BlogIT_Naija

Challenged by the ground-breaking market penetration of a once telecom market follower -Starcoms- Nigeria's foremost PTOs, Intercellular Nigeria and Multilinks telecommunications are alarmed and treatened by the reality of losing their monopolized and service-rationed subscriber base to their ravaging competitor.
This has necessitated the earlier partnership arrangement between Multilinks telecommunications and Telkom; now in the offing is an astonishing quest by Intercellular to re-route its weakened management channels through Sudatel, while it jettisoned ethnicity with Dangote's Alheri Engineering Ltd.

Starcoms presently enjoy an equal market share-mind with the GSM operators; this feat is not without the seemingly communist direct foreign investment by Huawei Technologies, and Indo-centric management style of the company.

Read related news: Sudatel set to buy over Intercellular (http://businessdayonline.com/Technology/1271.html)

-Dis na Naija!

-doregos.


Tributes:
BUSINESSDAY - http://businessdayonline.com

The Unit Emerges

Dear Readers,
I think it is ideal to transcribe my project diary; 'From Zero bits to Mega heros', to a different blogsite to ensure relevance of blogging ideas both in SICU Synergy Solutions Group (http://sicusynergynetwork.ning.com) and. ZDNET.co.uk. Community.

-I do appeal to your understanding; for this reason a live link of every update would exist on BlogIT_Naija.

'From Zero bits to Mega heros' actively reports on the live progress of a co-initiated and –orchestrated ideas of community capacity building for youths towards economic and self-worth empowerment, bridging the digital divide existing between underprivileged and well-read youths of Lagos Island local government area.

My position is to enliven and coordinate a youth empowerment programme mooted by the Pastoral Council of St. Patrick’s Catholic Church (Idumagbo-Lagos) with a multi-channel supportive drive for such project.

So, I’d need to identify the various resources and levels of sponsors that can associate with the project, and commit a great deal towards it.

Your advice is welcome, thank you!



Dis na Eko! -the heart of Lagos.

-doregos.

Dear Readers,
I'm sorry I couldn't keep you updated on the differential happenings of Nigeria's IT environment. Reason is my movement to startup company as a marketing officer, and this requires up-to-brink commitment.
Now that I'm quite adjusted and involved in development of a community capacity building in computer literacy, I've decided to add the above-title as a byte by byte diary addition on the project.

If you'd been involved in any kind of community project please send in advice/comments/experience on managing such to fruition or 'disintegration'.
Thanks.

Luv U all!

Special thanks to Sofi for dropping me a sweet line; I did reply but received mail failure delivery message. Please do check your email addr if it's still active.

Dis na Eko! -the heart of Lagos.

-doregos.

THIS month, August, marks the sixth anniversary of the acclaimed revolution in the Nigerian telecoms sector, after some fifty years of pursuing the shadow. During those wasted telecoms years, an estimated $6 billion was lost in the management and mismanagement of the national career, NITEL.


August is significant to Nigeria's telecoms revolution. It was in August 2001 that mobile phone operators who won licenses under the novel frequency spectrum auction introduced by the Nigerian Communications Commission, NCC, began commercial services.
In six years, we are no longer talking about GSM alone but an addition of comprehensive array of telecoms and IT services, products and services that include CDMA fixed and wireless telephony, broadband services, VOIP, ubiquitous Internet services, mobile Internet, huge fibre optics and satellite transmission systems, online banking services like Asynchronous Transfer Mode, ATM, and a host of other value added services driven by telecommunications. Today, there is no type of high tech services in any part of the world that is not available in Nigeria.
How then do we locate the conductor and driver of this train that would take President Umar Musa Yar'Adua to the expectation of many Nigerians? This is where you must permit us to apply the Nigerian Communications Commission, NCC, as the institutional indices for measuring Nigeria's telecoms success of the present and the hope of the future.
Against this background, and a deliberate attempt to be fair to history, we must trace the origin of this revolution to January 2001, when today's telecoms reformist, Mr. Ernest Ndukwe, emerged at the leadership of the NCC. A business minded telecoms expert, Ndukwe's foray into his job, was to become the forerunner to the overall economic reforms agenda of the 4th Republic.
It was atop his desk that the revolution in the sector was articulated and executed, leading to the world's most acclaimed transparent frequency auction process

