Monday, September 20, 2010

Consumers set to gain from telcos’ tariff war

. . . Cost of voice calls drops by 50 percent
Ben Uzor Jr

Telecommunications consumers in the country are in for a good time as tariff wars amongst operators in Nigeria’s highly competitive market continue to favour them. In the past three months, innovative promotional schemes from telecoms companies (telcos) have reduced prices of mobile phone talk-time by 50 percent, as telcos attempt to woo new subscribers onto their networks.

In August, MTN Nigeria floated a new set of value added proposition which featured product offerings that allow customers enjoy more call times at highly reduced cost across its market segments, causing an increased competition among telecom players. For instance, customers on MTN Smartlink will enjoy retrogressive tariff plan, which allows the customers to pay less for more time spent calling. Voice calls price can fall to as low as 25 kobo/second from a peak 50 kobo, a whopping reduction of 50 percent.

In swift reaction to the earlier strategic move by MTN, which enticed teeming subscribers to its network with its new tariff plan (MTN Funlink, Smartlink, Prolink, Bizlink and Happilink), fifth licensed GSM operator, Etisalat Nigeria introduced a new tariff plan that allows subscribers enjoy lower rates of 25 kobo per second for voice calls from a peak of 50 kobo per second. The unique selling point of the value proposition is that subscribers could make calls to anyone regardless of time, network or even location.

Similarly, Zain Nigeria had introduced a new plan in July that offers telecoms users in Nigeria more value while empowering them to communicate at affordable rates. The prepaid tariff proposition offers Nigerian customers the opportunity to make Zain to Zain calls at a reduced rate of 45 kobo per second, plus 20 free SMS every month, 50 per cent discount on calls to 10 family and friends’ numbers and over five hours of free Zain to Zain calls as a three months’ promotional offer.

Besides, the Code Division Multiple Access (CDMA) operators are not left out of the on-going tariff war as Starcomms Plc also slashed its international call rate in July. The new call rate, according to the company, is as low as N12 per minute and applicable to calls to the United States of America, Canada, United Kingdom, China and India. It further revealed that the countries covered by the new rate top international business and leisure destinations, as a result, the new comparatively low rate will enable Starcomms customers to be in touch with their business partners and loved ones in those countries.

At the weekend, national operator, Globacom launched a new package in Port Harcourt that enables telecoms subscribers pay 25 kobo per second for all calls to any network in the country without any rental or access fee. In addition, the package, ‘Glo Infinito’ offers free midnight calls from 12 midnight to 5a.m as well as a bonus of between 10 percent and 20 percent for every recharge with N500 and above.

Industry watchers say that telcos will continue to engage in tariff war to enable them invite new subscribers and wrestling existing ones from competing networks. According to them, tariff wars will enable telcos garner more market share, enjoy better economies of scale through reduced cost per unit of delivering services as volume increases. “This is the first time this is been done in Nigeria. This half-call rate tariff package offers subscribers the benefits of doubling their call time whenever they load credit on their phone”, Steve Evans, chief executive officer, Etisalat Nigeria told newsmen at the weekend.

“It is in line with our commitment at inception to get Nigerians talking because we know that everything in life, business or social, political or religious, requires communication. We know that when people talk, understanding increases, friendship develops, ideas are generated, dreams are born and life advances.”
Yemi Adepetun, an Etisalat user who spoke to Business Day yesterday, said: “When I heard about the promotion I immediately subscribed to it and it has helped me reduce my call cost by half. Well, Etisalat is known globally for their innovation and creativity; I do not expect anything less. ”

Moreover, Ernest Ndukwe, past, executive vice chairman, Nigerian Communications Commission (NCC) told a gathering of Information Communication Technology (ICT) stakeholders that the commission had laid the foundation for tariff reduction with the issuance of a new interconnect regime in December 2009. Interconnection rate represents the rate which a telecommunications operator who originates a call pays to another operator on whose network a call is terminated.

“I have continued to see tariffs continue to drop since the last exercise with the respect to interconnect rates. Going forward, prices will continue to fall because we have always insisted that more competition will affect tariffs in a positive way. I heard that Etisalat Nigeria now offers 25 kobo per second for voice calls to any network. I know the NCC will work tirelessly to ensure that tariffs continue to drop in the country”, Ndukwe posited.

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Tuesday, September 14, 2010

Ndukwe tasks Jonathan on sustained NCC autonomy

Ben Uzor Jr

If Nigeria intends to sustain the impressive growth recorded in the telecommunications industry beyond 2010, the Goodluck Jonathan administration must protect the independence of the Nigerian Communications Commission (NCC), Ernest Ndukwe, past, executive vice chairman, NCC has revealed. This warning is coming in the wake of alleged political interference in the agency’s affairs.

