Danbatta: Investments in Telecoms Have Hit $70bn, VAS $200m

Says NCC is mediating in sector’s huge debt profile

Chika Amanze-Nwachuku Emma Okonji

Notwithstanding the huge debt burden plaguing the Nigerian telecommunications industry, investments in the sector have jumped from $50 million in 2001 to over $70 billion as at September 2017, while the Value Added Service (VAS) segment of the telecoms market alone is worth over $200 million as at 2018, and is estimated to grow to $500 million by 2021.

The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, disclosed this during an interactive session with journalists in Lagos yesterday.

He attributed the growth in telecoms investment since 2001 to the adoption and implementation of global best practices and standards in telecoms regulation, but noted that the successes did not come without challenges.

Danbatta, who admitted that the huge indebtedness of telecoms operators to their contractors on one hand, and among themselves in the area of interconnect debt on the other hand, was silent on the actual amount being owed.

He, however, stated that the NCC is involved in mediations and arbitration to ensure that the huge debts are paid to forestall disruption of telecommunications services.

“The debt profile in the telecoms sector is huge, but what we are doing is to mediate in order to ensure that these debts are paid, because a situation where those who are owing the money do not pay affects the services of those who are being owed, because there is need to invest to provide those services that the debtors need in order to survive. So we always encourage amicable settlements of debts.

“But the law establishing the commission empowers it to mediate, and arbitrate in many cases in order for us to ensure services are not disrupted. These efforts are going on behind the scene, we don’t talk about it, but the telcos which are here, will attest to this fact that the NCC is involved in mediations in order to settle the huge debt profile in the industry.

“We have information in the NCC on how much each operator is owing, but we do not need to make it public because not paying cripples activities of those being owed. So the debt profile in the industry is very huge and something needs to be done to ensure it does not get out of control and hamper services in the telecoms sector, he said”

Danbatta said the commission was aware of the huge debt, especially the debt owed contractors that have provided services to the telecoms for several years past, but pointed out that “the indebtedness is not peculiar to a particular telecoms operator, but cuts across all the operators.”

He recalled that the 9mobile crisis was among the challenges that the sector grappled with recently but was elated that the issue was resolved with the intervention of the Central Bank of Nigeria (CBN).

“We are witnesses to the challenge that faced one of our major service providers, 9mobile, but with the intervention of the NCC and the CBN, the country was saved the predicament of losing one of the key service providers,” he said.

Danbatta restated commitment to ubiquitous broadband penetration across the country, in order to give all Nigerians cheap and easy access to Internet, while insisting that the 30 per cent broadband penetration target will be achieved before the end of 2018, having attained 22 per cent broadband penetration.

“Our commitment to achieve the three ‘A’s of Availability, Accessibility and Affordability is hinged on broadband deployments across the country. The potential in broadband penetration is enormous, which explains why the entire global community is investing huge resources to exploit and assimilate broadband that is expected to guide global economic index of development in the future,” Danbatta said.

In order to further drive broadband penetration, Danbatta said the commission had to licence four Infrastructure Companies (InfraCos) to provide broadband infrastructure that would enhance broadband rollout across the country. “With a combination of licences for infrastructure provisioning and spectrum auctions, and refarming of some of the existing spectrum to make them more efficient, we hope to attain the recommendation of the National Broadband Plan, and possibly surpass it by the end of 2018. The International Telecoms Union (ITU) report credited to Nigeria, indicated a 22 per cent broadband penetration since 2017,” Danbatta added.

NCC is therefore working assiduously to accomplish the 30 per cent national broadband target for 2018, as envisaged in the five- year National Broadband Plan (2013-2018), he added.