In the midst of operational challenges, which reflect in a
regime of unsatisfactory quality of services, the telecoms sector has
continued to provide the needed stimulation for other sectors of the
economy including finance, aviation, advertising and entertainment among
others, reports Festus Akanbi
The problems have become amplified in the last 12 months or so. Last
year was particularly characterised by one of the worst spells of
sub-par quality of service in many years. The telecom industry
regulator, Nigerian Communications Commission (NCC), yielded to public
pressure to take action over the issue at least twice.
It imposed a total fine of N1.17 billion on all the major telecom
operators in the country in the first half of the year. In the absence
of marked improvement in the situation, NCC imposed a ban on all manner
of promotions by the operators in the second half of the year. The two
actions did nothing to bolster the poor quality of service across the
sector.
Challenges
In fairness to the operators, there are a number of operational challenges, many of them unique to Nigeria, that have direct adverse impact on the overall quality of service of the operators.
In fairness to the operators, there are a number of operational challenges, many of them unique to Nigeria, that have direct adverse impact on the overall quality of service of the operators.
The operators have made a sing-song of these challenges over the years,
but perhaps, the experience of last year is all the proof the country
needs to believe the operators that environmental factors contribute
immensely to the quality of service they are able to deliver to their
subscribers.
Year 2012 witnessed unprecedented operational challenges in the
industry, and correspondingly, the quality of service plunged to what
one commentator described as seven-year low.
The worst cases of equipment vandalism were recorded last year by
virtually all the operators, beginning from January to December. But
perhaps, more importantly, it was also a year of one of the most
widespread natural disasters in the country. A series of floods
described by experts as the worst in five decades ravaged most parts of
Nigeria putting many base stations out of commission or out of the reach
of maintenance engineers for weeks and months.
The flooding disrupted the roll out plans of operators. It threw
spanner in the works of a nationwide network modernisation project being
carried out by the country’s leading ICT company, MTN. The operator had
announced that the project was aimed at significantly boosting the
capacity of the network and enabling it to provide significantly
enhanced quality of service for its millions of subscribers, among other
things.
The network modernisation exercise was started in April and was to be
completed in nine months before the flooding and terrorism incidents.
For months, massive floods denied the operator’s engineers access to
project sites.
Elsewhere, especially in the north, general insecurity of lives prevented engineers from carrying on with the project as scheduled, as time ticked by.
Elsewhere, especially in the north, general insecurity of lives prevented engineers from carrying on with the project as scheduled, as time ticked by.
Attacks on Facilities
The past year was also the point when armed insurgents dramatically entered the telecom scene, hitting a number of telecom installations. In the first of the attacks, hundreds of mobile phone masts belonging to telecom operators and telecom infrastructure service providers in northern Nigerian cities of Kano, Maiduguri, Gombe, Bauchi and Potiskum were hit in two consecutive days of coordinated attacks.
The past year was also the point when armed insurgents dramatically entered the telecom scene, hitting a number of telecom installations. In the first of the attacks, hundreds of mobile phone masts belonging to telecom operators and telecom infrastructure service providers in northern Nigerian cities of Kano, Maiduguri, Gombe, Bauchi and Potiskum were hit in two consecutive days of coordinated attacks.
Operators affected included MTN, which has the largest number of base
stations across the country, and consequently suffered the most loss.
Others affected included Airtel, Etisalat, Globacom, Visafone, Helios
Tower and IHS Nigeria. Indeed, Airtel in a press conference later
announced that about 53 of its installations were attacked, disrupting
operations in 193 sites across the Northern part of Nigeria.
Millions of telephone subscribers in the affected regions were thrown
out of service for weeks before skeletal repairs were quickly effected
and some form of normalcy was restored. Till date, some sites cannot be
rebuilt as members of the host communities have resisted efforts by
telcos to carry out repairs and replacement of damaged infrastructure.
Multiple Regulation
Aside from the foregoing, 2012 was the year that most of the pre-existing challenges in the in the operating environment assumed alarming dimensions. The issue of multiple regulation, for instance, reached a stage in April when two agencies of government openly battled one another over a base transceiver stations (BTS).
Aside from the foregoing, 2012 was the year that most of the pre-existing challenges in the in the operating environment assumed alarming dimensions. The issue of multiple regulation, for instance, reached a stage in April when two agencies of government openly battled one another over a base transceiver stations (BTS).
MTN Nigeria’s base station at EFAB Estate, Mbora District, in Abuja was
shut down by the National Environmental Standards and Regulations
Enforcement Agency (NESREA) over what it called failure to meet setback
requirements.
The regulator of the industry, the Nigerian Communications Commission
(NCC) apparently was not consulted by NESREA before taking the action.
