Telcos to face extra sanctions as they fail to pay NCC’s N1.17bn fine

Ben Uzor Jr

Erring operators in Nigeria’s telecommunications market – MTN, Globacom, Airtel and Etisalat will face extra sanctions for failing to meet the payment deadline for the N1.17 billion fines imposed on them by the Nigerian Communications Commission (NCC) for poor quality of service, Business Day gathered. On May 11, the NCC had placed a collective fine of N1.17 billion on the operators for rendering poor services to subscribers on their networks. The regulator, however, gave operators till May 25 to pay the fine, or risk payment of additional two million, five hundred thousand naira (N2, 500, 000) per day for as long as the contravention persists.

The penalties were as a result of the contravention of the provisions of the quality of service regulations by the NCC as the operators failed to meet with the minimum standard of quality of service including the key performance indicators (KPIs). Informed sources told Business Day that operators were unlikely to pay the fine, as they have expressed discontent with the manner the NCC imposed the fine on them. According to operators, the NCC made a public spectacle of the issue, rather than addressing it. To this end, top executives of the four firms are already engaging in intense lobbying with a view to overturning the fine imposed on them.

It was gathered that the operators took a collective decision on the matter after a joint meeting on Thursday last week, vowing not to pay the fine. They had already articulated their position on the matter to the Minister of Communications Technology who promised to discuss the issue with the Presidency. Moreover, Reuben Mouka, head of media and publicity, NCC said yesterday that failure of the affected operators to pay the fine as at close of work on Friday (May 25), which was the deadline, means that the penalty of N2.5 million per day has started counting, including Saturday, Sunday and Monday. This means that they will pay the N1.17 billion and still pay the penalties. “Even if the penalty last for 20 days, they will pay.

“This means that if the penalty period last for 20 days, operators will pay additional N50 million each. We stated this in the circular we sent to them.” Besides, Tony Ojobo, director of public affairs at NCC, yesterday explained that the commission will come out with its final decision on the matter before the week runs out. He stressed that the penalty charges of N2.5 million had started counting, “except there is any reason to do otherwise.” Gbenga Adebayo, chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), blamed NCC, policy makers and the federal government for the current poor quality of service across networks, insisting that the operators would do better, if given the right environment to operate.

“NCC is aware of our predicaments as telecoms service providers, yet it went to make a public show by imposing fine on telecoms operators, instead of helping operators to solve the problems,” Adebayo stated. Deolu Ogunbanjo, President, National Association of Telecoms Subscribers (NATCOMS), who commended the commission on the fine, called on the NCC to redirect the N1.17 billion fine. He suggested that the amount be shared amongst affected telecoms subscribers. According to him, the action of NCC amounted to raising money for government, leaving the subscribers out of the matter, when in actual sense it was the subscribers that suffered the pains and loss of money associated with poor service offering.

A breakdown of the penalties indicates that MTN and Etisalat will pay the sum of three hundred and sixty million (N360, 000, 000) each while Airtel is to pay the sum of two hundred and seventy million naira (N270, 000, 000). Globacom is to pay a penalty in the sum of one hundred and eighty million naira (N180, 000, 000). In the letter communicating the penalties to the different operators, which was signed by the director, legal and regulatory services, Josephine Amuwa, and the head of compliance monitoring and enforcement, Ubale Maska, the Commission said “All the operators are to pay the penalties on or before May 25, 2012 or be liable to payment of additional two million, five hundred thousand naira (N2, 500, 000) per day for as long as the contravention persists.” According to NCC, it monitored the performance of the operators on the different parameters, in line with the provisions of the regulation, as provided for the NCC, and discovered that operators were in contravention of the provisions.

Active mobile subscription hit 99.14 million, says NCC

Ben Uzor Jr

The total number of active telephone subscriptions in Nigeria has reached 99.14 million as at the end of March, 2012, according to latest statistics from the telecoms industry regulator, Nigerian Communications Commission (NCC). Industry analyst who spoke with Business Day yesterday say the figure which represents the combined active subscriptions obtained on Global System for Mobile Communications (GSM) networks, the Code Division Multiple Access (CDMA) and the fixed wired/wireless networks in the country clearly shows that there still exist tremendous opportunities in the voice segment of Nigeria’s highly competitive market.

According to the industry analysts, growth will indeed continue, predicting that the country’s mobile penetration rate was expected to reach 82 percent by 2015. With a population of 167 million, according to the National Population Commission (NPC), and over 99 million mobile phone subscriptions, about 68 million people still do not have access to telephony services. This figure is subjective considering the issue of multiple subscriptions. Majority of the Nigerians without access to telephony reside in rural communities. Industry analysts say telecoms operators must begin to channel more infrastructure investment to the relatively untapped rural markets so as to open up new business opportunities and increase revenues.