He further observed that the huge telecom growth did not come because the country suddenly became the preferred investment haven or on account of its huge population, but mainly due to stable regulatory and policy environment that existed in the last 10 years. Ndukwe spoke on Friday at an event to honour him for his meritorious service to the country as Nigeria’s telecom regulatory chief, which ended in April organised by the Association of Telecommunications Companies of Nigeria (ATCON).

Under the Olusegun Obasanjo administration, Ndukwe was hired in 2000 to head the NCC and was provided the needed independence to stir the affairs of the commission, he said. Whilst paying kudos to the former president for granting autonomy to NCC, he underscored that the nation’s highest political leadership is always crucial to the success of the telecoms regulator to effectively perform its roles.

“Quite honestly, I say it in international forums where I go to deliver speeches on regulatory issues that without the support of government at the highest level, it is always difficult for a regulatory to perform well. During the tenure of president Obasanjo, he gave us free-hand to operate. That sowed the seed for the subsequent regimes that followed. Even the first minister of communication, Mohammed Arzika was trying to get involved in the telecom regulatory issues. The president called him and told him to leave the NCC alone. That is very critical for the development of the industry”, he explained.

To sustain this growth, he urged the current administration to ensure the operational and financial autonomy of the telecoms regulator to ensure that the dividends are sustained by the new leadership of the NCC. Moreover, the ceremony also had in attendance the new executive vice chairman, NCC, Eugene Juwah, industry associations, operators and major players in the Nigerian ICT ecosystem.

Stressing the significance of guaranteeing a conducive operating environment for telecoms companies, the former NCC boss pointed advised Juwah to avoid actions that might constitute disincentive to investment or even challenge the sustainability of return on investment capital.

In the same vein, Gbenga Adebayo, chairman, Association of Licensed Telecommunications Companies of Nigeria (ALTON) condemned the increasing interference in the affairs of NCC, further asserting that it could undermine development of the sector. Adebayo also expressed concern over multiple regulations of telecoms in Nigeria, a development he charged the new leadership of NCC to urgently address.

According to him, the telecoms industry has come under attacks from some agencies of government over the issue while bringing the attention of NCC to the issue that, “more of enemies within than without.“EVC, you must exert your authority as industry regulator from interlopers” to continue to see growth and development in the telecoms market in Nigeria.

On his part, as part of his recipe for fuelling telecoms growth in Nigeria, Ndukwe urged policy makers refocus the growth of telecoms into rural and underserved parts of the country to grow the teledensity from approximately 50 per cent today to 100 per cent. Furthermore, efforts should be channeled towards efficient management of national frequency resources, adding that they should also be made available in a timely manner as “spectrum is the oxygen that supports the wireless ecosystem.”

He further added that there should be continuous investment in the deployment of broadband infrastructure to improve internet penetration in the country. Paying kudos to his successor, Ndukwe describes the new EVC as a “consummate industry person”, who will leverage his wealth of experience in bringing the desired leadership to the nation’s telecoms regulatory agency.

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Etisalat Nigeria surpasses 5 million subscription mark

• pumps $2b into network expansion
• introduces new tariff proposition
Ben Uzor Jr

Steve Evans, chief executive officer, Etisalat Nigeria has disclosed recently that the mobile phone company had crossed the five million line subscription mark within 22 months of entry into Nigeria’s highly competitive telecommunications market. According to him, the company intends to invest $2 billion in network expansion in order to address the issue of network congestion.

Furthermore, Etisalat Nigeria has introduced a new tariff proposition that allows that allows subscribers enjoy lower rates of 25 kobo per second for voice calls from a peak of 50 kobo per second. The new plan called ‘easylife’ is designed to provide Nigerians with more opportunities to talk to friends and family, acquaintances and associates, business partners and colleagues, across the nation.

“Etisalat is proud to contribute its part to ensuring that the voice of the Nigerian spirit is heard loud and clear in all corners of the world in this season of Nigerians’ Golden Jubilee.” He said that the network now has over 1500 cell site nationwide and is building 100 cell sites monthly to increase its capacity.

Evans stated: “we make sure that we would not have congestions like other networks. So, we keep making efforts to build capacity. We have set aside $2billion dollars for this. We are reasonably sure we would be able to handle it.” The CEO said the Etisalat Easylife package, provides various incentives to its customers is the telecoms market’s first adding that, “this is the first time this is being done in Nigeria.

