This will encourage increased investments that will expand broadband services and drive economic growth and development, the regulator said.
Speaking at the 21st anniversary of the Association of Telecommunications Companies of Nigeria (ATCON) in Lagos at the weekend, acting executive vice chairman of NCC, Prof Umar Danbatta, said the regulator is focused on providing a level playing field for all telecom companies and investors to maximise their investments.
Danbatta, who was represented by the director, Public Affairs of the Commission, Mr. Tony Ojobo said: “Between now and next year, NCC will come up with programmes to license more spectrums. This will ensure that we have enough pervasive internet penetration.”
According to him, NCC will continue to implement policies that guarantee a good operating environment for telecom players.
Nigeria has an array of telecom licences awaiting auctions from next year, such as the 2.6GHz band, Infrastructure companies (InfraCos) in the five geopolitical zones of the country, 5.4GHz band, 70/80GHz band as well as the 700/800MHz bands that NCC plans to offer telecom/broadband operators.
Speaking on Friday at the 2015 Nigeria Telecom Impact CEO Forum in Lagos with the theme: ‘How Telecoms Can Contribute 25 per cent to the GDP by 2025’, he said it is possible for the telecom sector to achieve that with the implementation of proactive policies.
Danbatta said a sector of the economy that projects to contribute 25 per cent to the nation’s GDP invariably presents a blank cheque for rewarding economic activities, innovations, huge returns on investment, provision of huge employment opportunities, promotion of welfare to the citizens and provision of huge support to governance.
Consequently, the NCC boss noted that as a regulator that has been able to supervise the industry that led to the attainment of 10 per cent contribution to GDP, “we shall continue to provide the enabling environment to attain the prediction of 25 percent by 2025.”
To achieve the target, he disclosed that the NCC is currently engaging the Nigeria Governors’ Forum (NGF) with a view to removing the barriers to infrastructure deployment such as fibre-optic cables, base transceiver stations (BTS) and others from their states.
“Tax friendly policies should be encouraged and Right of Way (RoW) needs to be addressed,” he said. “It is our wish that this dream of 25 per cent contribution to the nation’s GDP comes through as a reality. “Our commitment to this dream is to continue to oversee the industry with innovative and robust regulatory processes, spiced with transparency, fairness and openness, providing choice for the Nigerian consumers and businesses, trusted by investors across the globe and respected by the international community.”
Sokoto State Governor Aminu Tambuwal, who was special guest at the ATCON 21st anniversary, urged the telecom companies to come to Sokoto State and invest.
“What we are doing in Sokoto State is to get the framework right because there was no framework on ground for ICT development when we came in.
“We are working to bring Sokoto State up to speed in ICT. We will work with ATCON in this regard. Please come and work with me in Sokoto and partner to make Sokoto an ICT- driven state,” he said, adding that during his time at the House of Representatives, he worked closely with NCC to make laws that will improve the telecom sector.
Nigeria’s mobile subscriber base is expected to surpass 182 million by 2019, up from around 152 million active connections in August 201. The world is awaiting Nigeria to unleash the requisite spectrum licences that would herald a full broadband space for citizens, corporations and government agencies to create a digital and interconnected economy.
Severin Luebke, analyst at Pyramid Research, said: “Other countries in Africa are likely to follow Nigeria when it comes to mobile technology development. The increasing demand for mobile data will offer service providers, as well as new entrants to the market, ample opportunity to test and grow their service offerings in Nigeria.”
Pyramid Research believes that Nigeria will remain the biggest market for mobile subscriptions on the African continent. As the largest economy on the continent, it will also play an important role in defining future mobile trends.
NCC, telcos target $160bn investment inflows
The Nigerian Communications Commission (NCC) and telecommunication companies operating in the country have set a target of attracting about $160 billion worth of investment inflows into the telecommunications industry over the next 10 years to provide full broadband services at mobile, fixed, fixed wireless and Internet data levels and midwife millions of digital content companies.
The big and small telecom operators, who are looking at local and foreign direct investments through equipment financing, debts and share capital to expand their operations, said they are geared up for a new revolution in broadband services that will usher in unprecedented digital services as they await the release of new telecom spectrum licences in the next two years.