Consequently, NCC officials, with newsmen in tow, stormed the BTS to
reopen it a few days later, affirming that it met all requirements set
by the regulator for BTS.
Not to be outdone, NESREA officials with its own entourage of newsmen
returned to the site to reseal it, insisting on its right to enforce
setback requirements for BTS. While this was going on, thousands of
subscribers covered by the base station in Abuja were consigned to a
long spell of off and on telecom coverage.
While the matter was later resolved, it was a poignant reminder of the
absurd height multiple regulation and rent-seeking behaviour of
government agencies had risen to, and the adverse toll it was taking on
telecom service delivery.
Also within the same year, many operators witnessed some of the worst
wanton damage to their infrastructure by thieves, vandals and saboteurs.
In April, about 450 base transceiver stations (BTS) belonging to MTN in
the Kano, Abuja and Kaduna regions were cut off from the rest of the
network following multiple damage to the company’s extensive fibre-optic
network. The development threw many subscribers in the region out of
coverage for days before the operator could effect necessary
repairs.Again in December, MTN’s fibre-optic network was cut in at least
seven different locations namely, between Port Harcourt and Eket, Kano
and Zaria, Abuja and Akwanga, Asaba and Owerri, Ahoada and Port
Harcourt, Benin and Owo and finally, between Ikeji and Owo. All the cuts
happened within five minutes of each other.
All through the year, the company recorded an average of 70 cuts in various locations per month, with some of them reportedly manifesting uncommon coordination.
All through the year, the company recorded an average of 70 cuts in various locations per month, with some of them reportedly manifesting uncommon coordination.
Everyone Loses with Poor QoS
The simple reality is that when service difficulties prevail, telecom consumers are unable to make and receive calls as they want, and their spending on the networks is consequently limited. A subscriber who initially plans to spend 10 minutes on a discussion may end up using only three minutes due to service disruptions. Indeed, a recent study by a renowned hardware and software company, Oracle, indicated that telecom operators lose an average of $2 million (about N312m) an hour to network glitches in Nigeria.
The simple reality is that when service difficulties prevail, telecom consumers are unable to make and receive calls as they want, and their spending on the networks is consequently limited. A subscriber who initially plans to spend 10 minutes on a discussion may end up using only three minutes due to service disruptions. Indeed, a recent study by a renowned hardware and software company, Oracle, indicated that telecom operators lose an average of $2 million (about N312m) an hour to network glitches in Nigeria.
Aside from all this, operators have sunk trillion dollars of investment
into their networks in the hope that they will attract customers and
keep them to reap the dividends of their investment. However difficult
it may be to believe, the truth is that no operator would want to
jeopardise their massive investment by continuously providing poor
quality of service to its customers.
Superlative Performance as Nemesis
Perhaps because of the astounding performance of the telecommunications sector over the years, growing against all odds from a meagre 400,000 lines in 2001 to over 113 million active lines today, most people tend to see the industry as insulated from the general malaise of the Nigerian society. However, if there is to be a lasting solution to the lingering challenge of sub-optimal quality of telecom services, there is a need to put issues in perspective, so that pragmatic solutions can be obtained. Putting issues in perspective begins with recognising the huge blessings that telecommunications, and particularly, the operators have brought to Nigeria in the last 12 years or so. The meanest of critics would readily concede that telecommunications has positively impacted all aspects of the Nigerian life.
Telecoms as Golden Goose
Nearly all that Nigeria has as telecom infrastructure is the creation of the private sector, led by the ambitious GSM operators. State-owned NITEL, which was supposed to provide transmission backbone and other support infrastructure for the newly licensed operators in 2001 was incapable of doing so. Hence, the private operators had to set about creating necessary telecom infrastructure for their own use and the benefit of the country.
Perhaps because of the astounding performance of the telecommunications sector over the years, growing against all odds from a meagre 400,000 lines in 2001 to over 113 million active lines today, most people tend to see the industry as insulated from the general malaise of the Nigerian society. However, if there is to be a lasting solution to the lingering challenge of sub-optimal quality of telecom services, there is a need to put issues in perspective, so that pragmatic solutions can be obtained. Putting issues in perspective begins with recognising the huge blessings that telecommunications, and particularly, the operators have brought to Nigeria in the last 12 years or so. The meanest of critics would readily concede that telecommunications has positively impacted all aspects of the Nigerian life.
Telecoms as Golden Goose
Nearly all that Nigeria has as telecom infrastructure is the creation of the private sector, led by the ambitious GSM operators. State-owned NITEL, which was supposed to provide transmission backbone and other support infrastructure for the newly licensed operators in 2001 was incapable of doing so. Hence, the private operators had to set about creating necessary telecom infrastructure for their own use and the benefit of the country.