Leveraging FDI with transparency
The unpredictable yield of the transparent auction in 2001, when Nigeria had some 500,000 subscribers, is today's celebration of some 40 million phone subscribers, a record that puts Nigeria in the league of the fastest growing telecoms economy of the world. This super image is complemented by inflow of foreign direct investment, FDI, of estimated $10 billion, in the sector within the past seven years while total investment in the sector now stands at some $20 billion. Suddenly, telecoms have become the hidden diamond above the skies of Nigeria, which the NCC discovered within this short period.
In terms of international relations, it must be said that the transparency that accompanied the frequency auction in Nigeria, was the first item that gave the Obasanjo administration the most tangible, if not the most significant positive international image and also forced the attention of the global community to an emerging democracy with a focus for economic reforms. After that auction, Nigeria arrived on the international telecoms stage.

Advantage of due process and courage
From reckoning, the launch of GSM services in Nigeria by August 2001, was to become the launch pad upon which the Ndukwe-led NCC have implemented participatory and robust regulatory strategies, undertaken courageous actions and decisions, with unprecedented results that have encouraged investors within and outside Nigeria to show appreciation of the potentials of the sector.
Today, the NCC is rated alongside the Central Bank of Nigeria, CBN, and NAFDAC as agencies of government where the nation can go to sleep in full confidence that positive and courageous decisions are taken as appropriate, as and at when due, and with successful results predictable.
Some have attributed the success rating of Ndukwe and his team to his business mindedness and his stickler to due process dispositions, but we must add that the forward looking Telecommunications Act 2003 also contributed to this success.
This Act, jointly sponsored by the executive and the legislature, took a holistic review of previously existing industry laws and decrees and equipped the NCC with the independent-mindedness required of today's forward looking telecoms regulator. This is where a deserved mention needs to be made of the noble parliamentary roles of such individuals like Mr. Nduka Irabor, who, then as chairman of the House Committee on Communications, worked assiduously to ensure that the law was enacted.
The Board of Commissioners of NCC, led by Alhaji Ahmed Joda, must also take a credit for this success for remaining fearless and focused by giving absolute support to the management of the Commission in making these giant strides unscathed.
It is noteworthy that the implementation strategies and actions of NCC so far, have given due attention and respect to the laws. It is with this disposition that no party which has taken the regulator to court on any issue so far, have succeeded.
Flowing from these predictable regulatory actions, investors do not loose sleep to partake in the sector as entry processes are smoothened, with each licensing process publicly undertaken. Those who have attempted to flout due processes at the NCC in matters of license acquisition have not had good stories to tell. The case of NIGCOMSAT is exemplary, and President Yar'Adua, in his latest directive for immediate privatisation of NIGCOMSAT, with application of due process have amply demonstrated that he is on top of developments in the telecommunications sector and the due process have contributed immensely to its growth till date and hope for the future.

Harvesting gains of regulatory efficiency
In contributing to national economic growth, researchers and economists would have an uphill task in making accurate assessment of how direct and indirect employment that has been generated in the sector since 2001, have impacted on the Nigerian macro economy within the past six years.
Nonetheless, it really needs no economic wizardry to see how this has benefited the Nigerian skilled and unskilled labour force.
With these, one would rightly say that all that is needed by government is the consolidation of the immediate past and present gains, as the regulator has already bequeathed a solid telecommunications base for growth.
It also needs to be added that with the present NCC, government can boast of being atop all aspects of telecommunications development.
In that direction, even this government has become an immediate beneficiary and witness of the stability and efficiency that has attended the management of the nation's telecoms resource with the recent successful frequency sale for 3G licenses awarded in June 2007 to four operators, MTN, Celtel, Globacom and Alhieri Engineering with each paying $150 million for a slice of the national spectrum. The total amount of $600 million realised from this sale is only $150 million less than the amount realised on the combined sale of 51per cent of NITEL and Mtel.
Shortly before then, in January 2007, Mubadala, a United Arab Emirate company, has paid $400 million for a slot of a GSM license which other operators paid $285 million in 2001. This payment is very significant as it points to the increasing investor value of the Nigerian telecoms market where operators paid $285 million in 2001 for the same license that the nation realised $400 million in 2007. Ordinarily, many would expect that that license would come under $200 million given that some other operators are already more than six years old in the same market.
Before 2001, Nigerian banks had nothing to do with telecommunications and telecoms investment portfolios, but since the regulatory environment opened a new vista of business where transparency and stability are assured, none of the banks can do without a telecoms desk with some partaking in huge funding of many private telecoms projects. Revenues from telecoms business have become one of the major sources of survival for banks as they also compete to introduce telecoms driven products and services in Nigeria.
In a way, Nigerians can now take telephone services for granted and can leave one service provider for another within a space of minutes.
Today, 40 million people can communicate with each other and many more can enjoy the simplicity of getting connected in matter of minutes. Naturally this simplified experience has wiped away the ugly memories of our past when with under 500,000 lines for 140 million population, it takes years to own a phone and many hours to get a call through to some locations across the country.
Happily, the creativity and efficiency that led us to this experience, is now being exported to other African countries and it would be commendable that Nigeria is bequeathing this to Africa at this time.