In addition to planned mergers and acquisitions (M&A), the big four GSM operators – MTN, Globacom, Airtel and Etisalat – have started making projections in the value of $4.5 billion for their operations in Nigeria in the 2016 financial year to deepen their networks and ensure resilient quality of service (QoS) and sound quality of experience (QoE) for their customers in order to escape the hammer of the regulator, NCC.
They also said as the NCC prepares to renew their Global System for Mobile Communications (GSM) licence by February 2016 for another 10 years, the telecom landscape in Nigeria should expect new investments to expand network capacity, solidify penetration and provide myriads of digital financial services in the future.
NCC executive vice chairman, Professor Umaru Danbatta, who was represented by NCC executive commissioner, Technical Services, Engr. Ubale Maska, disclosed at the recently-concluded International Telecommunication Union (ITU) Telecom World 2015 held in Hungary that there is a huge investment gap in the ICT sector which Nigeria needs to urgently fill in order to bridge the extant digital divide in the country.
“Despite all the growth we have seen, the Nigerian ICT industry is still in need of a lot of investment,” Danbatta said. “The mobile operators we have on ground now, with the major ones being MTN, Airtel, Glo and Etisalat and the licensed collocations service providers currently have over 30,000 base stations, but as far back as 2012, the estimated requirement is a minimum of 70,000 base stations.”
Danbatta said the NCC had put in place strategies to attract the much needed investments into the Nigerian telecom space with successful ongoing talks between the regulator and telecom operators in the industry to create a level playing field to attract new investments as well as foreign participation in Nigeria’s telecom industry for other global players and investors.
To kick-start the investment inflows, two major announcements will be made this week by two telecom companies that will show direction for the future of Nigeria’s telecom industry.
NATCOM, the consortium that acquired the assets of Nigerian Telecommunications Limited (NITEL), will officially re-launch SAT3 international submarine fibre-optic cable infrastructure to provide unhindered broadband capacity into the hinterlands.
NATCOM has spent millions of dollars rehabilitating SAT3 cable system to increase Internet bandwidth available to Nigeria. The cable has been down for over two years due to cuts in its cable routes in the Atlantic Ocean, thus denying Nigerians access to the first sub-sea international fibre-optic cable which brought broadband internet to the shores of the country.
NATCOM will also announce a roadmap that will lead to investments of more than $1.1 billion in the medium term for the roll-out of a full mobile broadband Fourth Generation Voice Long Term Evolution (4G VoLTE) technology mobile network and fixed line network, among others, to ensure Nigeria has 168 million broadband subscribers by 2019.
Mr. Kamar Abass, managing director of NATCOM, said: “We are focusing on the three largest cities, starting with Lagos, Abuja and Port Harcourt. We will start services within the first half of Q4 in 2015. We have a priority on deep coverage and then we move on to broad coverage.”
Abass said NATCOM had come to fill the gap of bringing Nigerians unfettered access to full mobile broadband both on voice and data services.
According to him, “Over the next four and half years, the total number of mobile broadband customers alone will be greater than all the customers that have come into the market on mobile telephony since its inception.
“In other words, we are at a point where a major transformation is in the making. You will see 168 million mobile broadband customers coming into being between now and the end of 2019, which is more than all the mobile customers (both narrow and broadband) that we have seen in the last 15 years.”
Another firm, Smile Communications Nigeria Ltd, is also set to take its 4G licence a notch further by activating its mobile 4G LTE broadband network in the 800MHz band in Nigeria, having raised $365 million for its operations in Nigeria and two other countries. Smile Nigeria plans to roll out 4G LTE voice telephony service by the end of 2015.
Chairman of Smile Communications Nigeria Ltd, Dr. Ernest Azudialu- Obiejesi, said the funding is an enabler of Smile’s quest to deepen broadband penetration in Africa, especially in key markets of Nigeria, Tanzania, Uganda and DRC.
“Nigeria is one of the most dynamic markets in the world and mobile broadband will continue to play a crucial role in the transformation and development of the country,” he said.
