Business Hilights
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Data services providers still want price floor review, tower rental reassessment

The need to review data price floor has reechoed again, this time, internet services providers are calling on the authorities to consider their challenges to take another look at the rates so that they can remain in business.

According to them, another factor joining forces to derail their efforts is the overbearing rise in the cost of tower rentals.

In Nigeria, the business of tower rental is still budding. Before now, telecoms operators own Base transceiver Stations (BTSs), but due to the extra challenge to run telecoms alongside tower management, many operators have offloaded their tower to renting outfits.

Tower operators allow operators to use at a fee which are usually on per annual basis depending on the nature of agreement signed by clients.

Three major tower operators are now in Nigeria including IHS with 14,000 towers; Helios with 2,000 towers; and the new entrant American Towers Company (ATC) with 7,000 towers.

Leading data services provider and managing director of Spectranet Limited, Mr. David Venn in a telephone interview identified two critical problems hobbling his sector to include the need to review data price floor and tower rental fees in line with current realities.

In his submission, “Since the botched data floor policy of Nigerian Communications Commission, it has become difficult for ISPs and Telcos delivery internet service to operate profitably. We are seeking the review of that policy by the authorities to enable operators deliver quality service and continue to be in business.”

“Another biggest challenge we are facing today is cost of tower rentals which has continued to increase over the year. It is funny, that international capacity cost has reduced by 50 per cent while tower rental cost is increasing unabated. Imagine a situation where cost of tower rental in three times our salary cost.

The key objection he raised is that whereas tower rental contract is usually signed for a period of 5 to 10 years, there is always a clause of annual cost review based on inflation.

Venn added that because of the galloping inflationary trend, the cost of rental is now facing astronomical increase, thus frustrating continued operations and service delivery.

He recalled that part of the factors that sunk Multi-Link was tower rental indebtedness to a tower company-Helios Tower which eventually took over the company.

Before now, several industry experts have called for another review of the suspended data price floor review.

Chairman of chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, an Engineer had severally called on the regulator, the Nigerian Communications Commission (NCC) to review the floor so as to encourage smaller operators than exposing them to the hostile business ideology of GSM companies who are ready to dry up the space and render ISPs out of business over time.

In an interview with the president of Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, he was passionate about the regulator in effecting an immediate review of the data price floor so that ISPs will begin to operate within a reasonable profit margin instead of dying slowly.

Efforts to find out when NCC will carry out the suspended review failed as at press time, but a usually competent source at the Commission confided in Business Hilights that the data price floor will be looked into “very soon”.

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