Critical quality of service issues
The issue of quality of service of GSM services has become critical that the regulator has accepted it is unacceptable. The operator understands this and the subscriber is angry, but everyone understands that this matter is temporal and has only one key solution: encouraging operators to spend more money to expand their networks.
While we need not dwell on the overstretched issues, or join issues with those who genuinely attest to the failing quality of services by appreciating its inevitability in the complex network, we nonetheless, appreciate the fact that this solvable issue must not be allowed to downplay or overshadow the overall gains in a multi/network in which GSM is a part.
If we take a peep into the general telecoms regulatory management which involves management of multiple operators, deploying multiple networks, delivering different types of services in a vast geographical spread like Nigeria, then we can understand why many commentators believe that the Nigerian regulator has matured beyond expectations. This may be the reason why several African countries are dispatching their personnel to Nigeria to learn some few lessons.
Winning investor's confidence
Another side to this which has been the bane of many telecoms regulation is the ability to win the confidence of telecoms investors by share dexterity in managing regulations that determine their success or failure.
Usually, operators and investors, with huge stakes, are always at daggers drawn with the regulator, whose commission or omission in handling industry issues may either lead to wanton loss or good returns on capital intensive investments. This is why the regulator must gain the confidence of the operators and investors if it is forward looking and has the objective of attracting more investment. The NCC has so far exhibited appreciable dexterity in handling this balancing act without compromising its status. This is how we can explain the latest acquisition of 75 per cent of a local fixed wireless operator, Multilinks Telecoms Ltd, by a global player, Telkom South Africa, for some staggering $280 million.
With the mobile phone handset marketing valued at some $10 billion, Nigeria has become a target market by many phone makers. None of the global equipment vendors can ignore the Nigerian market any longer as the market continues to grow in leaps and bounds. The long distance transmission market is already beginning to generate another business with the emphasis being given to the sector to improve quality of service that is confronting the industry. It is, therefore, not surprising that the gauge of the average investor, whether within or outside Nigeria, is that Nigeria is the next investment destination as far as telecoms is concerned.

Managing the tariff war
Sometimes, the major challenge to the regulator is how to balance the interests of the investors and that of the public whose only wish is continuous reduction of tariffs, no matter how it is achieved. It is the regulator's burden to ensure investments are sustained, to win the confidence of the investors and at the same time protect the subscribers from operator exploitation. This is another delicate balancing act where NCC also deserves kudos. This assertion may not go down well with the uninitiated, some of whom have charged NCC to decree prices to the operators. But to those who understand, it is a complex business decision, where many variables come into play, at the end of which there may be no winners except the future sustainability of the industry. This was simply demonstrated when one of the operators, Celtel offered free calls at weekends, which led to massive congestion leading to some subscribers begging the company to stop the free calls as they are ready to pay if only their calls can go through. It was one accident, but a lesson that in telecoms, pricing decisions may not be as simple.
Let's take a close look at the price management mechanism. In the past six years, interconnect rates between the operators have become the valve with which the NCC have approached the issue of tariffs while allowing market forces to locate the final price.
The operators have at each point resisted NCC actions, but have apparently bowed to the firm's regulation. Many subscribers do not know how these actions actually force the operators to reduce tariffs. For instance, the regulator had adjusted interconnection rates twice in the mobile telephony sector. This has led to the current rates of N11.32K per minute uniform rates, down from about N18.50K. Consequently, interconnection, being the rates at which operators exchange traffic, has forced operators into a competition of sorts with subscriber rates coming down from some N50 per minute at launch of GSM in 2001 to about N19 per minute in some service category in GSM networks and N15 per minute in CDMA networks. In line with predictable regulations, another round of adjustment is expected in 2008.
Surely, if the retail rates are not yet satisfactory until it hits the N10 per minute rate, then the cost of SMS, which has hit N5 per minute in many networks, down from N15 about 2001, with many freely coming as bonuses has confirmed the telecoms industry as the only one with only a downward trend in tariffs as a result of more competition and more choices.
The situation is manifest for international call charges which hovered at average N150 per minute in 2001 but have come as cheap as N12 per minute in some CDMA networks. Some GSM operators offer international calls to some countries at about 58k per second.
A win for rural telecoms?

