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Sustaining Nigeria’s telecom growth:Ndukwe’s 8 point agenda

By Prince Osuagwu
Nigeria has achieved tremendous growth in the Telecom industry in the last decade and the need to sustain the pace of growth and development into the future, has engaged industry stakeholders from the later part of 2009 till the new year 2010.


As has been clearly noted, Information and Communications Technology (ICT) is driving the new global economy, resting the socio_economic development and sustenance of any modern nation in the shoulders of a robust telecommunications and information technology infrastructure.

Even the world today is no longer dependent on the physical strength of people in the depth of knowledge and exchange of information and ideas. And so a people without ready access to information technology infrastructure and services may not actively participate in the new world order.

Incidentally, Nigeria, today records a strong standing in the world information society due to the quantum growth telecom has ushered in the last decade.

In the past eight years of telecommunications sector liberalisation, NCC sources say subscriptions to telephone services have risen to the current level of over 74 Million active connected lines. This growth and advancement in telecommunications within the last decade has improved the nation’s ICT ranking in the world and has positively impacted all sectors of the nation’s economy. Nigeria has also become Africa’s largest telecom market.

However, this enviable growth needs to be sustained and to attain this sustenance, means that those who played active roles to what Nigerian telecommunications landscape has become today, must add their reasonable voices.
So when the Executive Vice Chairman of the Nigerian Communications Commission, NCC, Engr Ernest Ndukwe, was invited to be the Guest Lecturer at this year’s Examplary leadership roundtable on telecom revolution in Nigeria, it perhaps, provided an opportunity for him to add his own voice and tell Nigeria the way to go if success in the sector was to remain the watch word.

Ndukwe’s contribution, could as well be a parting shot for the industry he has served as the chief telecom regulator for a record ten years and is ready to leave the stage any time from April.

For him, the achievements in the industry so far can be attributed largely to the foresight by government in implementing a successful sector reform and providing the enabling and conducive environment with respect to policies and regulatory regime. “The Nigerian Government has proven its commitment to promoting a regulatory environment that is independent, fair, transparent and predictable”.

However if the growth in the sector, must be sustained, there are some critical steps to take. He captured it in eight well rounded pillars:

Maintaining stability in the policy and regulatory space.Before the licensing of the Digital Mobile Operators in 2001, private investment in the telecommunications sector in Nigeria stood at about $US50 million.  Between 2001 and now, the sector has attracted about $US18 billion in direct local and foreign investment. These high investment levels have been attained because Nigeria has become one of the most desired investment destinations for ICT in Africa not just due to the potential of the market but also due to the stable policy and regulatory regime.

The role of the policy maker must of necessity be separate from that of the regulator. The situation where the policy maker tries regulating the industry when there is a Regulatory body in place would run contrary to International best practice and creates regulatory uncertainty which investors do not like

Maintaining a stable and predictable operating environment is essential for attracting investment and avoiding actions that can constitute a disincentive for investment or challenge the sustainability of returns on investment capital. The telecoms sector is very capital intensive and therefore, to continue network expansion, improve quality of service and increase coverage in Nigeria, emphasis must be on ensuring an attractive operating environment.
Maintaining  independence of the regulatory institution operationally and financially

The Regulator, in an open liberalized market draws its relevance from the widely accepted role of the State as a motivator and impartial umpire. This role is typically very demanding and encompasses far-reaching and multi-disciplinary issues. To be successful, the function should be based upon a well defined set of objectives.

These objectives must cover virtually every aspect of telecommunications network and service provision including tariff, technical standards, allocation of scarce resources, fair competition, and the regulation and mediation of inter_operator issues such as interconnectivity and interconnect termination rates.  Indeed, a good regulatory environment can contribute to attracting investment by providing stable, transparent and non_discriminatory access to telecommunications resources.

The concept of having an independent Regulator for a nation’s telecommunications industry only got worldwide acceptance in the last decade of the 20th century following the global and rapid privatization of several state owned monopolies and the liberalization of the telecommunications sector in several countries.  By continuing to maintain sensible, transparent and investor-friendly legal and regulatory framework, serious investors would be encouraged to continue to participate in the nation’s telecommunications market.

For sectoral liberalization to achieve the desired goal of Government and to meet the needs of the populace, the regulatory oversight function must be carried out through a truly independent Regulator, properly empowered to effectively carry out its assignment. Experience has shown that the independence of the Regulatory body is essential to the successful performance of its role in the sector.

