It’s time to move forward on telecoms sector

WHEN the Nigerian Communications Commission (NCC) last year fined MTN Nigeria $5.2 billion for failing to remove unregistered subscribers from its network in contravention of a clear industry regulation, it signalled a critical turning point in the Nigerian telecom sector.

The NCC showed it does not only bark; it can also bite. Given that development, the Mobile Network Operators (MNOs) were expected to take the regulatory regime more seriously than in the past. While the various publics of the Nigerian telecom industry await closure on the MTN Nigeria fine, it is time to highlight some other issues begging for the regulatory intervention of the NCC.

Two big areas of long-awaited intervention are consumer protection and anti-competition practices. 15 years after the launch of GSM in Nigeria, subscribers have continued to experience poor quality of service. Very regularly, we experience dropped calls, difficulties in completing calls, and questionable deduction of subscribers’ credit balances.

Subscribers are often charged for services they did not subscribe to, and various schemes are devised to make them subscribe to services they would not have subscribed to, with no easy way of unsubscribing. Where weary subscribers decide to complain by calling the call centres, they are subjected to long periods of waiting for agents to talk to them. While the calls are placed on hold, repeated commercial adverts are played, giving the impression that the delay to getting an agent on the line is a stratagem for marketing or publicity of commercial offers, without solicitation.
None of these issues is justifiable, although they have persisted. Nigeria has proved a

very lucrative market for mobile services. As such, the country supports investments that would improve quality of service. The excuse of Nigeria’s inadequate infrastructure is untenable, except where there is very low commitment to quality of service. The telcos can also employ more agents to cut the wait time when their call centres are called to resolve issues. What’s more, there is a regulator whose statutory responsibility it is to enforce the protection of subscribers from these issues, and the larger society from unethical practices in the industry.

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But these are just a few of the ways subscribers of mobile services are being frustrated and abused by the MNOs. The Mobile Network Operators have also been spamming their subscribers. Every now and then, we receive unsolicited messages via the Short Message Service (SMS). The messages are delivered via short codes that have no feedback mechanism, and it is thus impossible to unsubscribe from the spam messaging. The only hope for the spamming frenzy to stop is for the regulator to get the MNOs to stop it. With its continuation, it is either the NCC is turning a blind eye to this unethical practice or its directives are being ignored by the big and powerful telcos which is actually the latter. This has created a sense of helplessness in society on deleterious practices that are easily stopped with a combination of a few keystrokes and mouse clicks.

Subscribers might be less reticent about the anti-competition practices of the MNOs. This is the case because anti-competition practices have been part and parcel of the development of the mobile services industry in Nigeria. The MNOs started with collusion on exorbitant call tariffs. They charged a whopping N50 per minute. Nigerians were denied Per Second Billing, although Per Minute Billing had been anachronistic in several jurisdictions, including in Africa at the time. With the advent of PSB in Nigeria, subscribers still pay tariffs way higher than the rates in many other markets. Mobile data tariffs in Nigeria are also above the industry average in other African countries; Ghana a much smaller market than Nigeria has the lowest tariffs in Africa.

Nowhere is the issue of anti-competition more poignant than in the Value Added Services (VAS) segment of the telecom market. We have the content providers who deliver contents straight to the MNOs. Recently, the Nigerian Communications Commission decided to restructure the VAS market by making it more competitive. It organised a forum to intimate stakeholders in the VAS market with a three sub-structure that would have the content developers, the content aggregators, and the MNOs who are the carriers. (Currently the mid-section the aggregators do not exist.) But as it turned out, this initiative was strongly resisted by the MNOs. The NCC forum was practically scuttled on any possible agreement to restructure the VAS market which is estimated at N350 billion yearly, and dominated by the MNOs.

As a result of the stunted structure of the VAS market, subscribers are denied quality contents; they are charged rates that are arguably uncompetitive and the market is denied better dynamism and job creation. The underdeveloped market structure is of significant consequences. It has created a monopolistic structure whereby one MNO substantially controls the VAS market through a subsidiary. This creates a seller’s market which the NCC market restructuring plan wants to eliminate.

Without the content aggregators who would act as off-takers of contents, it is unlikely we would have the level of content development that represents the true potentials of the market. It is a limitation to efforts to drive investment into the VAS market. Also inimical for the growth of the market is the leverage the MNOs have when negotiating rates with the content providers. This, again, is capable of stifling content development as, with lower-than-optimal-income from their creativity, the content developers are less able to develop capacity and create jobs.

An NCC that is alive to its responsibility and unfazed by the stature of the MNOs is key to redressing the issues that stifle consumer protection and market development in Nigeria’s telecom industry. It is naïve to dismiss the enormous influence the MNOs wield in the market, which might prove challenging for the NCC in Nigeria’s environment where the regulatory framework is, really, quite nascent. The protracted negotiation of the MTN fine, with MTN’s mobilisation of the South African government and the hire of a former US Attorney General, Eric Holder, buttresses the intimidating clout of MTN.

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Nevertheless, the NCC must do its job. The government has to back its regulatory institutions and support their evolution in becoming more effective. President Muhammadu Buhari has done well to appoint a respected academic, attested as a man of character, as Executive Vice President and CEO of NCC. But the administration must do more to empower the regulator. NCC must be co-opted into the programme of institutional renewal of the government to drive optimum productivity, boost revenue and create jobs. In this regard, there must be presidential backing provided to NCC to regulate the market and restructure it in the overall interests of all, and some, stakeholders.

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It is also important that subscribers continue to push for remedies for the issues that affect us. Consumer self-advocacy is easily done in the age of social media. We don’t have to keep quiet and suffer in silence in the face of abuses by the MNOs. Keeping quiet will not incentivize the change we want.

We have to continue to advocate for our protection by the regulator. The step NCC plans to take in restructuring the VAS market must see the light of day in spite of the move by the MNOs to block it. It is when there is competition in the market that rules can be better enforced and not when what obtains is a monopoly or, at best, an oligopoly.