NCC PRESS RELEASE
August 28, 2007
Press ReleaseNigeria Marks Six Years of Telecoms Revolutions
August this year marks the sixth year anniversary of the introduction of the Digital Mobile Communications services popularly referred to as GSM in Nigeria. Before then, access to telephone was the exclusive preserve of the rich and privileged few in our society.
Today, GSM phones beep in almost every palm, pocket, handbags, offices, parties, school hostels, Beer parlors etc. Just listen to the numerous ringing tones coming from different GSM phones when an aircraft comes to a halt and the engines turned off. These and many more are happening with such ease today, that many people seem to have forgotten what communication was like before the advent of GSM in Nigeria.
Prior to 2001, the number of connected phone lines in the country before the introduction of GSM services was a mere 450,000 for an estimated population of 120 million at the time and the level of investment in the telecommunications sector was just about 50 million US dollars only.
Six years on, the growth of the telecommunications sector is unmatched by any other sector and it has recorded a phenomenal growth both in terms of subscriber’s base and infrastructural development in the country
Digital Mobile Licence (DML) Auction
In January 2001, the Commission conducted an auction for Digital Mobile Licenses. This auction was acclaimed locally and internationally as one of the best in the world due to the high level of transparency associated with the exercise. The auction brought about the emergence of three mobile Operators; ECONET Wireless now (CELTEL), MTN and MTEL, a subsidiary of the incumbent operator. The Nigerian Telecommunications Limited (NITEL), which was also awarded an operating license as a National Carrier. In 2002 a fourth Digital Mobile License (DML) was issued to Globacom (Glomobile) through another transparent auction process.
To further increase competition a fifth Mobile License (with GSM spectrum) was awarded to Emerging Market Telecommunications Services Limited, early this year.
The transparent manner in which the Commissions handled the DML gave the impetus to other licensing auctions that followed. These include, the Second National Operator (SNO) granted to Globacom, Fixed Wireless Access (FWA) licenses granted to 24 companies on Regional basis, the Unified Access Service Licenses (UASL), 3G Licenses granted to 4 companies.
Through the award of these licenses the NCC facilitated a phenomenal expansion of telephone lines in Nigeria, from about 450,000 connected lines in May 1999 to over 38 million lines by July 2007, boosting teledensity growth from 0.4 to 24. The capacity for growth in the number of phone lines in the country over the next decade remains quite high, as some parts of the country are yet to be covered.
Internet Services Providers (ISP)
In order to facilitate the penetration of internet services the Commission has licensed several Internet Service Providers (ISPs) and has further encouraged the spread of internet access by initiating a class licensing regime to simplify authorization processes for Cybercafés and Tele-centers. The Commission has also facilitated the establishment of an Internet Exchange Point for Nigeria which is now fully operational.
Investments in the Telecommunications Sector
Prior to the licensing of the Digital Mobile Operators, private investment in the telecommunications sector was just about 50 million US Dollars. Between 2001 and now, the sector has attracted over 9.5 Billion US Dollars, substantial part of which are direct foreign investment. With the rapid expansion plans by many of the major service providers, another 3 Billion US Dollars of investment is expected before the end of the year.
Nigeria has thus become one of the most desired investment destinations for ICT in Africa. This could not have been possible without a conducive and predictable regulatory environment.
Revenue to Federal Government
In addition to this, the Federal government has earned over $2.5 Billion US Dollars from Spectrum licensing fees alone between 2001 and now. Import duties and taxes from the telecom industry have also contributed substantial revenue to the Federal Government.
Review of Tariff Rates
By the introduction of competition, telecommunication services are now easily available at affordable prices. Before the advent of digital mobile services in 2001, cost of subscription to Mtel analogue mobile services was over N60,000. In 2001, GSM subscription started with a price of twenty thousand Naira (N20,000) per line and today, has fallen to almost zero. The introductory tariff was high at fifty Naira (N50.00) per minute but today, a minute call on GSM network can be as low as about twenty five Naira (N25.00) per minute on-net (mobile to mobile).
The Commission has consistently monitored what prices the operators are offering their services to the public, by approving all tariffs in line with the provisions of the Act and thereafter monitor implementation.
As a policy and in line with international best practices, the Commission has adopted a policy of ensuring maximum competition to drive down price. This we have done by licensing competitive operators in all segments of the market. Today, Nigeria remains the most competitive ICT market in Africa, with service providers competing fiercely for market share and price of products.
Instead of intervention in retail call rates, the Commission has instead intervened in determining interconnect rates for the industry. The combined effect of the two interconnect rate determinations in 2004 and 2006 was a reduction of the mobile termination rate from N18.00 per minute to N11.40 per minute. This has enabled the fixed operators to reduce their retail tariffs for calls to mobile networks to as low as N20.00 per minute. The Commission will be initiating a process for reviewing the interconnect rates in the next few months in line with international best practice.
