Broadband companies- Tier II telecoms operators have urged the Nigerian Communications Commission (NCC) to save the industry from imminent collapse. They also warned that factors crippling their operations could also derail the National Broadband Plan (NBP) of the federal government, if not addressed.
The operators made this known when they visited Prof. Umar Garba Danbatta, executive vice chairman of the NCC, in Abuja recently. The operators therefore asked the NCC, to take immediate and decisive steps to avert the looming threat of strangulation, which its members currently face.
In the delegation were t, Mr. Godfrey Efeurhobo, managing director, Smile Communications; David Venn, managing director, Spectranet; Mr. Osondu Nwokoro, director Regulatory and External Affairs of nTel; and Mr. Chuma Okoye, chief commercial officer, Swift Networks,.
They warned the regulator of a looming systemic industry failure which will have catastrophic effect on the socio-economic development of the country.According to them, 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 quality of service to customers.
They further noted that the network operating expenditure (opex) of operations have sky rocketed in the last 15 months by over 85 per cent with revenues remaining relatively flat. Most operators, they lamented, are currently struggling with meeting obligations to their suppliers particularly network vendors, tower firms and servicing loan obligations.
This worrisome trend, they noted, extend to even some of the Tier I Operators. According to them, a storm is raging in the industry which if unchecked, will result in the collapse of key players in the industry.
“This is because the domino effect of bankruptcy of any of the Tier I or Tier II Operators on the entire ecosystem particularly, banking, employment, corporate and SMEs constitutes a major threat to the Economic Recovery and Growth Plan (ERGP) of the current administration.
Such bankruptcy and consequent collapse will also substantially lessen competition with its attendant deleterious impact on consumer choice and attainment of the Broadband objectives of the country,” they warned in a statement.
The CEOs stated that the NCC’s declaration of 2017 as the Year of the Telecoms Consumer can be derailed by failure of operators to deliver on the expected quality of service particularly on data throughput and experience due to the weak investment case to support additional capex as a result of deteriorating market conditions.