DEVALUED NAIRA: Telecoms Services, Product May Cost More

AS mixed reactions trail the devaluation of the Naira last Tuesday, the ICT sector, a money spinner is tipped to experience some hiccups when some key elements in the industry play, and the results suggests a possible increase in cost of services and devices, writes Isaiah Erhiawarien.

Reactions from stakeholders in the ICT industry suggestions that Nigerians may need to pay for telecoms services next year when the effect of the devalued Naira begins to affect   the economy.

Last Tuesday, the Naira was devalued by the Central Bank of Nigeria, CBN, by N13, from N155 to N168 to one dollar in order to strengthen the economy. The implication is that while more Naira will be need to buy dollar for import, local goods that are produced using imported raw materials will become expensive meaning that if earnings from income of Nigerians do not increase, they have to look more sources of income to survive.

Following the telecoms revolution over a decade ago, which kicked the national economy into a new dimension; the economy and the life of Nigerians now depend heavily on telecoms, and more recently the mobile money bug which is gradually eating deeper into social and economic fabric of national life.

Investigations show that the economy is now heavily depending on telecoms infrastructure such as telecoms mast and devices such as phones, tablets, PCs, POS gadgets as well as recharge cards.

In the last ten years, since the explosion of the telecoms growth, which is widely celebrated at telecoms forum, no efforts so far has been made to produce the devices locally, with exception of the recharge card.

For instance, the telecoms infrastructure companies, most them which are foreign required huge dollar to import every materials that they need to build telecoms mast, a very critical infrastructure for the effective delivery of telecoms services.

Recent development indicated that the mobile telephone operators opted for infrastructure sharing due to the high cost deployment of telecoms mast across the country to meet the growing depending of expanding subscriber’s base that all operators are experiencing.

Investigations revealed that telecoms operators in Nigeria currently have close 30, 000 base stations or telecom towers scattered all over the country which are build by local and foreign companies with materials that are imported a huge cost and high customers charges, and some cases the foreign companies have expatriate that are paid in dollars.

Speaking the National Mirror, the President of the Association Telecommunications Companies of Nigeria, ATCON, Engr. Lanre Ajayi said that the cost of the procurement of telecoms equipment and delivery of services by the telecos will go up saying that the impact of the increased cost will eventually be transferred to the final consumer.

His fears borders on the fact the telecoms industry is largely depended on import, even including personals. For instance, there are call centres that are currently owned by foreigners.

Reacting to the new Naira devaluation policy, a recharge card dealer, Biodun Ishola  noted that some may take advantage of the new policy to add a few kobo to it saying that presently some sellers are adding N10.00 to even the value of the N100, 200, even N500 denomination card.

Ishola who also runs a blog: http://rechargecardsmillionaires.blogspot.com/ aid that the virtual top may for sometime make it impossible for those who trade on the virtual platform to add money to it.

He dismissed fears about the possibility of the new CBN policy affecting the unit cost of producing a recharge card stating that if it does affect it will be so minimal not to necessitate an increase in the price of the airtime voucher.

Although it is not yet clear if operators may want to make a case for tariff increase bearing in mind the current trend at the nations seaport as well as the increasing electricity power failure across the country, which has made operators to be investing huge money in other power source, it is however remains unclear if the regulatory body, the Nigerian Communications Commission will grant such request.

The operators and the NCC as at the time of writing report are yet to make statement on how the new policy will affect their businesses.

However, the President of the Nigerian Internet Group, NIG, Engr. Bayo Banjo said that there will be a sense of insecurity of investment from investors adding that they will be nervous in bringing their fund into the economy.

He however said that the operators may not feel much of the impact of the devaluation of the Naira on their equipment since what they sell is services.

The telecos has however of recent been experiencing dwindling returns on their investment thereby resulting to the sale of towers by operators.

Last week, Airtel signed an agreement to sell 4,000 of its towers to American Tower Company, ATC so as to    Etisalat Nigeria has also sold  2,136 of its towers to IHS Holding Limited and MTN Nigeria is also in the league of tower seller with its figure standing at about 9,183.

A major reason for this is huge cost building and managing these towers.