Regulators need to be isolated from political or administrative pressures to be able to regulate the market fairly and earn the confidence of investors, consumers and stakeholders. Also, without adequate funding a Regulatory body will not be effective.  In an environment characterized by operators with deep pockets, the Regulator must be operationally and financially independent of network operators and service providers and must never depend on such entities for favours or handouts.

Efficient management of national resources A key role of the Regulatory body is to see to the optimal use and equitable allocation of scarce resources such as the frequency spectrum, numbers and rights of way. To sustain the gains of the revolution, spectrum policy must include timely sale of available frequencies to support new technologies.

In the very near future some frequencies will be freed up as a result of the impending digital switchover from analogue to digital television commonly referred to as digital dividend spectrum. Because of the favourable propagation characteristics of this band, I will recommend that a good proportion of this band is reserved for mobile broadband. Nigeria will benefit tremendously from this because the future broadband growth and development in Nigeria depends on wireless platform.

Emphasis on growing broadband infrastructure and catalysing adoption and usage. There is already a growing broadband divide between Africa and the rest of the world with Nigeria recording proportionately low internet and broadband penetration nationwide.  Both fixed and mobile broadband networks are necessary to deliver modern information and communications services that require high rates of data transmission.

There is therefore an urgent need to continue to promote faster deployment of broadband in Nigeria. The State Accelerated Broadband Initiative, SABI, program is NCC’s response to this requirement and is designed to encourage, provide incentives for the operating companies to deploy broadband infrastructure and provide the service to the public at subsidized rates in all state capitals, major commercial cities and subsequently all over the country including the rural areas. This must be sustained.

Continue the emphasis on the expansion of fibre optic cable transmission infrastructure nationally and internationally

Rapid roll out of network resources such as base station and switches  nationwide have been enhanced by the expansion of the nation’s optic fibre infrastructure by the major operating companies involved in long distance  transmission services under the Wire Nigeria (WiN) program.

The WiN program was conceptualized to ensure that all the States of Nigeria are linked to the national fibre_optic backbone infrastructure.  Therefore, the Commission in collaboration with the operating companies must continue to offer incentives that will encourage further expansion of the backbone transmission infrastructure to reach all parts of the country.  Since 2003 over 20,000km of new optic fiber cables have been installed. This has greatly increased the long distance transmission capacity available to support the fast network growth.

Manpower development for the sector The number of skilled manpower required for the telecom industry in Nigeria since year 2001 has been enormous. The Commission demonstrated commitment to ensuring that the shortage of skilled people to run the fast expanding telecom industry in the country was remedied.

The Digital Bridge Institute (DBI) in Abuja, was established by the NCC as an international Centre for Advanced Communications studies.  Its primary aim is to ensure that some of the technical manpower requirements for the ICT industry are met with adequately trained and skilled personnel that can be easily absorbed into the fast growing ICT market in Nigeria.  The DBI must continue to enjoy the patronage of the NCC and the industry to continue to carry out training to meet the diverse manpower requirement of the sector.

International Reputation
The NCC is widely acknowledged as a model telecommunications regulatory institution in Africa and in the past few years, has played host to various representatives from African telecommunications regulatory authorities on study tours.  It is important to continue to partner with the ITU and other development agencies in furthering the exchange of experience and expertise necessary for global best practices regulation in the region.

NCC facilitated the establishment of the West African Telecommunications Assembly (WATRA) which it has continued to nurture and support, and is also very active within the African Telecom Union (ATU) and the ITU.  With its current growth pattern and its position in Africa, Nigeria through the NCC, should remain committed to facilitating the growth of the Nigeria’s telecommunications sector, and taking its leadership position in telecommunications development in Africa.

Imperative of improving corporate Governance in the industry
It has been observed recently that some operating companies are beginning to show signs of distress. This has been traced in some cases to poor corporate governance principles. Business decisions and Management style that are employed in an economic crisis will be crucial to the survival of the enterprise.

As the ultimate responsibility and direction for an organisation lies with top Management, it is critical for the companies that are showing signs of distress to impose strict culture of operational risk assessment, and monitor the ethical behaviour in their organizations across the board.  Inward looking companies should also try using benchmarks as they provide insights into the performance secrets of successful competing companies, and their  business practices and processes that have helped them attain success.  Poor corporate governance structures and processes were identified as key causes of the current global crisis .

Issues of corporate
governance, as they relate to assessment of risk, executive remuneration, strategic corporate direction, transparency and others, will need to be resolved effectively if organizations are to overcome the crisis and prevent collapse.  We can ill afford the collapse of any major operating company.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.