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COVID-19: Telcos still losing money despite strong outlook – Adebayo

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Gbenga Adebayo, Telcos
Gbenga Adebayo

By Prince Osuagwu, Hi-Tech Editor

Engr Gbenga Adebayo, is the Chairman Association of Licensed Telecom Operators in Nigeria, ALTON; the umbrella body of all the telecommunications service providers.

In many instances, Adebayo’s leadership style and diplomatic approach to the relationship between the regulator and the telecom operators in Nigeria have been hailed as why the sector remained strong even in the face of Coronavirus, COVID-19 pandemic.

However, Adebayo said the strength of the sector is in looking far ahead and preparing early enough for the rainy day. He argued that it should be a virtue deserving of the country’s encouragement and not burdened with taxations and other growth retarding measures

Many sectors are grappling with the unforeseen effects of COVID-19 pandemic, yet the telecom sector appears to be strong for it. How come?

We had seen the trend across the world in January and February and we began preparations for a possible outbreak and subsequent lockdown by the government in the event of an outbreak in Nigeria. Our members were advised to provide adequate headroom to accommodate more traffic and as well build redundancies for network resilience. Network remote monitoring and maintenance were also emphasized, as well as co-sharing of common infrastructure in order to guarantee network availability with adequate capacity to support any sudden surge in traffic.

As we were approaching the lockdown days in March, we made a request for right-of-passage for telecom workers as essential service workers through our regulator the NCC to all the heads of various security agencies and with the support of our Regulator, the NCC and Minister of Communication and Digital Economy we got all the necessary right of movement during the lockdown. All these helped our response to support the subscribers and the economy during the critical days of total lockdown and up until now.

It appears the impact of COVID-19 is uneven across sectors. Which sector do you think has been most affected?

Every sector of the economy is affected in one way or the other, the pandemic and associated lockdown have shown the interconnectedness of our world and the economy. One would think that the Small and Medium Enterprises (SMEs) are mostly affected, followed by the educational sector, travels and tourism, hospitality and entertainment, quite a number of telecom players and their support companies were also affected and greatly impacted by this pandemic.

Considering that businesses were closed due to the lockdown, mainstream income for Network Operators, like Voice, has also dropped significantly thus affecting their revenue. Whilst we had a lot of virtual and online activities, which were mainly the use of over the top (OTT) services, operators experienced a significant decline in revenue from large corporations.

What about finding solution to thrive, post COVID?

There are concerns about the days ahead and we do not know how various sectors will fair, including telecoms. We need to wait and see. COVID -19 has become the new normal, but more worrisome is the fact that the effects of the post-COVID lockdown may be higher than the lockdown itself, so we need to brace up for the days ahead in the new normal.

But some are beginning to say that telecom is a beneficiary of COVID-19. How correct is the narrative?

We need to be careful about this narrative. Again, and for emphasis, it is incorrect to use the result of some operators to determine the overall health of the industry.

Several players in the sector are struggling like many other sectors of the economy.They are significantly affected by the pandemic. Prior to the lockdown and up until now, we have issues of interconnect debt between operators, which speaks to the state of health of many operators.

READ ALSO: COVID-19: Telcos can help rebuild Nigeria – ABI Research

Considering that businesses were closed due to the lockdown, and a few services were affected, fewer mobile calls were recorded. Usage was mostly OTT services; operators had seen a reduction in the revenue from corporate services and with a significant decline in voice traffic.

If you look at the overall Nigerian economy, do you see a way out of the ravages of this pandemic?

Systems and economies were not designed for a holding time as we had during the lockdown and the impact of the lockdown will be felt for some time to come. A number of companies will not be able to meet their targets for this year; the loss of one quarter of the year will certainly affect the ability of many companies to survive the rest of the year and even after. We are already hearing of companies placing staff on redundancy, reduction in salaries and general inability to fulfill obligations. A number of projects and contracts will have to reset, and restart and parties need to find the best way of collective survival.

However, there is light at the end of the tunnel as they say, a problem known is a problem solved. So, with the awareness of the impact of this pandemic, I think companies will have to make the necessary adjustments.

Regulators will need to consider policy interventions that will help businesses survive. In our sector, for instance, we would canvass for review of certain obligatory fees, import duty concession on network elements, access to foreign exchange as may be required, and waiver in a few areas. So, we can continue to survive and support the economy as businesses navigate these difficult times.

Telecom services are central to how Nigerians will survive this period. Are your members tweaking their operations to accommodate this assignment?

As you may be aware there is already a presidential pronouncement on the protection of telecom infrastructure and we are very pleased as this will go a long way in preventing disruption to the network, we are also building capacities in line with the national broadband plans and the issue of high right of way charges by state government is becoming a thing of the past, we are ensuring injection of additional capacity at all times in order to be able to cope with consumer demands.

Every member of ALTON has made significant contributions in support of Government, and some running into several millions of naira both in equipment and aid: some of us are also members of Committee Against COVID (CACOVID.

VANGUARD

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