“Smile 4G LTE broadband Internet in Nigeria represents a considerable investment and reflects Smile’s confidence in, and commitment to, the country’s development.”
The funding is one of the largest capital raises ever for a telecom operator in Africa and brings the total funding committed by Smile since its founding in 2007 to approximately $600 million.
President and CEO of Ceragon Networks Ltd, Mr. Ira Palti, who was in Nigeria recently to commission a full-fledged broadband investment hub ahead of the broadband revolution, said: “We have equipment to double that which gives the customer about 200 per cent high capacity and can effectively use the spectrum to provide data to the excess towers, backbone, carriers, ISPS, government and wherever you need the data.”
Currently, Nigeria has about 151 million active voice subscribers with less than 20 per cent broadband penetration. More than 90 per cent of the bandwidth capacity Main One, Glo 1, SAT-3 and West African Cable System (WACS) cables are still untapped due to right of way (RoW) issues, multiple taxation, etc.
Nigeria’s telecom sector has attracted over $37 billion investments since the liberalisation of the telecom sector 15 years ago.
FG To MTN: You must pay N1.05trn fine
The federal government has urged MTN Group and its Nigerian subsidiary, MTN Nigeria, to pay the N1.04 trillion ($5.2 billion) fine imposed on it by the Nigerian Communications Commission (NCC) for failing to deactivate 5.2 million improperly registered subscriber identification module (SIM) cards.
Discussions between MTN Group’s management led by Mr. Sifiso Dabengwa, its group CEO/president and Nigerian vice president, Prof Yemi Osibanjo, revealed that plans by Africa’s leading mobile operator to secure a waiver on the fine failed. Instead, the federal government may be amenable for a staggering of the payment of the fine by MTN Nigeria.
MTN Nigeria angered the Nigerian telecommunications regulator by insisting on a deactivation of 5.2 million improperly registered SIM cards on its network. A presidency source confirmed yesterday that this was part of the agreement reached at the series of meeting held on Thursday and Friday in Nigeria.
The source said, “There have been series of meeting at the Presidency between Vice President Osinbajo and MTN team, both from South Africa and the Nigerian arm. The telecommunications firm wanted a waiver considering their level of investments in the country, but government did not buy the idea of waiver. Instead, I think there will be concession, but certainly not a waiver.
“At the conclusion of the meeting, the MTN people negotiated on how to stagger the payment. The Presidency is even angry because MTN was a signatory to the regulation, but it failed to comply with rules.”
NCC document revealed that MTN Nigeria had committed 28 separate infractions, forcing it to wield the big stick to beat MTN into line.
Meanwhile, some top officials of MTN are under investigation by the Johannesburg Stock Exchange (JSE), South Africa, for insider trading following the high volume of shares traded last Monday on MTN’s stock some hours before the announcement by MTN of its $5.2 billion fine in Nigeria.
The JSE regulator wants to find out if any insider trading took place that may have led to some profit takers disposing their shares before the fine announcement.
Andre Visser, general manager, Issuer Regulation at the JSE, said the JSE “is in conversation with the sponsors in the interest of MTN shareholders.”
Also on Friday, MTN issued an update to shareholders and cautionary announcement saying its “Group CEO is engaging with the Nigerian authorities on the regulatory aspects of this matter. In addition senior management of the company and its advisors are currently engaging with the JSE Ltd on the timing of the aforementioned SENS announcement.”
“The company will update shareholders through SENS on these engagements as soon as possible. Shareholders are therefore advised to exercise caution when dealing in the company’s securities until a further announcement is made.”
MTN’s share price tanked about 20 per cent early last week, reducing its market capitalisation by R68bn. On Friday, its share rallied back by about 1.12 per cent.
Meanwhile, credit rating agencies Fitch and Moody’s have lowered MTN’s credit rating outlook to “negative” from “stable,” citing the regulatory fine.
Standard & Poor’s has also lowered the group to “BBB-” from “BBB” and placed it on credit watch with negative implications.
Nigeria is MTN’s largest market with 62.5 million subscribers. -Leadership