Statistics indicated that the cost of building one mobile phone tower in Nigeria is about $150,000-$200,000.

 The telecoms industry has for long been groaning under the huge burden of the increasing cost of doing business in Nigeria.

For instance, in a memorandum submitted by ATCON to the Senate House Committee on Communication, the association highlighted that the industry was yet find a conducive ground to operate.

ATCON in the MO expressed surprise that the destruction of telecoms infrastructure remains a regular occurrence for all telecomm operators in Nigeria adding that  it costs about N24, 750,000 to install a single base station together with its tower, special antennas and two generators to power the station.

On power, ATCON laments that over N5 billion spent monthly by operators on power generation could be reinvested in further coverage expansion to address the congestion on the network which resulted to poor quality of service.

More worrisome, ATCON observed is the heavy taxes imposed on telecom companies at the federal, state and local government levels have placed major obstacles, which slows down network expansion thereby compromising quality of service.

Association noted that another problem in the industry is the challenge of conflict of roles and responsibilities amongst government adding that it has become a common phenomenon in the Nigerian Telecom Industry as there are overlapping and duplications of duties by federal and state agencies.

Reacting to the new policy, Africa's largest telecoms operator, MTN, put a positive gloss on the devaluation of the naira, saying the weaker Nigerian currency would also reduce costs in its biggest African market.

MTN is one of many South African companies tapping Africa's largest economy and most populous market.

In statement, MTN declined to quantify the impact on its revenues of the devaluation, which was triggered by a sharply weaker interbank naira rate over the last two months. However, it noted that the currency movement would also reduce its costs.

"We endeavour to have as large a portion as possible of our costs in each operation denominated in local currency, which would in turn offer some protection against the currency movement," it said in a statement.

National ID Card Scheme Gets Positive Reception

FOR several years there had been the quest to have a comprehensive national identity data base. But when due to the failure of past national identity card project, when NIMC’s national electronic identity card project began it was taunted be a failure, however investigation reveals otherwise writes Isaiah Erhiawarien

 Contrary to formed opinion and perception about the ongoing registration of Nigerians for the national electronic identity card (e-ID Card) scheme, that most Nigerians will be evasive of the exercise, investigations revealed that citizens are so much eager to get their biometric data capture so as to own it come 2015 when it will be issued.

The quest for a form of national identity, besides the conventional international travel passport began when General Olusegun Obasanjo (rtd) as military Head of State established the Department of National Civic Registration, DNCR, through Decree 51 of 1979.

Unfortunately, on return to civil rule in 1979, the Shehu Shagari administration, stalled the implementation of the project but 20 years after Obasanjo returned as civilian president, brought the project out of national archive and began the registration Nigerians who were 18 years and above on  February 18, 2003.

The project seemed to have kicked off effectively and albeit on a sound note so that about 60 million Nigerians were registered unfortunately a very good number of them were not given the card.

Sadly again, the project suffered another defeat, this time under a civilian government of the Yar’Adua administration. The government suspended the project saying that it wants integrate several identity schemes into one effective and functional National Identity Management System (NIMs) under its social and economic reforms.

According to a working document by the presidential implementation committee on NIMS, a "reliable system of unique authenticating and verifying the identity of every Nigerian and expatriate, boost national security through efficient and reliable identity authentication, promote consumer credit and minimise fraud."

The committee, which was headed by the Secretary to the Government of the Federation, SGF, Ambassador Babagana Kingibe, said that there was the need for the development of an identity management system for the country.

 'When the committee began to work several issues came up, which bothers on the need to have a centralised national identity database or a system of national identity management that efficiently link the private sector identity schemes with that of the government.'

The submission of the committee was that there should be a pool of data for the nation, which can also serve the needs of other government agencies like the  National Pension Commission, PENCOM, National Health Insurance Scheme, NHIS, Federal Road Safety Commission, FRSC, National Population Commission, NPC, Nigerian Immigration Services, NIS, DNCR and the Independent National Electoral Commission, INEC, and the result will be an identification schemes and data bases for the nation that is well integrated.

It was however speculated that government will established an agency or commission to tackle the task of creating a data of all Nigerians, and the National Identity Management Commission, NIMC was given birth but the antecedents of the project almost stalled the dream of NIMC.

