ALTON to Pantami: Only NCC can regulate telecoms - ITREALMS

ForTheRecords@ITREALMS:

The speech delivered by the chairman of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), Engr. Gbenga Adebayo during a visit to the Hon. Minister of Communications, Dr. Isa Ibrahim Pantami on Monday, October 14, 2019.

Excerpts:

Protocols

· ALTON commends the Minister on his recent appointment as Hon. Minister which is an endorsement of his performance in NITDA by President.

· We commend the Minister for proactively defining short to long terms targets for the communications sector and for championing the cause of the sector home and abroad.

· The Association Extend hand of partnership to the Hon. Minister, restating our commitment to working with government at all levels to bridge the digital divide in Nigeria and to foster inclusive economic growth.

A. National Digital Strategy

· There is no doubt that the world is experiencing rapid technology revolution. Digital technologies are reshaping traditional human activities and disrupting business models. Broadband networks are being used to transform the way people communicate, socialize, shop, travel and work, and are creating entirely new business models and markets. The reality of the world being a global village is now more evident.

· The leading global businesses such as Facebook, Apple, Google, Amazon, and Alibaba are all enabled by broadband networks. This speaks to the power of technologies in global economies. Thus, any country that overlooks the ongoing digital revolution and fails to act strategically to exploit the benefits of the digital ecosystem will lose in the long run. 

· For Nigeria, we are well-positioned to benefit from the digital revolution given our human capital potential which is our greatest asset and our burgeoning high youth population. However, what is missing is a holistic strategy that would enable Nigeria to exploit the benefits of the global digital ecosystem.

· It is, therefore, our view that Nigeria needs a holistic digital strategy that would deliver economic prosperity to its citizenry. We advocate that the strategy should address critical issues such as Broadband Infrastructural development, Digital services, finance, capacity building, and the regulatory environment.

REQUEST:

· Develop a Digital Economy Strategy in consultation with the National Economic Council. ALTON is willing to partner with the Minister to develop the Strategy.

B. Critical National Information Infrastructure

· Telecommunications infrastructure is globally acknowledged as an enabler for economic and social growth in the digital economy. The impact of telecommunications in enabling new industries and introducing significant efficiencies in education delivery, financial services delivery, health care provision, energy management, agriculture and ensuring public safety cannot be overemphasized.

· Given the role of telecommunications as a social capital overhead, damage to telecoms infrastructure or interference with same would have devastating impact on the economy and security or public safety.

· There has been an increase in vandalism of telecoms equipment by unscrupulous persons and shut down of telecom infrastructure by government agents and communities as a means of compelling operators to comply with their demands for spurious taxes or levies.

· The CyberCrimes (Prohibition, Prevention, Etc.) Act 2015 empowers the President on the advice of the National Security Adviser to designate certain networks (physical & virtual) as Critical National Information Infrastructure to protect and preserve same.

REQUEST:

· We therefore urge the Hon. Minister to facilitate the issuance of an Executive Order (EO) to designate telecom network infrastructure as Critical National Information Infrastructure in the national interest. We have a draft EO for the Hon. Minister’s adoption.

C. NITDA Frameworks

· We commend the Hon. Minister for the innovative ideas and policies introduced during his tenure as Director-General, National Information Technology Development Agency (NITDA) which are currently yielding positive benefits to the society.

· Our members are concerned about the impact of some of the recent frameworks introduced by NITDA on their operations and licence.

1. Framework and Guidelines for Public Internet Access (PIA) 2019:

Background

· The Framework sets out rules for the provision of Public Internet Access

· It permits NITDA to license a Public Internet Access Provider (PIAP) which technically is a provider of data services and prescribes minimum quality of service for such providers.

Our members' concerns are as follows:

o This framework will result in multiple regulation as two regulators (NCC/NITDA) will be overseeing the data market.

o Allowing PIAP to offer free data services is in conflict with the pricing principles for data services in the communications market as developed by the NCC and could potentially lessen competition in the data market.

REQUEST:

Direct NITDA to withdraw the framework in the overall interest of the industry

Direct NCC to develop a framework for Public Internet Access which would promote the use of data services in public places.

2. Registration of Data Centre Facilities:

Background:

NITDA wrote to some of our members in July 2019 requesting for the registration of Data Centre facilities owned by our members. According to NITDA, the registration is in furtherance of Presidential Executive Orders 003 and 005 on local content development.

Our members’ primary concern is that the directive from NITDA will result in multiple regulation of the industry as the data centers owned by our members are part of telecommunications networks that are already being regulated by the NCC.

REQUEST:

Direct NITDA to exempt licensed telecommunications operators from the registration requirement for Data Centres.

3. Nigeria Data Protection Regulation 2019:

The Nigeria Data Protection Regulation 2019 defines the rules governing the processing of data. It contains far-reaching provisions on personal data which includes communications identifiers such as IP address, IMEI number, IMSI number, SIM and Personal Identifiable Information, etc., as well as the procedure for procuring consent from customers and the transfer of data outside of Nigeria.

The Nigerian Data Protection Regulations is an innovative piece of subsidiary legislation which has placed Nigeria on the global map of nations with national data privacy and data protection legislations.

