Engr. Stephen Bello, former Acting Executive Vice Chairman of the Nigerian Communications Commission (NCC),in this interview with JUSTUS ADEJUMOH, speaks on the measures that can be taken to raise the performance bar of telecom services, evolution of new technologies and other related issues. Excerpts:
Nigeria celebrated 20 years of GSM in August last year. What is your assessment of the industry’s performance in these two decades?
I think when it comes to the telecom sector, Nigeria has achieved quite a lot. And then when you talk of somebody’s achievement, you look at where he or she started from and where he or she is today. Before the GSM operators were licensed in 2001, NITEL was the only telecom company in Nigeria.
This was because Nigeria operated an economic system, which we cannot say whether it is socialist or capitalistic, a mixture of so many things.
As a result of that, NITEL alone was the one providing telecoms service until 2001.
When Obasanjo, through the advice of the then Minister of Communications, announced the liberalisation of the telecoms sector, we were all happy.
And then NCC was created. About the same time National Broadcasting Commission was also created to allow for private television stations and so on. Before then, many of the military ministers of communications were opposed to privatisation of the telecom system, they claim for security reasons, but we all know the benefits now.
One of the ministers was quoted as saying that the telephone is not where everybody is but today, he has been proved wrong.
And you know, we are getting to a stage now where we can say, telephone has become a fundamental human right of Nigerians.
Well, the first 10 years of privatisation was rather slow, because most of the ministers were still on our military restrictions as to what could be done, the investment was mostly low.
So, we had CDMA operators. By the time of the privatisationand even up to 2000, the total number of lines in Nigeria was still less than half a million. So, half a million telephone lines for a population of 150 million is as if we had no telephone.
And then the private people came in, the first private operators such as Intercellular. When they started, because of the economy of scale that was small, each line was selling for N250,000. How many Nigerians could afford that?
So, because of that, the penetration was slow, the growth was slow, because it was costly. Very few businessmen could afford that, mostly in Lagos. So, the common man couldn’t afford it. But the milestone came in 2000, when eventually Obasanjocame to power, when he liberalised telecoms and gave NCC full freedom. He appointed a very technical board for NCC.
And so we now had a technical board, a board that was not there for politics. And as a result of that the spectrum auction took place in 2001 and that brought in competent international companies that were able to attract investments.
The major thing that made investment to be attractive was because the number of operators who are limited to five licenceswere issued five licences.
As a result of that, you know, each one of them was able to have a critical mass of customers that will ensure economies of scale.
Secondly, because there were only a few of them, GSM operators, they had enough spectrum for each. It was possible to have given licence to 20 GSM operators, but the network would be very inefficient, because the spectrum they will have would be so small. But with few operators, everybody has enough spectrum to roll out. And that was why MTN, Econet and others were able to roll out the network very fast.
Having successfully upgraded the networks from 1G to 2G, 3G and then 4G, Nigerian is currently planning to deploy 5G networks. What makes 5G special?
I think the issue of 5G or the controversy surrounding it started with the trade war between Donald Trump and China.
So, whether right or wrong, true or false, whether deliberate or by chance, whichever way, Americans have come to conclude that 5G switches installed by Huawei can be used for spying. That cannot be proved beyond reasonable doubt.
So, it’s just speculation, nobody can prove that. Now, talking about what is special about 5G, 5G will enable services, which hitherto were not possible. That is the main advantage of 5G and that is what is called machine to machine communication.
With 5G, a telephone can talk to the fridge. Technically, you can use your telephone to talk to a switch, you don’t even need to tell the telephone or put on the telephone, you can programmeyour telephone, we say that telephone at nine o’clock, switch off my generator, if you don’t need to intervene.
So, you can put 5G in your car in such a way that when your car gets to the gate, your car will speak to the gate, the gate will open itself, you don’t need to come out from the unit.
So, the major advantage of 5G is that it is going to make possible services which are not possible with 4G, 3G and the older generation.
Talking of the economy of 5G, there are already concerns that 5G may not be affordable to many Nigerians due to high cost of spectrums and the cost of rollout. What do you think the government or the regulator can do to make this service affordable when eventually deployed?