The Commission has been very active and innovative over the years in protecting and promoting the interest of consumers of communications services. The Commission remains the only agency of government to provide a regular platform to encourage the consumers to publicly voice their complaints in fulfilment of its mandate for consumer protection and empowerment through the following initiatives:
The Telecom Consumer Parliament (TCP): – It is a platform created by the Commission to bring together stakeholders in the industry (i.e the Telecom Regulator, Operators and Consumers) to openly discuss problems affecting the Consumers of Telecommunication services. This novel approach in dealing with consumer issues has been acknowledged by the ITU as an innovative and effective mechanism for resolving the complaints of consumers. It is held every month across the six (6) geopolitical zones of the country.
Consumer outreach program (COP): –Is an initiative of the Commission to address specific consumer issues, provide vital information, create awareness and bring operators face to face with consumers, thereby ensuring that telecom consumers are protected.
Customer Care Centre: – This centre is established within the Commission to collate and respond promptly to consumer enquiries and complaints through e-mails, formal letters, telephone calls, etc. Many consumers have had their complaints resolved through this medium.
Support for Consumer Advocacy Groups: – The Commission is supportive of the activities of several Consumer Advocacy Groups. This is novel approach in the history of consumer care in Nigeria.
Collaboration with Consumer Protection Council (CPC): The Commission has signed an MOU with the CPC aimed at collaborating to further ensure protection of Consumers in relation to telecom service delivery.
At the NCC, we regard consumer protection as our prime focus area and will not spare any resources in ensuring that the Nigerian consumer of telecom services is well looked after.
Ownership of phones now cuts across the various social classes, opening good opportunities for the e-health, e-education, e-security, e-commerce and e-banking in the country.
The outstanding growth in the telecommunications sector has correspondingly created a significant number of new jobs in the economy. Also, other sectors such as advertising, real estate and finance have gained tremendously from the ripple effect of the growth in this sector. Today the telecom sector is a key contributor to the nation’s Gross Domestic Products (GDP).
Universal Service Provision
The revolution in the industry brought about by the rapid expansion of telecommunications services nationwide, led to the enacting of the Nigerian Communication Act 2003 repealing the 1992 Act. The Act established a Universal Service Provision Fund.
The objective of the Fund is to provide subsidy for service delivery in high cost areas especially the rural and under-served parts of the country. The Board of USPF was inaugurated in July 2006.
In order to ensure that telecommunication services are extended to rural/ underserved/unserved areas the Commission has supported and promoted a number of initiatives through the Universal Service Provision Fund.
Community Communications Center (CCC): The project is aimed at establishing Community Communications Centers that will extend voice. Internet, ICT training and other services to unserved communities on shared basis. Each center will provide a public calling center, cybercafé and ICT training courses, as well as serve as a platform from which to wirelessly extend Internet access to surrounding communities.
Schools, Universities Access Program to Digital Life Style (SUAP2DLS): The SUAP2DLS project is designed to provide Broadband connectivity to schools and universities and neighbouring communities with particular focus on the rural areas.
Rural Broadband Internet (RUBI) Access: The project will award subsidies to successful proponents to provide wholesale Internet bandwidth to Community Communication Centers (CCC), Cybercafés, Rural Internet Service Providers (RISE), Institutions, etc, in rural communities in Nigeria.
Accelerated Mobile Phone Expansion (AMPE) Project: To take advantage of the ease in deployment of mobile services the Accelerated Mobile Phone Expansion (AMPE) Project is designed to encourage network roll out in at least 5 unserved towns/villages in each of the 774 Local Government Areas (LGA)
Backbone Transmission Infrastructures: The project will provide voice and data access points in LGA headquarters with backbone connectivity.
The Digital Bridge Institute
The growth of the number of skilled manpower in the telecom industry over the last six years has been remarkable. The NCC took certain timely initiatives to ensure that the dearth of skilled Nigerians to run the fast expanding telecom industry in the country was remedied.
A milestone was achieved on May 20, 2004 when Mr. President commissioned the ultra modern Digital Bridge Institute (DBI) in Utako, Abuja, established by the NCC as an international centre for advanced telecommunication studies.
Apart from training technical manpower, the DBI trains personnel in other specialist areas such as economic analysis, financial planning, law, arbitration, mediation, interconnection, e-commerce, business management, human resources and consultancy services.
The Telecommunications Training Schools in Kano and Oshodi have been recently transferred to the Commission by the Federal Government and are being resuscitated to become campuses of the DBI. It is planned that from next year the expanded DBI will be providing multifarious ICT training programs for over 2000 graduates annually to service both local and international markets.
Digital Appreciation Program
As its contribution to the development of computer appreciation among young Nigerians, the NCC started the Digital Awareness Program (DAP), which is aimed at encouraging the appreciation and use of ICT in primary, secondary and tertiary institutions all over the country. A total of 119 educational institutions have so far been provided with computers and internet facilities. At all the locations, the rooms housing the computer labs were refurbished and standby power supply provided.
In collaboration with the DBI the commission has provided ICT training for several hundreds of students from the schools that benefited from the DAP.
