, whose availability has greater impact on the nation’s economy,” the Chief Executive Officer, MainOne Cables, Ms Funke Opeke, said.

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 market.

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FG Implores Parastatals to Promote the Country’s Digital Economy Initiative

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FG Tells MDAs to Promote the Country’s Digital Economy

The Ministry of Communications and Digital Economy under the management of Dr. Isa Pantami, has implored all the federal government parastatals to promote and safeguard the country’s digital economy initiative.

Dr. Isa Pantami, while presenting the keynote address in a virtual forum organised by the Association of Telecoms Companies of Nigeria (ATCON),  said based on the negative effects of COVID-19 pandemic, the demand for critical data infrastructure and broadband is now high.

The minister urged government parastatals to put in effort to uphold and promote government’s digital economy initiative designed to reduce the effect of the pandemic on the nation. He also disclosed that the interests of all Nigerians would also be protected by the government.

Federal government will continue to develop its digital economy policy for a digital Nigeria. Both the Nigerian Communications Commission (NCC) and the National Information Technology Development Agency (NITDA) that are under the supervision of my ministry, now have special departments that promotes digital economy initiative and I urge them and all other parastatals under my supervision, to ensure that they promote the digital economy initiative of the federal government in order to maintain investor’s confidence and to protect the interest of Nigerians, especially telecoms consumers.

Government on its part will ensure that the interests of telecoms companies and the interest of Nigerians are protected. Government is currently addressing the challenges in the cost of investments such as the issue of vandalisation of telecoms infrastructure, and President Muhammadu Buhari has officially directed all security institutes, through the Office of the National Security Adviser (ONSA), to protect telecoms investments in the country,” Pantami said.

The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, when making his presentation said “The COVID-19 pandemic rapidly and sharply ravaged the globe, Nigeria is no exception. Governments therefore, faced unprecedented challenges from COVID-19 pandemic. The impact affects most sectors of the global economy, ranging from health, to education, to finance, to trade and investment.

While explaining the Commission’s efforts at resolving consumer-related issues, Danbatta noted that less than 500,000 people activated Do-Not-Disturb (DND) code as at 2015 when the code was introduced by the Commission but presently, over 22,722,366 people line on the code.

He also made it known that the commission has resolved 98 per cent of service-related complaints received from telecoms consumers from January 2019 to April 2020.

according to Danbatta “the Commission has monthly engagements with operators as well as quarterly industry working group on Quality of Service and Short Codes, and is currently monitoring 2G Key Performance Indicators, while the KPIs for 4G are being prepared.

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Mambilla Power Project: FG Spends N1.2bn on Survey, Sensitisation 

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FG Releases N1.2bn for 3,050MW Mambilla Hydroelectric Power Project

The Federal Government has released a total sum of N1.2 billion to the Taraba State Government for the 3,050 megawatts Mambilla Hydroelectric Power Project to finally take-off.

Investigations have revealed that the funds were released for the sensitisation of host communities around the site where the plant is to be constructed and survey works.

The N2 trillion power project is to be located in Sardauna Local Government Area of Taraba State after four decades of on and off planning.

Checks revealed that Sale Mamman, the Minister of Power, visited Taraba State last week, where he met with Darius Ishaku, the State Governor, and discussed the final take-off of the 3,050MW project, among other things.

Mamman on Wednesday had tweeted some of the highlights of his Wednesday visit, saying the Federal Government and Taraba State Government discussed how to speed up the project.

He said, “I paid a visit to the Taraba State Government House where I met with the governor and brother.

“We held discussions centered on how to speed up the final take-off of the Mambilla Hydroelectric Power Project and other power issues affecting the state.

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FBN Holdings Boost First Bank CAR With N25 Billion Capital Injection

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First Bank Boosts CAR With N25 Billion Capital Injection

FBN Holdings Plc announced it has boosted the Capital Adequacy Ratio (CAR) of its commercial banking subsidiary, First Bank of Nigeria Limited by N25 billion.

According to the statement released by the bank on the Nigerian Stock Exchange website, the capital injection represents part of the net proceeds of the company’s divestment from FBN Insurance Limited.

It noted that the capital injection upped the bank’s Capital Adequacy Ratio to 16.53 percent –before capitalising year to date profit– as at June 2020.

Oyewale Ariyibi, the Chief Financial Officer of the Company, was quoted as saying “the divestment is in line with the Group’s medium to long term strategic objectives. The divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core banking business for which the Group is renowned“.

Ariyibi further stated that the Company’s objective is to increase capital across the Group in order to drive business growth, enhance efficiency and improve overall shareholders’ value.

Uk Eke, the Group Managing Director, who commented on the company’s performance for the first half of 2020 said “The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the results demonstrate our capacity to deliver exceptional services to our customers in these uncertain times. Looking ahead, we remain cautious, but confident that our business is fundamentally strong to surmount any future challenge towards delivering superior financial performance“.

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