Pyramid Research had earlier predicted that Nigeria’s telecoms market will expand by 6 percent over the next five year on the back of telcos’ rural expansion drive. Besides, telcos have in the last decade subsequent to the sector’s successfully deregulation raised the subscriber base from 400, 000 active lines in 2001 to the current 96.6 million active subscriptions. According to data derived from NCC, active subscriptions, which stood at 95.88 million at the December, 2011, increased to 96.15 million, 96.61 million in January and February, 2012 respectively. The networks in March pooled a total of 2.53 million new telephone lines bringing the number of active lines on the various networks to a whopping 99.14 million.

Further analysis of the 99.14 million as at March, which is the latest official data for the industry, showed that while the GSM firms comprising MTN, Globacom, Airtel and Etisalat had 94.53 million active subscriptions; the CDMAs such as Visafone, Starcomms, Multi-Links and the distressed Zoom Mobile had 4.01 million and fixed line operators only had 599,335 lines ont6heri networks. Official industry data showed that though the active subscriptions stood at 99.14 million as at March, the actual number of connected on all the networks was 134.91 million. It was gathered that wide margin between the active lines and the actual connected lines it is safe to conclude that 35.74 telephone lines are redundant or inactive.

Also, the data also showed that teledensity in the country has also increased as it has direct relationship with the growth in telephone subscriptions, increasing from 68.68 in January to 69.01 in February and in March, 2012, it moved up to 70.82.Teledensity is the percentage of the number of phone users per population at a given period of time and its growth is proportional to the growth in the subscriber base. Another highlight of the data is the installed capacity of the operators, which is the total number of telephone lines that the operators can accommodate on their networks at a given period of time. As March, 2012, the operators had total installed capacity of 176.66 million lines. The figure stood at 173.63 million lines and 178.17 million lines for January and February respectively.

Software piracy cost Nigeria N39.4bn in 2011, says BSA

Ben Uzor Jr

Nigeria’s quest to become a global Information Communications Technologies (ICTs) investment haven is been threatened by the problem of software piracy as a new study reveals that commercial value of unlicensed software installed on Personal Computers (PCs) in Nigeria reached $251 million in 2011 as 82 percent of software deployed on PCs during the year was pirated. This rate, according to new piracy study by the Business Software Alliance (BSA) and made available to Business Day on Monday, remains unchanged from 2010, and stands at almost double the global piracy rate for PC software, which is 42 percent.

Report findings indicate that current efforts to address the negative impact of piracy on the Nigerian economy need to be continued and maximised. In the last eight years, since 2003, the piracy rates in the country have dropped a total of 2 percent, down from 84 percent in 2004. Emmanuel Onyeje, general manager, Microsoft Anglophone West Africa, told Business Day that only a sound intellectual property policy will help reduce piracy and the threat it poses to the growth of technology companies in the country. “In addition to strengthening the economy, sound IP policies can help reduce software piracy and counterfeiting which threaten legitimate businesses and expose consumers to the risks that come from using non-genuine software.

“Software piracy and counterfeiting tend to thrive more in places with weak IP protection”, he added. “If 82 percent of consumers admitted they shoplift — even rarely —authorities would react by increasing police patrols and penalties. Software piracy demands a similar response: concerted public education and vigorous law enforcement,” said Dale Waterman, Corporate Attorney for Anti-Piracy for the Middle East and Africa region at Microsoft, a member of the BSA. According to Waterman, significant reductions in software piracy rates will only become reality when the Nigerian government becomes actively involved in driving long-term educational and awareness initiatives and taking appropriate enforcement action to ensure that those that pirate face real penalties. This, according to him will benefit the entire IT ecosystem in Nigeria. “Software piracy persists as a drain on the global economy, IT innovation and job creation,” said BSA president and CEO Robert Holleyman.

“Governments must take steps to modernize their Intellectual Property (IP) laws and expand enforcement efforts to ensure that those who pirate software face real consequences.” Globally, the study finds that piracy rates in emerging markets tower over those in mature markets — 68 percent to 24 percent, on average — and emerging markets account for an overwhelming majority of the global increase in the commercial value of software theft.

This helps explain the market dynamics behind the global software piracy rate, which hovered at 42 percent in 2011 while a steadily expanding marketplace in the developing world drove the commercial value of software theft to $63.4 billion. The BSA confirmed that there are proven steps that governments around the world can take to effectively reduce software theft. According to the BSA, government must increase public education and raise awareness about software piracy and IP rights in cooperation with industry and law enforcement.