Concern:

· Complying with the provision which deals with obtaining consent from customers prior to the use of their data for our operations is an area of challenge for the industry. For example, majority of our customers are pre-paid and communication with most of the customers is via text messages. Thus, securing consent in the manner described in the Regulations (i.e. intelligible and easily accessible form, using clear and plain language) will prove difficult for the industry. It is also highly probable that some customers may not respond to the request for consent.

REQUEST:

Direct to the NITDA to collaborate with NCC to issue additional guidelines on securing consent for the telecommunications industry.

Given the volume of subscribers in the telecommunications industry and the highlighted challenge with procuring consent, we request for a compliance transition period of 1 year before full enforcement.

D. Refusal of the Federal Capital Development Authority (FCDA) to Grant Build Permit for Infrastructure Roll-Out

· The provision of first class telecoms service in the Federal Capital Territory (FCT), Abuja has been hampered by the refusal of the Federal Capital Development Authority (FCDA) to grant permits to our members to build infrastructure. Despite concerted engagement, FCDA has maintained that due to the need to maintain the Abuja Master Plan, it will not grant approval to our members to build new sites in the Federal Capital Territory, Abuja.

· Honourable Minister, ALTON respectfully states that without adequate infrastructure, the provision of qualitative telecommunications services cannot be guaranteed. We therefore respectfully invite you to use your good office to liaise with the FCDA to identify suitable locations for new sites build by our members to ensure the provision of qualitative telecoms service in FCT and environs.

REQUEST:

To have discussion with the management of FCDA on how to expand the infrastructure build in the FCT for better quality of service.

E. The Amended Taxes & Levies Order of 2015:

· The Schedule to the Taxes and Levies (Approved List for Collection) Act (Amendment) Order 2015 further engendered the institution of multiplicity of taxes across different tiers of Government which has been perennial challenge for industry. The Taxes and Levies Order of 2015 introduced additional tax items and permitted States to apply their discretion in the fixing of tax rates resulting in the imposition of arbitrary levies and charges at the State Government levels. Specifically, item 3 (b) of the Amended Schedule to the Taxes and Levies (Approved List for Collection) Act introduced new levies and taxes under items 12 – 25. Most of these taxes and levies were hitherto contested by our members on the ground that they were not applicable to telecommunications operations.

· Further, pursuant to Taxes and Levies Order of 2015, States and Local Government Councils have been enacting Internally Generated Revenue based legislations targeted at our members. We find that most of these legislations are at variance with fundamental tax principles such as neutrality and certainty. Some examples of the taxes being imposed include:

• Ecology Tax for gaseous emission.
• Sewage, Sanitation and public convenience levy for base stations
• Fumigation Levies: Some States demand for the payment of fumigation charges of Base Station.
• Sanitation and refuse effluent tax for base stations
• Business premises tax for base stations
• Tenements rates charged per base station in some states is far higher than rates per square metre charged by the same State for residential and commercial buildings when the infrastructure occupies the same land?

REQUEST:

ALTON respectfully requests the Honourable Minister to engage the Honourable Minister of Finance towards a review of the Amended Taxes and Levies Order 2015, which is not business friendly and negates the Federal Government’s Ease of Doing Business agenda.

F. Over The Top (OTT) Services in Nigeria

Increasing usage of OTT services by customers is adversely impacting on traditional telecoms platforms. According to Ovum, the independent analyst and consultancy: The growing adoption of OTT services by customers instead of traditional telecoms services will occasion global revenue loss of $386bn over a period of six years (2012 – 2018) for the traditional telecom operators, thus endangering network development.

· OTT Services in Nigeria and the Displacement Effect:

1. Data shows that voice minutes have been declining due to impact of OTT.

2. Voice Minutes has been declining while VoIP has been increasing

3. OTT Data flux has been increasing as shown with the 2016 data.

4. Telcos are losing money due to this trend.

5. Urgent action is required to save Telcos further loss due to activities of OTT players who do not invest in infrastructure.

· Comparing OTT and Mobile Network Operations

OTT Operators: offer the same services as the operators (voice, SMS, content, etc.), but are neither subject to licensing under the NCA nor have any contractual obligation with telecommunication operators in terms of interconnection.

Mobile Network Operators

Strong presence in the country, attracted over USD38bn FDI in the past 16 years. The industry is a Catalyst for telecoms infrastructural development in the country, and also a major employer of labour having created over 30,000 direct job opportunities andover 500,000 indirect job opportunities.

Telcos have paid over NGN300bn to the coffers of the Government in taxes and levies annually.

REQUEST:

Introduction of data price floor to ensure that Telcos price data profitably irrespective of activities carried out by data customers.

We recommend that OTT players to enter into agreement with Telcos for revenue share or payment of a kind of interconnect fee to Telcos.

In Conclusion:

We wish to inform and invite the Hon. Minister to the 20th Anniversary of ALTON scheduled to hold on Friday 29th November, 2019 at the MUSON Center, Onikan, Lagos.

ALTON is committed to the continued growth and development of the Nigerian Telecommunications Industry and respectfully requests that in order to save the legacy telecoms operators, measures must be put in place which will avoid distortion in the digital space in order to ensure unimpeded development of telecommunications infrastructure in the country.

*Engr. Gbenga Adebayo

October 14, 2019

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