Another program, the Advanced Digital Appreciation Program-Tertiary (ADAPT) is aimed at meeting the identified need of training lecturers in Nigerian universities to prepare them to use ICTs both for their work and as aid for web-based training and learning.
Institutional Strengthening of the NCC
In April 2000, a new Board of the NCC was constituted and inaugurated. At that time, the Commission’s workforce was small and in no position to adequately discharge its statutory functions as the regulatory agency of the telecommunications industry of Nigeria.
The challenge of building a strong, professional and independent regulatory agency was taken up by the Board. At the time the NCC operated from three small dwelling houses, totally inadequate for even the small staff complement at the time. Some one wrote during those early days that the NCC had “one and a half engineers, a Commission Secretary and some protocol officers”.
It has been the policy of NCC that it must at least maintain the same if not even better and higher levels of the skills possessed by those who work in the telecommunications industry. The Commission therefore devotes a lot of resources to Staff training and development. This has contributed to earning her the reputation as the foremost regulatory institution in Africa. The Commission also places a lot of emphasis on staff welfare and conducive working environment.
From a cluster of three detached dwelling houses in Garki area, the NCC relocated to the Benue Plaza, a more conducive building in the Central Business District of Abuja while the construction of its Head Office building was going on. Today, the NCC now has a permanent and very modern Head Office complex. The building was carefully designed and continually modified throughout the construction period to provide pleasant surroundings to those who will work in it and to all those who will have any business to conduct with the NCC.
Quality of Service Challenges
Though tremendous progress has been witnessed in the telecommunications sector, there remain numerous challenges. One of such challenges is the present poor quality of service being experienced in the network.
However, the Commission is working assiduously to ensure that the quality of service improves significantly within the shortest possible time. The Commission is now working with operators to achieve network optimization and speed up the rate of deployment of new base Stations, switches and transmission infrastructure. In addition, the Commission has stopped all Service Providers from all promotional activities that will lead to increase in the volume of traffic until such a time that there is substantial improvement in the Quality of Service on the networks. We condemned in absolute terms the irresponsible action of major mobile operators in embarking on promos that their networks were ill equipped to carry.
NCC has further directed that as long as the poor Quality of Service persists, service providers should not place any restriction or time limitation on validity of airtime credits so that subscribers are not compelled to utilize their call minutes within restricted time frames. It is believed that these measures will further reduce the pressure on the networks of service providers and thus contribute to an improvement in the Quality of Service.
The major contributor to the current QoS challenges is network capacity constraints. The operating companies have not been able to expand their networks fast enough to meet the ever growing demand by subscribers. This was further aggravated by a few factors such as the near total collapse of Nitel Long distance transmission infrastructure which a number of Service Providers depended on for their interstate links. With the fall of Nitel also came the collapse of Mtel which depended heavily on Nitel for its transmission requirements. Thus several subscribers to the Mtel service migrated to the other three networks with its attendant effect on aggregate network capacity generally.
Other issues such as major deterioration in the public power supply situation in the past twelve months; security challenges; theft; transmission cable cuts; delay in securing approval for siting of new base stations; etc, have also contributed in various degrees to the problem.
At the NCC we maintain that the responsibility to ensure good and acceptable quality of service rests with the Service Provider.
With the current rapid expansion programs being implemented by all the service providers, and other measures the Commission has put in place, the QoS situation has started to record improvements. The recent intervention of the Ministers of Information/Communications and the FCT in the case of Abuja will also translate to major improvement in QoS in the Federal Capital Territory.
To ensure that this situation remains the focus of the industry stakeholders always, the Commission has constituted an industry working group on Quality of Service. Also, Guidelines on Infrastructure sharing which was published last year will be strictly enforced to encourage infrastructure sharing at all levels
The Future Outlook
At the present rate of network growth it has been predicted that Nigeria will overtake South Africa to become the largest Telecom Market in Africa. A lot of emphasis is also being placed on growing Nigeria’s data capability by promoting large scale broadband internet and optic fiber rollout across the country.
||Wire Nigeria Project (WiN)
The objective of the Project is to provide a Nationwide Fiber Optic Transmission Infrastructure throughout the country; the ultimate goal being facilitating the upgrade of 1CT structures in the country. A number of companies have rolled out services in this regard with the addition of over 6500km of new optic fiber cable installed since 2003. The Commission is soon to award subsidy to a successful bidder for the building of a core, high capacity fiber optic layer and there are other on going projects for installing fiber cable over electric power lines which will further boost the capacity of transmission lines available to support the fast network growth. In the next two years, Nigeria will be fairly well served with transmission capacity to support anticipated large scale demand for broadband, voice and data services.
State Accelerated Broadband Initiative (SABI)
The State Accelerated Broadband Initiative (SABI) is designed to encourage the private sector to build and run a broadband infrastructure with government support and incentives in all state capitals and selected major commercial cities in the country. It is hoped that before the end of Q1, 2008, this program would have been completed.
The Commission is committed to the attainment of a robust, efficient, ubiquitous and high quality national network and will continue to provide the necessary regulatory oversight that will guarantee the attainment of this goal in the nearest future.