“Governments must modernize protections for software and other copyrighted materials to keep pace with new innovations such as cloud computing and the proliferation of networked mobile devices. They should also strengthen enforcement of IP laws with dedicated resources, including specialized enforcement units, training for law enforcement and judiciary officials and improved cross-border cooperation among law enforcement agencies. Lastly, they should lead by example by using only fully licensed software, implementing software asset management (SAM) programs, and promoting the use of legal software in state-owned enterprises, and among all contractors and suppliers.

Telcos lobby to overturn NCC’s N1.17bn fine on poor services

Ben Uzor Jr

Top executives of the ‘big four’ telecommunications companies are engaging in intense lobbying with a view to overturning the N1.17 billion fine imposed on them by the Nigerian Communications Commission (NCC) over poor quality of service rendered to subscribers in the country, Business Day has learnt. Sources have confirmed that the telecoms operators held a strategic meeting with NCC helmsman on Friday at the commission’s corporate headquarters in Abuja, barely one week to the expiration of the deadline imposed by NCC for payment of fines for falling below regulatory quality benchmarks in service delivery to phone users in Nigeria.

The rationale behind the meeting, according to sources was to appeal to the NCC to reverse its fines against them and also explain the implications of going ahead with the implementation of the fines against them. Reacting to this, Tony Ojobo, director, public affairs of NCC told Business Day at the weekend that the commission “will not back down for any reason. The penalties are as a result of the contravention of the provisions of the Quality of Service regulations by the commission. Operators failed to meet with the minimum standard of quality of service including the key performance indicators (KPIs). Erring operators must pay the fine”.  

Ojobo however did not confirm if any meeting took place between the commission and telecoms operators last week. Sources say NCC boss is not likely to give in to the pressures from the telecom operators’ executives as the senate has ordered the commission to make certain that operators pay the fines. According to the source, telecoms operators have also appealed to the commission to extend the timeline for payment of the fine. This was if the operators’ first appeal of overturning the fines fails. On May 10, the telecoms regulator had wielded the big stick which would see South African owned MTN Nigeria and Etisalat Nigeria, owned by Etisalat Group of the United Arab Emirates (UAE), pay N360 million in fines respectively.  

On the other hand, Airtel Nigeria, the local subsidiary of Bharti Airtel of India, will pay N270 million whilst Globacom, Nigeria’s Second National Operator (SNO), will pay N180 million. Beyond this, the mobile network operators (MNOs) were also expected to pay their respective fines not later than May 25 this year. If operators fail to comply, they risk a fresh round of disciplinary fines pegged at N2.5million per day for failure to meet payment deadline. Subsequent to the sanctions, the Senate has ordered the NCC to ensure that operators pay the fines following overtures underway by the affected companies for a review of the sanctions.

The quartet of MTN Nigeria, Globacom, Etisalat and Airtel, have invested more than N1 trillion in building and enhancing networks in the country over the last ten years. The operators made the disclosure in an advertorial jointly published in various newspapers from Wednesday last week, further adding that a further N400 billion will be deployed this year by them to enhance infrastructure across their networks. Bound in a rare coalition by a common threat last week reassured consumers of improved service quality within the next twelve months, while they called for the understanding of all on the current harsh environment in which they operate.

According to them, the “fines will not bring about the desired service quality improvements or offer a lasting solution but will merely deplete essential resources that would otherwise be deployed for network roll out.” The quarter said in a joint statement called on the government and telecoms administration in Nigeria to work in harmony towards continued promotion of investment in the telecoms sector. The affected telcos appealed to the Nigerian consumers over the poor quality of service, and pledged to improve their services drastically with the next 12 months by further investing heavily to support their network infrastructure. 

“We are all equally frustrated and concerned about the failures to meet customer expectations and needs with respect to the quality of service. Nigeria deserves and needs first class telecoms networks. We thus apologize unreservedly to you, our customers, for those occasions when you have been disappointed or inconvenienced by a lapse or failure to deliver the requisite level of quality of service. We however believe that it is necessary to explain the major challenges we face as operators and ask for your understanding and support”, they said.

Deolu Ogunbanjo, president of the National Telecom Subscribers of Nigeria (NATCOMS), also said that the fine, when collected, must go to the subscribers, who are the ones that suffer poor quality of service always.  “It’s a good thing that NCC has finally decided to sit up, and get proactive, by doing the work of a regulator. The fine should be paid to the subscribers, because it is them that network operators deliver poor service to.” Responding, Ojobo, said there was no case as to who the fine should be paid to. “It is a law, and the fine has to be paid to the commission. The commission will take a decision on what to do with the money. Fines are supposed to be punitive; it’s a penalty that must be paid.

