Truthfully, before the recent visit of broadband companies to the Nigeria Communications Commission (NCC) Office in Abuja, there had been countless questions on what the regulator had done to salvage the situation bordering on the inacessibility of forex by telecom operators.
The challenge posed by the inaccessibility of forex is one of the troubling issues, but the visit by these industry big players seem to be a timed bomb that is on the verge of exploding, and the perceived imminent explosion means a huge loss to the telecom industry.
For the past decade, the NCC had put extraordinary and glittering efforts in making sure that the present Nigerian telecom industry which values at over $60bn continues to grow both in revenue and teledensity.
But the industry could be from hindered from hitting it bigger this time if the lingering forex challenge is not significantly nipped in the bud.
“The industry is in a situation where all operators are finding it difficult to justify the required investment case for additional Capital Expenditure (CAPEX) for network capacity expansion to improve the quality of service to customers,” big industry players said at the visit.
During discussions with the EVC, Professor Umar Danbatta, the big industry players noted that the network Operating Expenditure (OPEX) of operations have skyrocketed in the last 15 months by over 85 percent of revenues remaining relatively flat.
Further, they lamented that they are currently struggling with meeting obligations to their suppliers particularly network vendors, tower firms and servicing loan obligations.
Besides the complaints put forth, telecom operators in Nigeria were already gnashing their teeth considering the stringent conditions attached to accessing funds from the Central Bank of Nigeria (CBN)
The situation has not only crippled the network expansion process which many telecom operators had embarked on, but it has also affected revenue models of businesses and quality of service.
Most of the infrastructure needed to drive the expansion of networks is dependent on how fast operators can import them from overseas. Alas! Nobody can import anything into Nigeria without having access to dollars.
According to Airtel Nigeria, more investments is needed toward laying of more inter-city fiber, metro fiber optic cables in building more base stations but the fact that we are in a fix when it comes to accessing forex is a major challenge we are facing as operators,”
“The issue is not even that the naira-to-dollar exchange has gone up, the problem is that of accessibility.
However, an analytical look at the current administration directly or indirectly foretells disaster for the Nigerian telecom industry. It’s quite unimaginable to see how ICT was exempted from the 36 items that are granted direct forex access by the CBN.
Unfortunately, this is a total play down on the significances and roles of technology in Nigeria, but then, telecom operators are paying the wrong price, including the average telecom consumer.
Meanwhile, the clamor in the telecom industry to lay more fibers and expand network is no longer news, because operators for long had shown willingness to do so but plagued by forex inaccessibility.
As a result of this ugly situation, some industry stakeholders have called on the federal government to prevail on the CBN to make access to foreign exchange more flexible for players in the nation’s telecoms industry.
“We are proud that we have used predominantly Nigerian labor and personnel but our equipment all come from abroad, and this entails spending tens of millions of dollars,” Managing Director, ntel, Mr. Kamar Abass told the New Telegraph in an interview.
We, as a telecom company, are not on the list of those who can access forex, so it is a real struggle to pay for these items. We need some flexibility on the part of CBN,” he added.
What has NCC done?
This is a serious question, but the truth remains that NCC did not relent in the fight against the inaccessibility of forex by telecom operators in Nigeria
“NCC is mindful of the forex challenge faced by the telcos. We have intervened with the Central Bank of Nigeria (CBN),” Professor Umar Danbatta, the Executive Vice Chairman, said during the launch of the Nigerian Telecom Consumers campaign in Lagos.
He said: “already this intervention is beginning to yield some results. We are sure that in the not too distant future, the forex challenge will be addressed to the benefit of both the consumer and the operators.”
When the year is ended, the NCC should be able to measure the success and impact of this initiative by the level of awareness created among consumers and the number of consumers that have activated the 2442 facility.
It is my hope that the Nigerian telecom consumer would consistently get the right quality experience and value for money,” the EVC concluded.
We are all involved in this industry directly or indirectly, which makes it sacrosanct for relevant stakeholders to join hands together and ensure that some of the issues are nipped in the bud, especially the issue associated with forex.