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Interview: Overbearing govts scare away investors – Teniola
Mr. Olusola Teniola, National President of Association of Telecommunications Companies of Nigeria (ATCON), believes that investment in the Nigeria telecoms industry will keep declining with government policies that send out confused and mixed messages to the investing community. He also threw more light on USSD charges among other issues. He spoke with EMEKA EJERE in this interview. Excerpt:
You are the sixth national president of the Association of Telecommunications Companies of Nigeria (ATCON), an association that was 26 years by December, 2019. Looking back, will you say ATCON has been a success story?
Thank you for that question. And as you said, I’m the sixth national president of the Association of Telecommunications Companies of Nigeria – simply known as ATCON. We are an association that has 135 active members as we speak. And we have representations from the larger telcos – the mobile network operators, the towercos, hand-set providers; we have optic fibers providers; we have the ISPs, and we have representation of the value-added services. And there are others that make up the eight categories that we’ve represented over the years. In fact, there’s a new category – e-commerce.
So, when you look at the ambits of the telecoms industry since 1993 as you stated, it was formed by experts. It is still a not-for-profit organization that advocates and influences not only government policies but issues to do with regulations in the protection of more than N2.4 trillion or the equivalent of more than $70 billion worth of investment today, that’s not chicken feed. If it wasn’t for the fact of ATCON, there wouldn’t have been the libralisation of the industry by the Olusegun Obasanjo Administration.
So, the question you asked, has it been a success? We do not like to beat our own drums, but if you were to do a 360 degree feedback to those in the industry that make up our members and those outside the industry, including the media, I think over the last five years, at least, they have seen an active association that has demonstrated that its voice needs to be heard and must be heard., concerning issues to do with information, communications, telecoms and technology. So, it’s very simple that since membership has grown to a 135 active, then there is a relevance to ATCON and that is a measure of the success that this association is humbly appreciative of.
You talked about a 135 active members, which means there’re also some passive members. What makes a telecoms company eligible to be a member?
You talk about passive as if you are the custodian of an industry that has built this economy outside oil and gas. Now let me correct your mindset. Oil and gas depends on telecommunications; oil and gas is no longer a relevant industry in the Nigerian contest. We’re in the digital age. So, when you say passive, we have no passive members. We have 135 active members – those are paying members. We can’t have passive – those who’re not paying, they’re not members.
So, I want your readers to understand that the question you’re asking has bearing. The reason they joined us is because they see relevance in the message that we’re taking to government. If there was no relevance, why would they join? So, in simple terms, we’re happy that we’re supported by the 135 members because they see in the national executive council, in the secretariat a vibrant voice that speaks to the issues that are relevant to them.
Until recently, the issue of USSD (unstructured supplementary service data) was making headlines almost on daily basis. Does the suspension of end-user billing as directed by the NCC (Nigerian Communications Commission), imply that your members have accepted the cost of that service as a sunk charge?
No. Let me clarify something for your readers and yourself. Any service that is rendered by anyone, in any country (Nigeria not an exception) is not given for free, never has been and never shall be. There’s a cost associated to using the USSD off-net. What you’re describing is on-net. So, those who are aware of the terminology I’ve used know that on-net means that it’s on to the network of the service provider. If you’re using a feature phone, that feature phone communicates directly with your service provider. And anywhere in this world, because it is on-net, it is deemed to be used on the service provider’s network for free, because it doesn’t cost the service provider.
When you’re talking about off-net (third party users) and in this case something that involves the Digital Financial Services (DFS) which involves the banks in this case because, remember, there’re other sectors that are on the same platform that are not charging. So I really need you to be very specific because it is the banks that have an issue. They are third party providers in this ecosystem. We as ATCON and our members are regulated by the NCC. The directive of 23 July, 2019 under the legal determination of USSD pricing as enacted by NCA 2003 Act, which is a law, allows our members to charge for USSD, by law. In the case you’ve mentioned (you went a bit technical), you said end-user billing. That has been suspended.
However, corporate billing to the banks has not been suspended. Your reference to sunk cost is unfortunate quote and unquote. And I’m not going to answer the question directly because I don’t want to insult your readers. I’ve already told you that to third party off-net it’s not free. So how can it be a sunk cost if it’s not free? That cost determination has already been done by NCC. So, the use of that word by certain parties within the banking sector is rather unfortunate because they need to refer to why they’re not giving the service for free to their customers.
As that crisis raged, MTN alleged that other networks were charging for the USSD without notifying their subscribers. Is that true? If it is true, is it ethical?
Well, let me reinforce something. MTN hadn’t started end-user billing. They were very transparent. Under the consumer code of practice, all operators should notify the users that these are the charges that will apply in advance. The legal determination for USSD pricing was effective from the first of September, 2019. Those operators (and I don’t want to mention names) who were charging end-user billing, if they were charging from the first of September, 2019, they did nothing wrong. It was legal. MTN, remember, hadn’t because they were doing corperate billing. The issue here is that for any service, you shouldn’t be doing double billing. It’s not about the telecoms, it’s any service. There should not be double billing.
