One of the issues trailing the operations of telecommunication industry in Nigeria is considered to be over- regulation and multiple taxations, this feature article seeks to examine issues, impacts on the quality of service, solutions and the roles the various stakeholders play in addressing the issue.
INDUSTRY OVERVIEW
There have been series of innovation and transformation in technology globally, and Nigeria has one of the major telecom markets in Africa, supported by the second largest economy on the continent after South Africa, irrespective of the current economic recession trailing
Given the potential for further growth, the sector attracts considerable foreign investment. In a few years ago, many companies in the industry have sprung up, many of them small and localized, providing various telecom and value-added services in an effectively regulated market.
Meanwhile, the growth of the Telecoms industry growing rapidly and contributing about 9.8 percent of the Nigerians GDP, according to the National Bureau of Statistics (NBS)
According to data from Nigerians Communications Commission (NCC) subscribers’ teledensity recorded an increase from 106.32 percent in May to the current 107 percent.
The total number of active GSM lines recorded an increase from 148,189, 043 in May 2016 to the current 149,179,083; while a total number of active subscribers in May rose from 148,848,158 to the current 149,818,906.
However, the four biggest telecoms company in Nigeria, MTN, Airtel, Etisalat, and Globacom have the market share of 39 percent, 21 percent, 15 percent and 24 percent respectively.
The percentage market share by technology for mobile GSM had increased from 99.1 percent in May, to 99.5 percent.
Finally, the Nigerian telecoms industry which is believed to growing bigger and richer currently records a whopping $38billion in Foreign Direct Investment.
CHALLENGES OF OVER-REGULATION AND MULTIPLE TAXATIONS
There have been great concerns amongst industry stakeholders over the issue of over-regulation because the telecoms industry is recording significant growth.
For long, regulators have been in rigorous exercises to make sure that the subscribers, government, and the operators are free of bottlenecks affecting the entire telecoms industry. However, some subscribers are of the opinion that in spite of the claim by regulators to address to some challenges in the telecoms industry, the efforts are described as one that doesn’t affect the subscribers positively.
“Who is the NCC working for? They are working for the government. They collect money from tax the operators, and we bear the brunt indirectly. We are not compensated in any form if the regulators are working, we the subscribers should be able to feel the impact positively, a reliable source close to the telecoms industry said. If they are fighting a course that wouldn’t benefit the subscribers, then that means, it’s not a just course, he added.
Sadly, one of the impacts of over-regulation on the telecom operators in Nigeria is that some of the operators are gnashing out their teeth to run its affairs in the country. Coupled with the current economic crises, telecoms operators are reducing their workforce, thereby increasing the level of unemployment rate in Nigeria.
“If there is no enabling environment created as a result of over-regulation, operators might be forced to relocate to neighboring countries. He said the industry suffers from over-regulation, and it’s affecting the operators; some these companies can’t operate anymore”, said Anthony Nwosu, Vice President, Association of Telecom Companies of Nigeria (ATCON)
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REGULATORY CONTROL AND EFFORTS TOWARDS ADDRESSING THE CHALLENGE
Currently, the industry has been rolling out measures to tackle the problem of over- regulation and multiple taxations in the telecoms industry. One of such measures is through strategic collaboration with State Governments through the Governors Forum.
The commission had understood the various challenge which the operators were going through and needed a balance in regulation and to protect both the operators and subscribers, However, the NCC took a bold step to persuade some of the Governors of state to abide by the Memorandum of Understanding that was established in 2015 in respect to the removal of multiple taxations and other bottlenecks, so as to ensure the effective functioning of the telecoms sector.
“The failure to abide by the agreement was responsible amongst others, for the deteriorating quality of telecoms services in the country, the government had continued to levy multiple taxes on telecoms operators with some of them closing base stations in their domain”, Umar Garba Danbatta Executive Vice Chairman, NCC had pointed out when he visited Kano State.
“We have achieved tremendous results in some states have reached out to some States Governors, and we are still reaching out. For instance, we were in Kaduna, and we were (NCC) happy by the situation in the state regarding the issue of multiple taxations”, Tony Ojobo, Director of Public Affairs, NCC, said in a forum organized by Nigeria Information and Communications Technology Reporters Association
He said Kaduna State Government had repealed all tax laws and enacted a new ax code which gives room for a central tax collection, adding that multiple taxes issues had been arrested by the new process.
However, the problem in Kano looks gloomy as there are infrastructural gaps and bottlenecks where the Commission is expected to intervene. “The situation in Kano is not favorable for the operators and NCC has pledged to address the issue to improve the quality of service further.
According the Executive Vice Chairman, NCC, Kano is a strategic state, as its one of the most socio-political states, a key commercial nerve centre, most vibrant in terms of investment friendliness and hospitable with huge tourism potential. “All that is needed is to develop the ICT infrastructure and leverage on it for service delivery, he said.
Meanwhile, before now, the NCC had established an Industry Working Group (IWG) on multiple taxation and regulations as contained in the 2nd Quarter 2016 Compliance Monitoring and Enforcement report posted on the commission’s website.
The report said: “As part of the strategy to address the issues of multiple taxations and regulations in the Nigerian telecommunications industry, the commission had facilitated the establishment of the IWG on many taxes and regulations.
In her views, Yetunde Akinloye, Director, Regulatory Services, NCC, the role of the NCC is a balancing role, and such task is delicate. She explained that the NCC is not there for only the subscribers or the operators, NCC is there for everybody, the operators, subscribers and the government. We have always been engaging with government and stakeholders to come and air their views on issues concerning the problems of over-regulation, and we have been achieving some milestones. Engaging with the state governments via the Governors’ Forum worth commending, she added.
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PROFFERED SOLUTIONS
In addressing the issues of over-regulation in the area of multiple taxations, embodiments rocking the industry operators, there have been strategic collaboration and alliances with various state governments. The ATCON Vice President suggested that more collaboration from NCC and the government, increased awareness, and strategic collaboration with relevant stakeholders to ensure smooth operation that would eliminate bottlenecks.
He said continuous interface by NCC between the government and operators, would go a long way to arresting the issue and improve service quality ”
Gbenga Adebayor, Chairman, the Association of Licensed Telecommunications Operators of Nigeria (ALTON), in his opening speech at the forum organized by Nigeria Information and Communications Technology Reporters Association, commended efforts to continually deepen discussions amongst industry players urging organizers to keep the ball rolling.
He said one of the solutions to addressing the issue of over-regulation and other bottlenecks is by organizing forum like this. “We are on the right track, in as much as we continually engage with relevant stakeholders to dialogue on issues as this, then we are already providing solutions”, he said.
Continuing: Tony said some sister companies are becoming too zealous by adding frictions to the operations of the regulators which affects the industry. “We are making efforts to create an enabling environment for the proper functioning of the industry, and we urge the operators to act within their limit, he concluded.