Broadband operators list threats to FG's broadband plans - Trends and Politics

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Wednesday, 31 May 2017

Broadband operators list threats to FG's broadband plans

Broadband service providers in Nigeria have warned that the broadband plan of the Federal Government may be derailed unless the difficulties threatening to cripple their operations are addressed immediately by the government.
The operators made up of broadband companies in Nigeria have asked the Nigerian Communications Commission, NCC, to take immediate and decisive steps to avert the looming threat of strangulation facing its members.
The leaders of the operators while making call during a visit to the Executive Vice Chairman of the NCC, Prof. Umar Garba Danbatta in his office in Abuja noted that the industry is in a situation where all operators are finding it difficult to justify the required investment case for additional CAPEX for network capacity expansion to improve quality of service to customers.
The delegation is made up of Mr. Godfrey Efeurhobo, Managing Director of Smile Communications, David Venn, Managing Director of Spectranet, Mr. Osondu Nwokoro, Director Regulatory and External Affairs of NTel and Mr. Chuma Okoye, Chief Commercial Officer of Swift Networks.
Warning on a systemic industry failure threat with likely negative collateral and great national socio-economic implications, the group further noted that the Network OPEX of Telecommunication Operations has sky rocketed in the last 15months by over 85% with Revenues remaining relatively flat.

Most Operators, according to the group, are currently struggling with meeting obligations to their suppliers particularly Network Vendors, TowerCos and servicing Loan obligations.
This worrying trend, they noted, includes even some of the Tier I Operators. According to them, a perfect storm is brewing and if not headed off will result in the collapse of key players in the industry.
According to the operators, 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 businesses constitutes a major threat to the economic recovery and growth plan of the current administration.
Such bankruptcy and consequent collapse, they noted will also substantially lessen competition with its attendant deleterious impact on consumer choice and attainment of the Broadband objectives of the country.
The MDs stated that the NCC’s declaration of 2017 as the Year of the Telecoms Consumer could 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 as a result of deteriorating market conditions.
Symptoms of the declining fortunes of Operators, according to them, are already evident in the market as debts continue to grow and overall service quality continues a downward trend.
The group noted that there is a grave threat to the Broadband Agenda of the Government and expected dividend from growth in Broadband penetration envisaged in the Economic Recovery and Growth plan 2020.

This threat, they warned, will materialize if the market is not sanitized and the Tier II Operators are not protected to encourage and justify the Capital Investment required to continue to invest and improve Broadband penetration in the country.

By Emeka Aginam

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