Perhaps, the greatest tool in the hands of government, which needs more encouragement, is the ongoing development-oriented citizen's empowerment initiatives by the Commission, like the Universal Service Provision Fund, USPF, and Wire Nigeria (WIN) project. Both projects are complementary, while partnering the private sector in taking telephony and IT-based services to rural and underserved communities. The WIN project has additional value in providing backbone telecommunications infrastructure to the Nigerian rural communities, to address the tasking quality of service issues and ensure adequate communications between the rural and urban communities. The current models applied in the implementation of these two programmes appear to be watertight with investors, who logically shy away from investing in rural areas because of its slow and low return on investments, accepting the carrots being dangled by the NCC.
This is one area that would need a full focus because it has unquantifiable multiplier effect, and it would do this government a lot of good to lay a claim to the profound turnaround of rural communications, which these projects would bring.

Conclusion
Applying a holistic view, it would be concluded that a regulatory stability that provides robust backbone for growth, an efficient management of the national scarce resource called frequency spectrum and a regulatory process that have won the heart and confidence of investors, are some of the crucial gifts that the current NCC is bringing to the table of Yar'Adua's government. How the government manages and sustains these gains would be subject of history in the future.


-Dis na Naija!

-doregos.



Tributes:
The Guardian - http://www.guardiannewsngr.com

Opening vignette:
Claims and counter claims have continued to hallmark the desire of Nigeria Communications Satellite Company Limited (NIGCOMSAT) to wrest a last mile service provider license from the Nigerian Communications Commission (NCC). Unfortunately, the national policy on telecommunications and the regulatory body sanctioned with licensing, numbering and related activities repudiate the unilateral approval of the ex-military dictator president licensing such services contrarily to due process.

Modus operandi:
A last mile service provider is a term for operators that offer telecommunications services directly to end users – the subscribing public. Indeed, a last mile service provider passes for a retail service provider because of domestication of such services and offering it to members of the public. But by the status setting up the NIGCOMSAT especially in the Articles of Association and Memorandum of Understanding (MoU), it is to serve as a wholesale service provider of satellite communications by selling or offering for sale to other telecommunications service providers such services as; transponders or space segment, to enable such beneficiary service providers carry and transmit their traffic from one point to another – NIGCOMSAT is likened to a carrier’s carrier.

NIGCOMSAT’s case:
The management of NIGCOMSAT led by Dr. Ajayi Borofice lays claims to a May 5, 2007 letter by former President Olusegun Obasanjo endorsing a last mile license for it which the NCC says it is not aware of such development.
NIGCOMSAT launched Nigeria’s first satellite into space early in the year in China; the Chinese government as loan to Nigeria wholly funded the cost of the project put at about $400 million.
NIGCOMSAT’s quest for last mile service is to enable it quickly recoup the money by selling telecom services to subscribing public at about N10 (7 cents) per minute call irrespective of the networks.

The argument ensues:
In paid newspaper advertorial recently, titled: “Setting the records straight: Irrefutable facts of the dispute between NIGCOMSAT and NCC” states,
“On May 5, 2007 Mr. President approved specific spectrum allocation to NIGCOMSAT Limited and total frequency license for any telecommunications services NIGCOMSAT may wish to offer.”
The advert further states, “it is germane to state that under the extant regulations, NIGCOMSAT as government owned company, is required to apply to the Federal Government through the Ministry of Information and Communications or the president for spectrum allocation and not to the NCC.”
NIGCOMSAT states further that since the decision has been communicated to the NCC, it (NCC) ought to have complied by allocating the said frequency spectrum to it.