“It’s not about the money when it is eventually collected; it’s about the bad signal it sends to the international organisations. This fine is something that will make people uncomfortable. Because when you are fined, it does something to your organisation,” he said. When asked about the poor power supply, which is one of the causes of poor QoS, Ojobo said the commission was not power holding, and so has no power over what goes on in their organisations. “If the telcos are having issues with power, they should deal with it. The power issue has been there for over 11 years, and they must be creative in dealing with it. It has not stopped some of them from declaring profit over the years, thus they must be able to convert some of the success stories into ideas to steady power supply for their industries,” he said.

HP, Samsung, LG to lose as FG bans use of foreign computers

·        Offenders risk jail, fine

Ben Uzor Jr

Hewlett-Packard, Samsung, LG and other foreign Original Equipment Manufacturers (OEMs) will lose their grip on Nigeria’s Personal Computers (PCs) market as the Federal Government yesterday finally moved to enforce a comprehensive ban on foreign computers and technology products in public institutions, including schools. The aim of the ban is to encourage patronage of ‘Made-in-Nigeria’ products and foster growth in the local Information Communications Technology (ICT) industry. Cleopas Anganye, director-general of the National Information Technology Development Agency (NITDA) made this declaration on Tuesday at a two-day retreat held in Lagos on draft guidelines for home grown IT hardware products.

Stressing the importance of benchmarking Nigeria’s IT products against international standards in order to make them competitive and marketable within and outside the country, Angaye further declared the public procurement of non made-in-Nigeria computers where certified local brands exists will be an offence punishable by a prison term and fine under the NITDA Act. Industry analysts told Business Day yesterday that Nigeria’s computer hardware market has remained underdeveloped due to poor policy formulation and implementation on the part of government as well as the attendant high cost of equipment acquisition in Nigeria.  

According to the analysts, inspite of the growing number of local OEMs and resellers, along with the significant growth recorded in the telecommunications industry after the sector was successfully deregulated in 2001; PC penetration remains very low at 7 per 1, 000 Nigerians. Angaye noted that the Federal Government’s accreditation of computer assembly plants has expired. This, he added, has necessitated the need to develop new standards for computer manufacturing in the country.  After the conclusion of the retreat and subsequent issuance of the new guidelines, the NITDA boss explained, it would be regarded as economic sabotage if Ministries, Departments and Agencies (MDAs) do not patronise Nigerian IT products.

Angaye, represented at the retreat by director, standards and regulation, NITDA, Inye Kemabonta, said the IT implementing agency will in the next fortnight launch a monitoring scheme to ensure compliance by all public institutions across Nigeria. According to NITDA, under its enabling laws, three key acts will be an offence punishable by a prison term, fine or both if flouted in the emerging dispensation by the agency to foster patronage of local ICT products and services. Firstly, the public procurement of non made-in-Nigeria computers and IT products where certified local brands exist is an offence. Secondly, the display and use of non made-in-Nigeria computers in government offices and for government business where certified local brands are available is also an offence punishable by law.

Lastly, use of non made-in-Nigeria computers in public schools at all levels is likewise an offence. In the same vein, Chris Uwaje, president of Institute of Software Practitioners of Nigeria (ISPON) enjoined government to provide the enabling environment for indigenous computer manufacturers to thrive.  Angaye further added, “To benefit from this policy, multinational companies are invited to set up production or assembly plants in Nigeria. According to him, with more than half the population of West Africa, Nigeria has a large enough market to justify foreign direct investment in IT. “Instead, one finds that all the multinational firms operate only marketing and sales promotion offices. The transformation of Nigeria into a developed economy cannot be achieved by being a consumer nation.”

NITDA also read out the riot act to administration of public schools on patronage of local IT products in its drive to encourage the ICT industry. “Use of non made-in-Nigeria computers in public schools at all levels. NITDA will seek the collaboration of the Federal Ministry of Education to ensure that the accreditation of schools and renewal of accreditation will depend partly on the establishment of Information Technology labs equipped with locally manufactured IT products”, Angaye concluded. Local computer manufacturers at the retreat expressed confidence in governments renewed efforts to develop the IT industry, create employment through local assembly of computers and build the capacity of Nigerian IT entrepreneurs.

“I do not see any reason why our people shy away from locally made PCs. If you open a locally made PCs and other foreign brands, you will find that the same components in all of them. We all buy from the same component manufacturer. If giving a chance, we can compete favourably with the foreign brands. We already have the policies on ground that supports usage of locally made computers. I think the fundamental issue militating against the development of industry is implementation of these policies”, Tunde Balogun, president of Computer and Allied Products Dealers Association of Nigeria (CAPDAN) said.