For instance, the scandal and sleaze over the award of the project to Sagem, a French company for N38 billion ($214) and the fact that a huge chunk of the valid 42 million could not get their identity cards made many to doubt the sincerity of government on the project.

But that perception has since dropped as investigation by the National Mirror showed that Nigerians are more eager to get registered.

When the Lagos office of NIMC was visited, scores of people including the aged and young Nigerians were on queue waiting to get captured by enrolment officials of NIMC.

 According to the Assistant General Manager, Lagos office at Alausa, Mrs. Titilola Ejiofor there are 25 centres in Lagos state where registration goes on Monday to Saturday saying that on the average on daily basis about 400 Nigerians are captured into the data base of the Commission.

She disclosed that it does not caused money to register at any of the centres adding that if a person decides to go to cyber café to do the online registration, he or she will be billed by the cyber café operator for using their facility.

She explained that government is not asking anyone to pay before their biometrics will be captured into the data base of NIMC adding that there are using their internet facility to register people but they are not government officials or staff of NIMC.

According to her, there are two methods of registration either the individual registers online and print out the registration and then go to any of the centres in Lagos or any part of the country where his biometrics will be captured.

The other method is to go to any of the centres, where a full registration that also involves online will be done for the individual by the enrolment officers before capturing the biometrics.

Explaining further, she said that at the centre, the height, fingerprint and face of the individual will be captured as well as their signature saying that there after temporary sheet that contains the individuals National Identity Number, NIN.

Ejiofor advised that for those who want to use it as a travel identity not to laminate the document saying that embassies do not accept laminated travel documents.

 Another significant reason for the massive embrace of the scheme is the development in the economy, which currently makes it leach technology, particularly the card money technology.

 For instance, the new national identity comes with a chip which makes it possible for it to be use for financial transactions.

 Already, the federal government has secured global certification for the electronic national identity card, e-ID through the National Identity Management Commission, NIMC.

NIMC got the certification for its facilities, which produces the e-ID from the Global Vendors Certification Programme (GVCP) by MasterCard.
The facility that was certified is the Card Personalisation Bureau which is where the National e-ID Cards are personalised and made ready for distribution and subsequent activation.

Deputy Director, Corporate Communications, NIMC, Mr. Abdulhamid Umar said the certification followed conscious effort by the management of the NIMC, which led to the refitting, retooling and upgrading of the card printing facility that was built by government under the previous scheme in compliance with some of the requirements and standards for security and operational procedure in the plastic card industry as set by the EMV, PCI DSS globally for such High Security Areas (HSAs).

Grave Pitfalls Stare FG’s ICT Top Earner Quest

AS THE global economy moves towards economy that is largely driven by technology, more countries seem to tour that line, and Nigeria too but are there pitfalls, it must avoid, writes Isaiah Erhiawarien

Government plans to make the ICT sector top earner for the economy on or before 2020, however obvious observations indicated that there are pitfalls that may make that projection a mirage.

 The general perception in the economy is that technology is the key driver for economic and social development, and it should be adopted to facilitate growth in key sectors of Nigeria’s economy.

The minister of communication technology, Mrs. Omobola Johnson had several forum stated the position of government on that which indeed confirm that government foresees ICT as a major driver of the economy considering the unsteady price of oil in the global market.

Speaking recently, she said: "We believe that ICT has the greatest potential to eclipse oil and gas as the core source of national income, if not the most reliable, contributing the maximum possible percentage of income to the country."

She added: "We know that the few agencies under the ministry of communication technology working closely together can certainly deliver on the ICT mandate of the country."

According to her, "The ministry is committed to ensuring that ICT is leveraged to enhance and facilitate the transformational development of Nigeria in critical sectors of the economy such as power, health, education, agriculture, interior to enable inclusive development, job creation, transparency of governance and economic growth."

Also statistics from the Nigerian Communications Commission, NCC, revealed that the telecoms industry contributes 8.5 per cent to the country's GDP a far cry from what it takes to run the economy and get it from the hand of the oil and gas sector.