So if the banks were charging at the same time that the telcos were charging from the end-user billing, then there’s an issue because it’s double billing. So, what has emerged is that there was a breakdown in dialogue because you can’t have two people billing for the same service. So we as an industry need to improve the entrap ability and entrapable communication that we have with the banking unit to ensure that does not happen again. But, like you said, end-user billing has been suspended as you all know in the public press.
Which means we have not seen the end of the issue?
Well, you know laws are laws. You cannot make laws and then not abide by the laws. If you do that you impact investments. We have $70 billion worth of investment in this industry. It was done by private sectors. They’re not social charities or development agencies. They are private sector money, no government money. Now the issue that is at stake is that investment in telecoms has declined. It will not increase if we send out confused, mixed messages to the investing community, however much we shout that Nigeria is the best place to do business, they’ll not come. Obey laws so that it gives sanctity in the investment.
Coming from the telecoms point of view, how will you describe Nigeria’s business environment under President Muhammadu Buhari?
It has been challenging. Because the focus on compliance though as an approach also has its effects and the effects are namely these: When government seeks increased revenue because of double deficiency, then you have about 500 to 800 MDAs looking for how to gain revenue because they’re being monitored and being assessed based on the amount of revenue that they can collect. Then you have increased multiple-taxation. You have heavy regulation and oversight that not only is focused on a sectoral basis, but cross-sectoral. Then you have mixed signals coming from that same government. What do I mean by that?
On one hand you have an agency like NCC that should be having oversight on telecoms. Then you have CBN, because of its revenue capacity, now trying to overlap its regulation on the same members that are being regulated by the NCC. Those members start to get confused. And when they’re approached with different types of divergent regulations – and in some cases, their equipment are shut down, their premises are vandalized. Then, it has an impact. The message you’re sending to the investors is that you don’t care. And when the investors see that, they quietly retreat.
So, we would seek from government, a light-handed regulatory approach. We seek that government protects telecoms assets by enabling the Critical Infrastructural Bill into an Act. We seek the reduction of the multitude of taxes, which are now 39, probably going up to 40. We seek a conducive environment that assures the investors a return on investment. And, most importantly, what we seek is a listening government that will work, collaborate and partner with the private sector on the basis of respect.
Talking about protection of critical infrastructure, sometime last year, the Nigeria Civil Aviation Authority (NCAA) threatened to destroy about 7,000 masts and towers belonging to your members, citing threat to aviation safety. We haven’t seen that happen because that would be very disastrous. That means something has been done along the line. Has that issue been resolved?
You should ask the NCAA. They made a threat, they didn’t carry it out. We think that they were just looking for revenue. Because if they were serious, and they were unsafe, that’s what they said, and I’ve not spent any money to rebuild, and those towers are still standing, so what was the issue? So ask NCAA why they didn’t go through with their threat, destroying 7,000 towers. The only conclusion we can draw from that is that they are revenue-seeking.
So that’s where you are now on that?
The towers have not been destroyed. We’re happy they’ve not been destroyed. We’re very happy…
We’re also happy.
We can hope the consumers are happy because we said if they destroy it, we’re not going to rebuild. We’re not going to be intimidated by anyone in money that we’ve invested. We have to operate like a civilized society. If they want to carry out a threat and the threat is that they will destroy, government will rebuild it.
You were once reported as saying that between 20 million and 30 million Nigerian have never seen a mobile phone. That is huge. And of course business is a thing of number; what is stopping your members from tapping into this huge market that is wasting?
Well, you call it a huge market that is wasting. I call it those that are less fortunate. I see you have two mobile phones, I have two. I’m only one person. Abroad I only carry one, I don’t need two. In fact, I’ve one SIM card abroad. Here I have three SIM cards. Doesn’t that show you a problem? It shows you that the focus and considerations of our telephone services is huge in certain states and that there are unserved and underserved communities in this country that the operators have failed to reach. Telephony has been around for more than a hundred and fifty years, but on fixed lines.
In other jurisdictions, fixed line is almost in every household. In Nigeria we don’t have fixed line. Universal access is about basic communication. You need money even to buy a feature phone talk-less of a smart phone. Those communities are below poverty line. They can’t even afford to feed let alone buy a feature phone. We have 20 million to 30 million (conservative) that are in that category. However, there’re 192 market gaps where there is no infrastructure; no electricity, no water, nothing. Then it is for government to develop the infrastructure; it is for government to subsidise these services, especially when it is called universal access.
And every Nigerian citizen should have the right to telephony – basic telephony. You need to make calls. And I’m telling you right now, I’m reiterating that our findings show that 20 million to 30 million Nigerians do not have the basic right to making a voice call or tracing a voice call in 2019. It’s also going to get worse. Our population growth is at 3 per cent. Very little investment is coming into our industry. We’re growing faster than our GDP (Gross Domestic Product). You’re a very smart man, that 20 million, 30 million can be 40 million, 50 million within the next 10 years.
Let me also emphasise to your readers that no one is going to come from heaven or any foreign country and fix it. It must be Nigerians. We can complain…complain, and do whatever. Our problem will get worse if we deny and put our heads in the sand like ostriches thinking that someone is going to solve it for us. Those days have gone. So, we need to work seriously. Those that are elected at state and local government levels need to change their mindset and start to develop communities that can have access to basic voice calls and the internet. That’s a fact.