But NCC says after its board rose from a meeting recently that it is not aware of such directives. The NCC statement signed by Mr. Dave Imoko states among others:
“Having deliberated on the said publication by NIGCOMSAT in some national dailies, the board will not wish to join issues with NIGCOMSAT or any other government agencies on the pages of newspapers.”
It adds, “It is however important to clarify the commission’s position and put into proper perspective the salient issues in this case.”

- in the said publication, NIGCOMSAT had stated that they had applied for the use of certain frequencies and licenses to enable them provide fixed, mobile and last mile services. It is pertinent to note that with the approval of the Federal Executive healthy competition among licensed telecoms operators may be unduly rocked; therefore government should restrict itself to policy and regulation.
Furthermore, the NTP (National Telecommunications Policy) clearly recognizes the imperative of competition and states thus:
“The Federal Government of Nigeria will actively liberalize the telecommunications market and encourage the participation of the private sector at all levels. Accordingly, the Nigerian Communications Commission (NCC) will be charged with the responsibility of issuing licenses to all telecommunications operators, assignment of frequencies and numbering, and establishing and enforcing regulations that ensure fair and equitable competitive practices among all telecommunications operators.”

Defense’s citation:
The commission is empowered by the Nigerian Communications Act to implement the National Telecommunications Policy and government’s general policies on communications. States section 4(1)(t) of the act:
(t) Implementation of the government’s general policies on communications industry and the execution of all such other functions and responsibilities as are given to the commission under this Act or are incidental or related thereto.
The NCC is therefore clearly charged by the policy and the law to issue licenses to all operators and service providers in Nigeria. This is why NITEL/M-TEL were licensed by the NCC and the two organizations also paid in full for their GSM frequencies and other licenses just like every other operator even when they were fully owned by government.

Closing statement
It is therefore in view of this clear understanding of both the provisions of the policy and the law that government did not consider it improper for the NCC to be represented on the board of NIGCOMSAT. It is obvious that government clearly did not intend NIGCOMSAT to be a fixed or mobile telecommunications service provider that will be in competition with other such licensees.
The commission has a duty to ensure a level playing field for all operators in line with the Act and international best practice.
Finally, the commission is committed to the attainment of a robust, efficient, ubiquitous and high quality national network and will continue to provide the necessary regulatory oversight that will guarantee the attainment of this goal in the nearest future.

Addendum
Recently, a special committee of the Science and Technology Ministry reviewed agencies under its portfolio (NIGCOMSAT is an agency of Science and Technology Ministry) rose with a decision forwarded to the Presidency, “NIGCOMSAT currently brokered by the Nigerian Airspace Research Development Agency (NASRDA) should be privatized because delivery of telecommunications services to end-users is outside its (NIGCOMSAT) mandate.

According to the report by the peer review committee, “the panel does not find any relevance between the mandate of NASRDA and the activities of NIGCOMSAT with respect to telecoms service delivery to subscribers.”
While calling on the government to review its stakes in companies, the committee which was set up by former Science and Technology Minister, Prof. Turner Isoun frowned at the stance of NIGCOMSAT for portraying Mr. Ernest Ndukwe, NCC chief executive as the clog in its wheel of progress.
The panel’s recommendation may put a smile on the faces of critics of NIGCOMSAT in its quest for a last mile license to provide services. Many operators have openly or secretly criticized the company that if the NCC bent to the alleged blackmail of NIGCOMSAT, it will encourage anti-competition in the sector.
President, Association of Telecoms Companies in Nigeria (ATCON), Dr. Emmanuel Ehuwem explained that it was an anathema for government to set up another telecom service provider of its own while it is privatizing others.
“Indeed, I think NIGCOMSAT should put its acts together, gain more experience in satellite business before venturing into an area for which it has none or little expertise.”
For Gbenga Adebayo, president, Association of Licensed Telecom Operators of Nigeria (ALTON), “it is against the grain of efforts to let government leave business to those who know how to do business.”
(Adapted from the Guardian newspaper - August 8, 2007)

-Dis na Naija!

-doregos.


Tributes:
The Guardian - http://www.ngrguardiannews.com