To tame the observed fall in Quality of Service (QoS) amongst all the telecoms services, the Association of Licenced Telecoms of Nigeria (ALTON) has called on the Central Bank of Nigeria to delist telecoms equipments from the list of 41 items barred from easy access to foreign exchange (forex) immediately.
Speaking in an interactive session with members of Nigeria Information Technology Reporters’ Association (NITRA) in Lagos, weekend, the Chairman of ALTON, Engineer Gbenga Adebayo said the challenges currently frustrating the infrastructural upgrade of networks of members stemmed from the “devaluation in the value of our currency, to lack of access to foreign exchange and the issue of data floor price”.
Explaining more on the impacts of scarcity of forex on the industry, he said “The industry is facing major challenges in purchasing Foreign Exchange to fulfil contractual obligations to Equipment Suppliers and Foreign Vendors. This situation is adversely impacting our network operations and also some recent developments in the industry have alluded very clearly to the risks at hand”.
According to him, “The prevailing scarcity of forex has occasioned a situation where the Banks are unable to obtain forex for an upward period of six months”.
Adebayo argued that “Telecommunications Service Providers are similar to manufacturing firms and deserve to be treated in the same manner. The core network equipment and other auxiliary equipment procured for providing Voice and Data Services are equivalent to plant and machinery acquired by the manufacturing firms for the production of goods and services in the country”.
Business Hilights recalls that several key components for the upgrade and servicing of telecoms infrastructure made the list of 41 items barred by the CBN in its prevailing forex access window.
Some of the telecoms items classified as plants and machinery by the apex bank which made the list of the barred items but are needed by the telecommunications service providers include RF Coverage Equipment (BTS, BSC, Node B, RNC); Core Equipment (MSC, Media Gateway, RMC, CCN, EMM, Packet Core, MPLS Nodes, etc.); Transmission Equipment (Microwave, Optical Fibre, RF Planning Tools); Customer Contact Equipment (SIM Cards); Network Tools (Planning tools, Monitoring tools, etc.).
According to him, “The aforementioned equipment is subsequently integrated to form a network to provide services of Voice/Data/SMS/VAS/Enterprise solutions/leased lines – which are finished goods in the Telecommunications Sector”.
ALTON boss averred that “Telecommunications sector is termed ‘infrastructure of infrastructures’ and Social Overhead Capital which propels productivity in other sectors of the economy. The multiplier effects of efficient and reliable telecommunications services on other spheres of the economy, such as banking, aviation and hospitality cannot be overemphasized”.
“ALTON is of the opinion that Telecommunications Sector deserves to be supported through direct FX allocation from the CBN interventions. This will facilitate the deployment of pervasive broadband network nationwide and ensure that the country retains its prime position, as the largest Telecommunications market in Africa.
In his further submission, Engineer Adebayo gave insights on the negative impacts of including telecoms equipments in the 41 items.
Lead in the challenges includes increased operating cost. He said in the absence of local substitutes for telecoms plant and machinery, “the telecoms service providers are constrained to source FX from interbank market at higher rates compared to other sectors such as Manufacturing, Aviation and Agriculture accorded priority in FX allocation at reduced rates by the CBN”.
“Owing to the prevailing economic situation in the country, ALTON members cannot transfer the increased cost burden to the consumers, thereby contracting profitability and ability to make further investment to drive growth in the industry.
Another effect of the exemption is the unfavourable credit terms which is causing delayed obligations to foreign vendors as at when due.
ALTON revealed that the scenario “has occasioned delayed payment to Equipment Suppliers and other foreign vendors, who have now resorted to imposing unfavourable payment terms on Telecommunications Service Providers in Nigeria. Some of the Foreign Vendors had issued Notice of Disconnection of service, which could disrupt service availability with attendant impact on customers’ experience”.
Another dangerous result of the CBN exemption is delayed implementation of Network Enhancement and Improvement Initiatives (NEII).
Business Hilights recalls that ALTON members had made commitments intended to ensure the implementation of National Quality of Service (NQoS) fixing scheme.
This is a coordinated network investment plan supervised by the Nigerian Communications Commission (NCC) at designated locations nationwide over a period of time by the Telecommunications Service Providers to ensure improved QoS.
Adebayo noted that the continuity of the initiative is dependent on obtaining forex to import equipment required to carry out the intended National QoS Fixing Project.
