The Nigerian Communication Commission (NCC) has hinted that its adoption of market-driven pricing regime attracted about $1 billion in form of new telecoms infrastructure investments into the country this year.
The commission’s Executive Vice Chairman, Dr Aminu Maida, who made this disclosure during an interactive chat with journalists in Lagos, said that the decision had restored investor confidence in the telecoms sector, ending several years of under-investment that were characterized by poor services, slow network expansion nationwide.
The industry regulator described the reversal to the market-driven pricing regime by the NCC as impactful on the Mobile Network Operators’ infrastructure investment, with one of the players, which had not committed any fund to infrastructure expansion in the past three years, now bracing up to deepen infrastructure assets nationwide.
The EVC recalled that when NCC issued licences for the provision of services on the fifth generation (5G) technology, the MNOs promised nationwide rollout of the services but under-estimated the huge challenges in the industry
Maida further pointed out that the recently approved 50% tariff hike for telecom services had started changing the dynamics of the sector in terms of local and foreign direct investments (FDIs) into the previously investment-strapped industry.
According to him, despite the improved investments in the sector, service quality still remains a challenge because the technologies and equipment required to enhance the services could not easily be purchased on the shelf and some of them are yet to be built by the original equipment manufacturers (OEMs).
To overcome the challenge, the EVC stressed that the MNOs would need to book, pay, ship, pay for clearing at the ports, transport to sites, install and commission before customers would start feeling the impact.
He disclosed that as of June this year, the MNOs had started taking delivery of new equipment ordered and are now planning to upgrade their facilities and construction of new sites underway, assuring that the new investments will boost capacity, improve service quality and strengthen Nigeria’s competitiveness in the global telecom space.
Maida, who admitted that installing the equipment, which has already commenced in the North Central zone and Abuja, would require some time before extending them to other parts of the country.
The EVC recalled that since the commencement of mobile telephone services rollout in the country, less than 2000 5G sites had been built nationwide due to a combination of factors, including foreign exchange (FX) constraints and difficulties in getting approvals for land to build new cell sites.
He maintained that NCC took the market-driven pricing regime in January this year to allow market forces determine service charges by operators, adding that while the TowerCos (Tower companies) had effected adjustment in their pricing the MNOs are yet to do so.
The EVC expressed optimism that service prices adjustment granted the operators would usher in a new wave of competition in the industry.
He further disclosed that the NCC was collaborating with the Office of the National Security Adviser (ONSA) to design region-specific rapid response frameworks, blending community engagement with civil defence presence in furtherance of its efforts to tackle generator theft, poor security, and local disputes.
On the issue of low local content development in the telecoms industry, the industry expert explained that as of today, only three countries, namely China, Finland and Sweden, are responsible for supply of low level software and hardware used.
Specifically, he said China supplies Huawei and ZTE; Finland supplies Nokia and Sweden supplies Ericsson.
Maida rued the challenges facing the MNOs in terms of surging service delivery costs, particularly on diesel costs in powering their generators but expressed the hope that with the Dangote Refinery operations, the costs of diesel would be reducing gradually with the attendant positive implications for lower tariffs for services in the years ahead.