Today, for instance, the leading operator, MTN Nigeria has built the
most extensive and sophisticated ICT infrastructure on the African
continent here in Nigeria. International experts have acknowledged the
expansive infrastructure as the springboard of an ICT revolution in
sub-Saharan Africa.
Indeed, MTN’s network is basically a national backbone with a 9,500
kilometre fibre-optic superhighway, the most extensive private
fibre-optic network of its kind in Africa and the Middle East, and an
11,500 kilometre microwave infrastructure covering 90 percent of the
population of Nigeria. MTN alone has sunk over N1 Trillion in capital
expenditure (CAPEX) over a period of eleven years. Every year, with the
support of its shareholders, the company consistently approves more
resources to be invested in the ever absorbent Nigerian telecom
environment.
In 2012 alone, MTN committed over $1.3 billion on capital projects,
including an extensive network optimisation and swap out exercise to
replace legacy equipment and install hybrid alternative energy solutions
in its base stations.
Till date, the telecom sector remains the fastest growing sector of the
Nigerian economy and contributes more than 3.5 percent to the Gross
Domestic Product (GDP) of Nigeria.
And when the consideration is Foreign Direct Investment (FDI), the
telecom sector has clearly outperformed most other sectors in the last
11 years. Since 2001, the telecom industry has attracted in excess of
$23 billion in FDI. The sector pays huge taxes and levies into the
coffers of government. MTN Nigeria alone has paid almost N1trillion in
various taxes since 2001.
The sector has created millions of jobs directly and indirectly. The
market leader, MTN alone is responsible for a large chunk of these
figures, with over 10,000 permanent and contract staff, over 100 direct
dealers, who in turn have their own employees and about 4000 sub-dealers
with an informal chain of at least 100,000 sales outlets across the
country.
Telecom has stimulated massive economic opportunities for a
multiplicity of sectors of the economy – the financial sector,
advertising, PR, entertainment, music, fashion, broadcasting,
consultancy, among others. Telecommunications companies have opened new
vistas of opportunities for millions of Nigerians through various
capacity building initiatives, mega sponsorships, promotions and CSR.
Again, the market leader, MTN alone has invested over N7.5 billion in
social projects in the areas of health, education and economic
empowerment across the nation. Its CSR vehicle, MTN Foundation, has won
many local and international laurels since it was created in 2004.
Apart from the generic telecommunication services such as voice and
text, the sector provides the backbone for all electronic payments,
point of sale terminals (POS), and ATMs. The sector provides electronic
logistic support such as data warehousing among other business solutions
for numerous businesses. Such services as Mobile Money, Cashless
Banking, and internet banking ride on the backbone provided by the
telecom operators.
In a nutshell, it is a sector that has positively impacted all aspects
of Nigeria’s national life and by that same token, deserves careful
considerations when it seems to be falling short in certain areas.
Solutions
Operators spoken to averred that even though the industry has recorded giant leaps in the last 12 years, it still lacks the capacity to adequately meet the demand for service at the market place. With Nigeria’s huge landmass and population, the 20,000 odd base stations owned by all the major networks are grossly inadequate. MTN alone which owns a little over 12,000 base stations is involved in a very aggressive roll out initiative to grow the number of base station exponentially and wire Nigeria with fibre optics over the next few years. Again, in spite of the willingness and the availability of necessary funds, progress is slowed down by a string of factors enumerated earlier, including multiple regulation, difficulties with or outright denial of right-of-way, among others.
Operators spoken to averred that even though the industry has recorded giant leaps in the last 12 years, it still lacks the capacity to adequately meet the demand for service at the market place. With Nigeria’s huge landmass and population, the 20,000 odd base stations owned by all the major networks are grossly inadequate. MTN alone which owns a little over 12,000 base stations is involved in a very aggressive roll out initiative to grow the number of base station exponentially and wire Nigeria with fibre optics over the next few years. Again, in spite of the willingness and the availability of necessary funds, progress is slowed down by a string of factors enumerated earlier, including multiple regulation, difficulties with or outright denial of right-of-way, among others.
Industry insiders spoken to insist that if the necessary capacity is to
be achieved, stakeholders must guarantee an environment where all the
operators are able to effortlessly and aggressively build more telecom
infrastructure over many more years.
“Repeated sanctions and directives will not resolve the fundamental
problems that pose hurdles for us” said MTN Corporate Services
Executive, Akinwale Goodluck. “We appreciate the efforts of the NCC and
our Minister in tackling the root causes of poor quality of service by
quietly liaising with the relevant organs of government and lending
their voice and support to the developmental initiatives that are
enablers of growth for our industry. That is the only way we can
surmount the challenges.”
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