It is in line with our commitment at inception to get 9ja talking because we know that everything in life, business or social, political or religious, requires communication. And we know that when people talk, understanding increases, friendships develop, ideas are generated, dreams are born and life advances.”

As Nigeria celebrates her Golden Jubilee, Evans said that Etisalat is celebrating its second year of operations within an impressive 5 million customers on its network while “every single one of our pan-Nigeria cell sites are data-enabled.” Etisalat network is offering its customers the chance to enjoy a service called “EasyLife” designed to make life easy for all its subscribers on both Easy Starter and Easy Cliq packages, under its Nigeria @ 50 Anniversary promotions.

The Etisalat CEO added that customers can now make calls to any network, anytime and anywhere in the country for as low as 25k per seconds (N15 per minutes) while allowing existing and new subscribers to stay connected to their loved ones, family, business associates during the Jubilee and beyond. Moving forward, Evans said that customer priorities are considered highly by the mobile phone company, a move that initiated the drive for value-added services to empower its customers by introducing a cost-cutting intervention to the market.

Evans promised that Etisalat “will continue to bring up innovative ideas to satisfy our customers.”
Giving details of the tariff offer, Wael Ammar, chief commercial officer, Etisalat Nigeria pointed out subscribers, whether new or existing, need to dial *220*1# to migrate to Easylife while adding that a token of N20 daily access charge is automatically renewed at midnight everyday. This charge he said is to show a level of commitment from subscribers as they have observed that customers sign-up for it and make calls and then go out of it by doing this they can strike a balance.

He noted that subscribers would receive a confirmatory message conveying the success of their subscription and can dial *220# to confirm whether they are on the plan or not while dialing *220# to deactivate. Ammar said that where a subscriber is on more than one tariff plan, the cheaper of both is applied to call cost while adding that calls made at midnight which currently cost 10k per second on Easy Starter and free on Easy Cliq would remain as they are provided when standard conditions are met.

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Thursday, September 9, 2010

Rising levies threaten prospect for affordable telecom services

•Operators pay $60 per metre for right-of-way
Ben Uzor Jr

In spite of the growing number of underwater fibre-optic cable systems berthing on the country’s coastline, Nigeria’s prospects of enjoying reasonably priced telecommunications services could be derailed by the indiscriminate and sometimes absurd levies charged by various agencies and state governments on right-of-way approvals for the deployment of in-country fibre transmission links.

Investigations reveal that across the country, telecoms operators (telcos) pay anything between $50 (N7, 464.5) and $60 (N8, 957.4) per metre for right-of-way. Lagos State charge is about the highest in the country at $60. Wale Goodluck, corporate services executive, MTN Nigeria, told BusinessDay in a phone interview that MTN pay more than $60 per metre for right-of-way approvals in Lagos.

“Look, $60 per metre for right-of-way is an understatement. We actually pay more for right-of-way approval. Moreover, the biggest problem, apart from the prohibitive cost charged by government, is that we have to pay two or three times to local, state and federal governments. The proper thing is for government to continue to create the enabling environment for operators to thrive.

They should encourage telecoms companies by eliminating multiple taxes so that they can easily take fibre to homes, colleges, polytechnics and universities. This will invariably drive the adoption of Information Communications Technologies (ICTs) in the country as well as improve Nigeria’s broadband penetration,” Goodluck further explained. Rights-of-way are the land rights acquired by an operator to allow the construction and operation of fibre optic transmission or distribution facilities.

Traditionally, wires, whether fibre optics, coaxial cables or otherwise, lay in the public right-of-way along with the facilities of public service providers. Industry watchers are worried by the charges since more fibre optic cables are expected to be laid as the information super highway is further developed. To this effect, they have called on the Federal Government to intervene to rein in what they describe as very unusual charges and the consequent cost impact on right-of-way approvals.

They believe reasonable charges will enable operators deploy fibre cables quicker, and subdue the cost of the services they carry to the doorstep of Nigeria’s internet users. The Nigerian Communications Commission (NCC) had earlier appealed to state governments to reduce right-of-way charges for telcos in order to maximise their efficiency and service offering. According to the regulatory body, lesser taxes should be collected from telcos because increased expenditure will ultimately be transferred to subscribers in the form of higher tariffs.