Well, the same happened when CDMA started operation, and they were charging N250,000 for a line. People who could afford it bought it at that time.
Later on, because of government intervention and the rollout of 3G, the economy of scale brought the price down.
So, the same cycle will also happen with 5G. Initially when you roll out 5G, it will be mostly for the rich people in areas like Banana Island or Maitama in Abuja.
These are the people who will be able to afford 5G when it starts. But by the time you look at the economy of scale, you’ll find that within six months to one year after, the price will come down when the economy of scale comes in, and more people will be able to afford it.
But, I can tell you that 80 percent of Nigerians do not require the extra services provided by 5G as of today. So, we don’t need to bother about that for now. The people who need it will key into it once it is launched.
You said earlier that the GSM operators were able to roll out faster than the CDMA operators then. But as of now, there are still areas yet to be covered by telecommunications service in Nigeria. Why is this so?
It is true that some areas are not yet covered. There are two types of coverage in a telecom network; you have coverage of area and coverage of population. Those are two different types of coverage.
Now, the operators remember that these investors are not charity organisations and they are not productive service.
These are business people who have to recover the investment and they have to give account to their investors and shareholders.
So, because of that, initially, they went for population areas where you know the people who can afford t h e t e l e – com system, you know, will be serviced and then they will buy, they will make calls and they will recover their money back. That is why they’re concentrated in Lagos, concentrated in Onitsha.
They’re concentrated in places like Port-Harcourt, Abuja, something like that, where you have people who could afford the call.
So, they rolled out in places where people could afford to pay N25,000 for a SIM card and then they will move costs at the rate at which you will be charged. So, they needed to recover their money. That’s why they concentrated on the urban areas.
It will surprise you that Onitsha generates more traffic than many big cities in Nigeria because of the businessmen who keep calling China and other places.
They are monitoring their containers coming from Hong Kong and other places like that. So, they generate a lot of traffic. And that’s what the telecom companies want. They want where they can recover their money.
So that is why they concentrated there. Many of the rural areas are not economically viable and nobody wants to go there. And that is where the government created what is called the Universal Service Provision Fund. Part of the money that is paid to NCC by the GSM operators is set aside to subsidise cell sites in rural areas which are not economically viable. So for them, a telephone supply is the social service.
It is not a commercial service and the government had to subsidise it.
So, that is why today it is too difficult, you know, to cover every geographical area of Nigeria. We have been able to cover up to 90 per cent of the population. But to cover the land area is still very difficult.
No country in the world has covered 100 per cent of the land area. Not even Israel, which is a relatively small country and which has a very high standard of living and technologically advanced.
You are planning to launch two books about regulations and compliance across sectors, what informed your decision?
Yes, I have published two books. One is the Principles and Practice of services and utilities regulation, and then the second one is a practical guide to regulatory compliance.
The first one is designed to be used as a handbook and the reference material for regulators of services and utilities. Utilities are things like telecom, power, water, etc.
And then services are things like banking, insurance and so on and so forth, goods or services, including medical service.
So, with regards regulation, we are talking about the administrative and the technical skills, which can be used to reconcile stakeholders’ interest in any industry; that is what regulation is about. What a regulator is trying to do is to balance the interests of all the stakeholders in a particular industry. For example, the power industry, you have many stakeholders, the consumer, the transmission companies, the generating companies, distribution companies, the gas suppliers, then the government.
If you want to supply service to the rural area, you have equipment manufacturers like Siemens, and something like that,you have a power consultant, so many interests, including that of a regulator of and make sure that everybody’s interest is protected. And where the interest clashes, the regulator will reconcile the interest.
The service provider wants to make maximum profits, sure, the buyer wants to buy things cheap. So, your regulator is there to make sure that the supplier, the customer have value for money.
And also the supplier, who is supplying power, must recover his investments. So, he wants to charge as high as possible for you, so, you’re aligned to charge in order to recover his costs and make moderate profit, but you don’t allow profit sharing at the expense of your consumer.
Culled from Independent