The government is also banking on major broadband projects in the country, which are expected to be completed this year, as a way of driving the ICT.

Indeed, the president had given a specific mandate that the broadband projects, which are poised to usher a high speed internet regime in the country, must be completed this year.

According to her, sectors such as education, agriculture, commerce, health, government services, entertainment, security, among others, are expected to be revolutionised using high-speed internet.

Her confidence is also based on what she described as ‘revolution’ that  would be driven within the scope of the 2.3GHz licensing process, which is planned to open up high speed internet services for users.

 “There is a wide range of e-government services, which need to be introduced as soon as possible. These include issuing the national identity cards, driving licences and registration of companies, among many others. In order to introduce these services, individual departments require high-speed internet access; so, from government quarters, there is a large latent demand for broadband access service from providers. So we are committed to seeing the success of the new broadband plan to be spearheaded by the spectrum sales,” Johnson said.

She said government is targeting the transformation of key sectors of the economy under the broadband regime, which is has taken off.

However, investigation revealed that if government did not address some fundamental issues such as power, the activities of the insurgents like Boko Haram and proposed plan by the National Assemble to compel private companies to be listed on the Nigeria Stock Exchange, NSE may just be some pitfalls waiting to truncate oil and gas to ICT initiative.

For instance, most of the telecoms firms have withdrawn their staff from North Central Nigeria, heart of the battle ground of Boko Haram. The reason is that the base stations of the mobile operators have been blown up by the insurgents thereby forcing the operators to close shop there.

Investigation revealed that over 150 base stations have been shut down by the insurgents resulting not only to failed network operation but the withdrawal of staff.

It was also gathered that the attack by the insurgents on telecoms facility is not limited to base stations but Mobile Switching Centres, MSC have in one or several cases been their target.

The MSC allows for connection between the calls coming from the mobile phones to the network that the caller wants to call. So, if there are no MSC calls will not even go through.

Current trend of the sale of towers by the operators to tower owners, who may not have the fund to move to areas where the insurgents are in firm control, may just be another pitfall waiting to truncate the oil and gas to ICT revenue earner for government, and that include the fact that operators are unwilling put the damaged base stations back to use as a result of fragile security situation in the states.

 Early during the week, Airtel Nigeria announced that it has gone into agreement to sell 4,800 mobile towers to American Tower Corporation (AMT) in a leaseback transaction American by its parent company, Bharti Airtel Ltd, India’s largest mobile-phone carrier.

Airtel, which initially had about 15,000 mobile towers, had in September sold about 3,500 telecom towers in Africa to Eaton Towers.

Etisalat Nigeria recently sold 2,136 towers to IHS making the operator the first of the three major GSM operators to sell towers. The financial terms of the deal was said to have cost IHS at around US$400m.

Also MTN Nigeria has signed an agreement with IHS Holdings for the transfer of its towers business, comprising 9,151 mobile network towers, to the latter.

The transaction, just like as it was in the case of Airtel is expected to reduce MTN Nigeria’s operating costs; drives network efficiencies and further expand MTN's voice and data capacity.

A recent forcast by TowerXchange, a company that studies tower business across countries said that by the end of 2014, about 84 per cent of Nigeria’s towers will be owned or operated by independent towercos, with only Glo retaining their towers.

Group Chairman at Programos Software Limited, Mr. Emmanuel Amos said that there are obvious signs that quest for the ICT sector to be the major earner for the economy come 2020 is being threatened.

He told National Mirror that for ICT to be a major earner for the country, education in the country must be  IT - ENABLED noting that service capacities must be promoted from tertiary education levels.

Amos stressed that power availability and general resource center such as smart villages and infrastructure that will boost entrepreneurs’ achievements should be place on the front burner of government’s programmes.

He disclosed that so far, the industry is yet to get the needed encouragement from government stressing that government must ensure the adoption of post-2015 strategies as well as policies that would promote sustainable development goals agenda of the UN.

He however, noted that the recent debate by the National Assembly to making listing of private companies on the Nigerian Stock Exchange was not an entirely bad idea.

Amos explained that making it mandatory will ensure that companies benefit from the corporate governance rating system of the Stock Exchange adding that “In another light, investors will be protected.”