Over the past eight years, telcos have continued to grapple with Nigeria’s unfavourable business environment in their quest to provide good quality service to their teeming subscribers. Despite these challenges, growth in the number of telecoms subscribers has remained on the upswing. Latest data from the NCC reveal that active connections peaked at over 78.9 million lines as at April this year with GSM mobile sector accounting for the traditional market dominance with over 69.6 million lines.

Earlier, Bashir Gwandu, executive commissioner, technical services, NCC, had appealed to state governors at a technology forum held in Lagos recently to reduce rights-of-way charges for telecom companies in order to maximise their efficiency and service offering.

“We have bottle necks around the country for fibre. One of the bottle necks we have today is the international links. But we have transmission links coming into the country, say, from Lagos to Abuja or Abuja to Maidugari. We need right-of-way. Telecoms companies are crying out for right-of-way.

We are appealing to you to make right-of-way as easy as possible because the benefits to Nigerians are enormous. Eventually, even if you cost right-of-way higher, it is consumers that would pay for it. In Lagos, I have operators crying that they are paying $60 pay metre on right-of-way. That is not going to be sustainable for this investment; it is not going to be helpful for Nigerian consumers”, he explained.

In the same vein, Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), advised government not to consider right-of-way approval as a way of generating revenue, but “they should see the end result as the overall interest of the nation’s information communication technology (ICT) development and limit its role to standard compliance and control.

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Wednesday, September 1, 2010

Business stakeholders rise for Glo 1

… As forum moves to PH, Abuja

The business community in Lagos on Tuesday had a feel of the magical possibilities of the Glo 1 international submarine cable as Globacom hosted them to a forum as part of pre-launch activities for the facility. The company said the forum which took place at Eko Hotel & Suits, Victoria Island was organised to present to business stakeholders the unique offers available on the Glo 1 facility as well as the limitless opportunities and huge benefits the facility offers for businesses, governments, institutions and individuals.

A statement from the Marketing Communications Department of Globacom indicated that similar forums will be held in Port Harcourt on September 2 and Abuja on September 9. Speaking at the Lagos event, Group Chief Operating Officer of the company, Mohamed Jameel, said, Glo 1 which will commence commercial services shortly will avail customers an excellent communication network and a cost-effective voice, data, video and e-commerce services across Africa, Europe and the rest of the world.

He explained that the facility will boost business activities from information technology to banking, oil and gas, manufacturing and commerce by offering world-class long distance voice, video and data communication services.

Captains of industries, diplomats, ICT experts, banking and media executives were among those who attended the forum. They included Director, Trade and Investment, British Deputy High Commission, Peter Stephenson; Managing Director Equitorial Trust Bank, Gbolahan Folayan; Group Managing Director of Telnet, Gbenga Odujinrin; Managing Director of CFAO Technologies, Mamadou Bal, and Chief Finance Officer, Dangote Cement, Wole Adeleke. Chief commercial officer, Visafone, Uche Ojo; Group Executive Vice President and CTO, Netcom, Yen Choi, Chief Finance Officer, ABBNG Limited, Adedayo Olowoniyi; Chief Finance Officer, Mobitel, Amaebi Fiderikumo; VP, Sales, Gilat Satcom Jide Ogunbanjo; Gobal Supply Chain Manager, Ranbaxy Nigeria Limited, Kailash Kumar Gaggar; Managing Director, Direct on PC, Anurag Garg; CMO, Cyberspace Network, Sabat Anant, and Executive CTO, Multilinks, Emmanuel Kehinde, also attended the event.

Others are Head, IT Shared Services, Access Bank, Nelson Madu; Head, Netwroks & Telecoms, Spring Bank, Akinlo Jeremy, Divisional Head, Corporate Banking, Afribank, Ndubuisi Osakwe; Head, CIB IT, Stanbic IBTC Bank, Akeem Adesina; Divisional Head, IT, FinBank, Gabriel Obaji; Group Head, IT Operations, Diamond Bank, Steve Obiago; Head, IT Strategy, Stanbic IBTC Bank, Bashir Gidado, and Head, Treasury Division, Fidelity, Chineze Osakwe.

Also in attendance were Network Administrator, MRS Group, Azubuike Teddy Obiora; Head, Database Administration, SPDC, Ola Owolabi; Country Manager, Oil, Gas and Petrochemicals, Mott Macdonald, Stephen Sams; Infrastructure Manager, Oando, Segun Oladele; Senior General Program Manager, Alcatel-Lucent, Peter Schubert, and Seni Williams of Tara Systems. From the media were MD/EIC, Financial Standard, Bola Onanuga, ED, Operations, Champion, Samuel Ibemere, MD, Sun Newspapers, Tony Onyima, GM/COO, Inspiration FM, Wale Ewedemi, GM, Galaxy TV, Kolawole Akintoba and publisher of Technology Times, Sina Badaru.

