• Foreign
service providers threaten to disconnect local operators
•
Stakeholders seek summit to save sector
A fresh
crisis is looming in the telecommunications sector, as foreign service
providers
and equipment suppliers have threatened to disconnect their Nigerian
counterparts over an alleged breach of agreement.
The foreign
firms are lamenting the inability of some Nigerian telecommunications operators
to honour their financial obligations in Foreign Exchange (FX) to them.If this
is not timely and adequately addressed, the about 150 million active
subscribers may encounter challenges putting a call through from Nigeria to
Europe, America and other parts of the world. It is going to be equally
difficult for the local firms to procure equipment for expansion of their
services in Nigeria and that could further lower the quality of service in the
country.
The Chairman
of the Association of Licensed Telecommunications Operators of Nigeria (ALTON),
Gbenga Adebayo, who disclosed the threat, said some of the foreign vendors had
issued a notice of disconnection of service to their Nigerian counterparts,
which could disrupt service availability with attendant negative impact on
customers’ experience any time soon.
In its
reaction, the President of the National Association of Telecommunications
Subscribers of Nigeria (NATCOMs), Chief Deolu Ogunbanjo, said the collapse of
the telecoms sector would affect virtually all other sectors of the economy,
including banking.
“I think it
is time we have a core telecoms summit where there will be the Presidency,
Central Bank of Nigeria (CBN), NCC and other stakeholders, to actually sort out
this matter. Just imagine what Etisalat is currently battling with. We don’t
want such things again. The sector should be supported to move the economy
forward,” he stated.
Adebayo was
silent on the identities of some of the operators who had issued the
disconnection notice. But The Guardian learnt that the service providers
include AT&T, T-Mobile, Orange Telecom, and some leading equipment vendors,
such as Sony, Comat and Metracom.
“There
appears to be accumulation of debts on the part of Nigerian operators, not
their fault though, but their inability to access forex,” an industry source
told The Guardian.
But when
contacted on the matter, some of the Mobile Network Operators (MNOs) explained
the challenges they face in terms of getting foreign exchange for their
operations. They were, however, silent about the threat of disconnection from
their foreign counterparts.
The industry
source said the operators might not own up to this challenge “because it is
going to be a great disservice to them as their subscribers may be panicking,
and you know what that means for the industry. But the challenge and the threat
are real,” she stated.
Explaining
the situation to The Guardian, Adebayo said: “We have international
interconnect system and some of those obligations. In this, there is a payment
cycle, in some cases 30 days and some maximum of 90 days for services to be
paid for. In most cases, due to the non-availability of foreign exchange, and
due to circumstances beyond the control of the operators, some of them are not
able to honour this within the 30 to 90 days and the implication is that if you
don’t service your obligation within a cycle of 30 days up till the maximum of
90 days, there will be an interest element accruable and there is a risk of
disconnection. Parties may not be willing to continue to provide you with
services due to your inability to fulfil your own part of the agreement.”
He stressed
that the exemption of telecommunications equipment and services from items to
be accorded priority in the allocation of forex by the CBN has adversely
impacted the industry in some major areas. The situation, according to him, has
led to increase in operating cost, unfavourable credit terms, and delay in the
implementation of network enhancement and improvement initiatives.
“In the
absence of local substitutes for their plants and machinery, the
telecommunications service providers are constrained to source forex from
interbank market at higher rates.
“Owing to
the prevailing economic situation in the country, ALTON members cannot transfer
the increased cost burden to the consumers, thereby contracting profitability
and ability to make further investment to drive growth in the industry.
“The
situation has made it very challenging for operators to honour their
obligations to foreign vendors as and when due. This has occasioned delayed
payment to equipment suppliers and other foreign vendors, who have now resorted
to imposing unfavourable payment terms on telecommunications service providers
in Nigeria. Some of the foreign vendors have issued a notice of disconnection
of service, which could disrupt service availability with attendant impact on customers’
experience.”
He said the
Etisalat crisis could be traced to a lack of industry-friendly policy that is
crucial to operational efficiency.On how this will impact the economy, Adebayo
said: “It will affect the economy because when parties go to commercial dispute
and you are being disconnected from live network, it leads to credibility
problem, which is the first one. Second is that if the disconnection notices
are enforced, there will be disconnection, congestion and poor quality of
service and these result in poor customer experience. And this directly or
indirectly affects the economy. The third part of this is the credibility
issue, because when this happens, parties lose commercial credibility and when
you sign obligation, people will start making reference that at a period, you
didn’t honour this, you didn’t honour that.”
The Director
of Public Affairs, NCC, Tony Ojobo, said he was not aware of any letter of
threat. “But there have always been interventions. Recall that NCC has met with
CBN and the industry is aware of this. The CBN has promised to prioritise forex
allocations for telecoms sector. I am not in possession of such a letter, but I
am aware that ALTON, ATCON wrote letters to the NCC for intervention, and it
was these letters that led to NCC meeting with CBN over the issue.”
According to
him, unless, those operators write to NCC officially, “we can’t respond to
third party’s letter that was not written officially to the commission. When
they are sending letters like that, they should write to NCC officially, they
can even extend it by petitioning the government directly, because foreign
exchange allocation is a national issue.” Guardian reported
Efforts to
get the CBN to respond to the matter failed, as the Acting Director of
Communications, Isaac Okorafor, did not pick repeated calls made to his line
nor responded to text messages sent to his phones.
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