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Boost in internet bandwidth opens fresh opportunities for businesses

. . . Private sector urged to leverage infrastructure
Ben Uzor Jr

Exciting times are in the making for telecommunications consumers, as some firms are beginning to take advantage of the enormous bandwidth capacity on offer from new fibre-optic cable systems which are rolling out in the country to strengthen existing services and produce new, innovative solutions which promise to transform the Nigerian economy.

Fibre-optic cable systems typically carry telecommunications; internet and other data traffic and offer much higher bandwidth (speeds) than microwave and other radio solutions. For years and until the last few weeks, the only cable system serving Nigeria’s Internet and data needs, was the SAT-3/WASC or South Atlantic 3/West Africa Submarine Cable is a submarine communications cable linking Portugal and Spain to South Africa, with connections to several West African countries along the route.

In the last few weeks, the ‘Main One Cable System’ has launched, more recently, the ‘Glo-One’ cable has reportedly, similarly gone live. Both cable systems are Nigerian owned. Main One belongs to the Main Street Technologies company while Glo-One belongs to Nigeria’s second national operator – Globacom. A few other such initiatives are in the making.

Experts say that the proliferation of submarine cable systems has opened up the Information and Communication Technology (ICT) sector to further foreign direct investment. In addition, they have advised players in the ICT industry to take up the challenge of developing and implementing practical investment plans in the area of broadband infrastructure deployment and content creation so as to spread the benefits of these cables to the Nigerian populace.

Similarly, the Association of Telecommunications Companies of Nigeria (ATCON) in a recent memo to its members announced plans to spearhead a three phase implementation agenda in this direction. This, it was learnt, would include: building infrastructure across the country, managing data services in a new way and embarking on stimulant funding campaign of local entrepreneurs. Besides, all three mobile phone operators (MTN Nigeria, Etisalat Nigeria, and Starcomms Plc) who bought capacity from Main One cable agree that the connection would open a new window of opportunity for them to introduce enhanced mobile and data services that will add value to the life of the Nigerian phone user.

For Starcomms Plc, the connection to Main One cable would enable the firm effectively offer its Inter-Standard Roaming (ISR) Solution, Business Day has gathered. This solution enables a Starcomms CDMA phone user to make pre-paid roaming calls to an international GSM network. Now, customers of Starcomms can enjoy more efficient and quality voice and data services on their phones.

Analysts say that the company has taken the first step towards opening up a vast untapped market for mobile operators. Steven Evans, chief executive officer (CEO), Etisalat Nigeria assured industry stakeholders recently that, “with the latest technology, customers on the Etisalat network will have the benefit of increased broadband and enhanced data services.”

A reliable source at Etisalat Nigeria told Business Day that the company was fully aware of falling revenue from voice services and was indeed positioning itself to becoming a dominant player in the internet space through the expansion of its mobile data services strategically tailored towards enhancing connectivity and boosting efficiency. In addition, the company is examining new pricing models that better reflect actual network usage and guard profitability, the source further explained.

More importantly, Main One’s entry into the Nigerian ICT market will further strengthen new services that will help make vital services like healthcare and education more accessible to those who need them most. “Main One and Cisco Nigeria are collaborating to ensure we deliver content to the people because these cables will only bring value once they can impact lives. With our TelePresence (Advanced video conferencing) solution riding on MainOne’s cable infrastructure, healthcare professionals in Nigeria, for example, will soon be able to collaborate more easily, regardless of location, thereby improving both the timeliness and the quality of care delivered.

Patients will be able to access specialists and physicians from remote locations”, Richard Edet, managing director, Cisco Nigeria told Business Day in an interview. Also, Phillips Consulting, an indigenous company offering management consulting and training services to corporate organisations sees incredible prospects for the cable with regards to bringing education to remote locations and connecting with institutions and tutors across the globe.

Paul Ayim, managing consultant, Phillips Consulting Limited Nigeria who spoke to Business Day on telephone said: “As the capacity of MainOne becomes readily available, firms like ours can now decide to host a server here and individuals who are interested in acquiring knowledge can take advantage of our e-learning solution. We can help transform the learning environment by bringing training and education to remote locations and connecting with institutions and tutors abroad.

“On the side of our clients, it will be less of a problem for them because their IT departments can now support our e-learning solution because issues revolving around bandwidth availability and cost have been removed”.

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